My dear Prime Minister,

Since the last mail I have received two letters from you both
dated the 26th September. [1] One of them deals with general
questions and I was extremely interested to read your expression
of agreement with the idea of sending really firstclass scientific
people to assist the Commonwealth Council for Scientific &

Industrial Research in dealing with scientific developmental
problems. It was particularly interesting to get this comment from
you two or three days before the receipt of a final cable from Sir
George Pearce [2] to Julius [3] authorising the invitation of Sir
Arnold Theiler [4] and Dr. Orr. [5] Sir Arnold Theiler is to be in
Australia for six months but Orr will only have two months at his
disposal.

I would particularly urge that you should set aside some hours,
and perhaps an evening, to having a really good talk with Orr. I
know of nobody in the scientific world who has so clear a grasp of
the economic objectives as Orr. I am sure you will like him
personally. He had a magnificent war record and today combines the
command of a Territorial Battalion with his work as Director of a
Research Institute-I suggest a most unusual combination and one
rather pleasing to contemplate.

Your letter also deals with the subject of minimising the loss of
national wealth consequent upon droughts. I was extremely
interested to hear of your announcement at the Melbourne Show of
the appointment of a special Committee of Pastoralists to advise
the Commonwealth Government on this question [6] and, in view of
the further activities that you have in mind for them, I venture
to suggest one man who I feel sure would be extremely useful,
namely W. S. Kelly, of South Australia. Gepp [7], I am sure, will
confirm my view that Kelly is an extremely able and practical man
with large scale ideas. [8]

It so happens that my Scientific Assistant Fitzpatrick [9] and
myself have just completed a memorandum on the subject of Fodder
Conservation in Australia. Our object was twofold: firstly to
clear our own minds on the matter and, secondly, to forward a
thought out memorandum both to the Commonwealth Council for
Scientific & Industrial Research and the Development & Migration
Commission, inviting their comments on our memorandum in order
that we might obtain a true perspective of the way in which
Australia is regarding the general question. It seems possible
that this memorandum, although having only a limited intention,
may prove useful to your Committee and I am, therefore, enclosing
a copy which you may feel inclined to glance through yourself
before handing it over.

I shall do everything I can to induce the Empire Marketing Board
to follow up the question of the conservation of young grass and
shall, of course, keep both the C.C.S.I.R. and the D. & M.

Commission fully advised on the subject. If you desire any special
information for your Committee from British sources, please let me
know and I will see that, if available, it is obtained.

Your second letter dealt with Tariff matters and was intensely
interesting to me. [10] In the interest of Australian development,
I do most sincerely hope that some means will be found within the
course of the next year or so whereby we may put secondary
production on a much sounder basis. I shall, of course, continue
to forward any information that I think may be useful to you on
this subject.

WORLD MOTOR TRANSPORT CONFERENCE

For the last three days the World Motor Transport Conference has
been sitting in London and I have attended several of its
sessions. A good number of quite useful contributions were made
but these International Conferences leave me very cold. It is
difficult to get down to really useful discussions. The paper
prepared by the D. & M. Commission, which I introduced on the
first day of the Conference, was a distinctly interesting
document. Good papers were also submitted by South Africa and
India.

Each day there was a luncheon, at the first of which the Home
Secretary Sir William Joynson-Hicks spoke, the second Sir
Granville Ryrie [11] and the third Col. Wilfrid Ashley, the
Minister for Transport. I was only able to attend the one
addressed by the High Commissioner and was rather depressed as a
result.

While on the subject of Mechanical Transport, I regret to have to
report that the proposal to establish an Empire Mechanical
Transport Committee in touch with the Empire Marketing Board is,
at the present moment, hanging fire. Difficulties have arisen with
the Crown Agents for the Colonies [12] and the Colonial Office
which will take some smoothing out. Nevertheless I hope to see
some definite progress made in the near future.

AUSTRALIAN PREFERENCE

In an enclosure to my letter of the 26th of October [13], I sent
you a copy of a memorandum which I had prepared on the Australian
Tariff and British Trade. You may perhaps be interested to know
how I used this. A copy was sent to the Empire Marketing Board,
which has distributed the paper among its special lecturers. I
then had the document duplicated and sent out about 100 copies to
such Ministers as I knew and to my acquaintances in the House of
Commons and also to several business men. I have received not less
than 70 replies, a number of them being quite interesting,
including several requests that I should allow the memorandum to
be published. These I refused but Sir Edward Hilton Young [14] was
very anxious to have something on the same lines and therefore I
am preparing, at his request, a special article for the 'Financial
News' on the general subject of the effect of Dominion Tariffs on
British Trade.

GEOPHYSICAL PROSPECTING

In the House of Commons on Monday last Sir Sydney Henn [15], who
has just resigned from the Imperial Economic Committee, raised the
question as to the propriety of the British Government
contributing towards the Geophysical Prospecting from the Empire
Marketing Board Vote. The Prime Minister [16] answered the
question in a very satisfactory way and I enclose a copy of the
Question and Answer from 'Hansard'. [17] The final supplementary
question asked by Mr. E. Brown, the Liberal Member for Leith, is
rather a typical Liberal contribution to Empire questions. [18]

Henn, who is a friend of mine, has a bee in his bonnet on the
subject of the Empire Marketing Board. I think really his concern
[is] lest the E.M.B. should entirely overshadow, in the public
estimation, the Imperial Economic Committee. This is a real danger
but one which, in my opinion, cannot be solved by limiting the
activities of the Empire Marketing Board but by making the
Imperial Economic Committee really effective.

IRRITATING EFFECT OF AUSTRALIAN TARIFF

I have received by this morning's post from the Secretary of the
Publicity Committee of the Empire Marketing Board [19] a letter,
of which the enclosed is a copy. [20] I should particularly like
to direct your attention to the vicious effect of the Australian
tariff on presents and would point out once again that Canada has
remedied this difficulty by admitting, under certain safeguards,
free of duty presents of a value less than 1.

POLITICAL

This morning's 'Times' contains a considerable amount of really
interesting political matter . [21] Two important discussions
occurred in Parliament yesterday.

In the House of Lords Robert Cecil [22] made his 'apologia' for
his resignation. It was dealt with firmly and successfully by his
cousin Lord Balfour [23] and rather heavily set upon in addition
by Lord Haldane. [24]

The Government I think emerged very successfully from this
particular challenge, especially as Bridgeman [25] in the House of
Commons had announced the Government's intention to restrict the
laying down of cruisers during the financial year to one vessel.

Whether this is sound naval policy or not, I am in no way capable
of judging but the necessary action in the House of Commons was a
very effective political comment on Cecil's attitude in the House
of Lords.

In the House of Commons MacDonald moved a Vote of Censure on the
Government on their handling of the Coal situation. [26] The
Government put up Cunliffe-Lister [27] to reply but the Labour
Party refused to give him a hearing, with the result that the
House was adjourned by the Speaker and there was no discussion.

Once again it seems probable that Labour, by a short sighted
policy, has lost an excellent opportunity for it appears to me
that had the discussion on the Vote of Censure taken place, it
would have been extremely difficult, if not impossible, for the
Government to have made out a good case for their laissez-faire
attitude to coal.

The existing situation in the coalfields has fully justified the
warnings of the Samuel Royal Commission [28] and distress in the
coalfields is really serious. It is, of course, possible that
Labour's intention is to concentrate on discrediting Baldwin in
the eyes of the country but it seems obvious that their policy
would be more effectively carried out by a debate in which it is
pretty certain that the Government would have been heavily
criticised not only by Labour but also by Liberals and a number of
back-bench Tories than by a hostile demonstration confined to
shouting by the Labour Back-Benchers.

It is extremely difficult to gauge the present position of the
Government in the country. There are two By-elections pending both
in what would normally be regarded as safe Tory seats, namely
Southend and Canterbury. One's feeling is that the Government is
really seriously discredited chiefly by its sins of omission. On
the other hand the ineffectiveness of the Labour Party and the
fact that the Liberals have the undoubted handicap of the
leadership of Mr. Lloyd George [29], makes it extremely difficult
to give a sound judgment on the political situation.

Yours sincerely,
F. L. MCDOUGALL