Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

The first meeting of the Imperial Economic Committee was held on
Tuesday afternoon at the Board of Trade. Sir Philip Cunliffe-
Lister [1] welcomed the Committee in a short speech in which he
drew attention to the value of Empire Development to Great
Britain. Sir Halford Mackinder [2] replied stressing three points:

1. Men, Money and Markets.

2. The necessity for keeping British Agricultural interests in
view.

3. The main objective to be to find methods whereby Empire
supplies could be given some definite advantage over foreign
supplies.

The Chairman also emphasised the great value of unanimous
decisions.

The sitting was then taken up with questions of procedure.

It was decided
(a) To sit in private and for the Chairman to be responsible for
Press communiques.

(b) To examine witnesses as considered necessary.

(c) To first attempt to visualise the whole problem, then to study
Meat and Fruit and to reserve consideration of the 1,000,000
proposal until the Committee had formed some collective idea of
the problems which it had to face.

Discussions occurred on a suggestion by the Chairman that, for the
purposes of the Committee, Canned Fish should be regarded as
'Meat' and Fruit Juices and Honey as 'Fruit'. No decision was
arrived at.

On the question of the frequency of sittings, a rather difficult
position was disclosed so far as the immediate future is
concerned. Sir Halford Mackinder is on the Royal Commission on
Food and, owing to the illness of Sir Auckland Geddes [3], is
acting Chairman. He is also tied to the Imperial Shipping
Committee one day a week. He was, therefore, only able to arrange
for meetings of one day a week. Sir Mark Sheldon [4] protested
that, with the enormous volume of work ahead of the Committee,
this would protract discussion in a most serious way.

Sir Mark handed me a copy of your cable in reply to his of the
11th March referring to the work of the Committee. I think that it
is essential to cultivate the personal acquaintance of the members
of the Committee so that we may be able to get them privately to
see the full importance of this committee and thus, at a later
stage, obtain general support for comprehensive proposals for
assisting Empire trade.

Sir Halford Mackinder is lunching with me to-day.

THE GREEK COMMERCIAL TREATY

I enclose copy of letter received from Mr. Amery [5] on this
subject.

PROPOSAL FOR INCREASED REDUCTION OF DUTIES ON WINE AND CANNED
FRUIT

With my letter of February 5th [6] I forwarded to you copy of a
memorandum upon this subject. Although I have no definite
information as to what attitude the Chancellor [7] is taking on
the matter, I know that he is being advised by Sir Horace
Hamilton, the Head of the Customs Department, that grave political
complications might follow reductions in duty that might even be
imagined to place the British producer of Beer or of Bottled
Fruits at a disadvantage.

I met Sir Horace recently at lunch and he made his own opinion
abundantly clear.

DRIED FRUITS

Conditions in Smyrna and Greece

We are all aware that the general hygienic conditions in Smyrna
and Greece are deplorable and I have recently collected
information as to the way in which currants and sultanas are
harvested and marketed in these countries.

I have obtained from the Department of Overseas Trade reports on
this subject, copies of which I am enclosing. These reports
confirm, in the most definite way, one's worst suspicions. I have
marked the portions which, I think, you would be interested to
read.

The Department has asked me to regard the report of the Consul-
General in Smyrna as confidential. They do not wish to have the
report of the extremely insanitary conditions attributed to the
Consul-General.

I enclose copy of a letter which I sent to the proper official at
the Ministry of Health on this subject and as my letter covers the
ground fairly fully, I would suggest that you should read it.

The information contained in the Smyrna report would be most
valuable to Australia if used in small doses for publicity
purposes. As I cannot directly use this report, I have asked the
High Commissioner [8] to cable to the Australian Commissioner in
New York [9] for American Consular reports on this subject.

LABOUR AND FISCAL POLICY

I enclose an extract from a speech of Mr. Tom Johnston, M.P., made
at Tuesday's Debate on the importation of Sweated Goods. [10]

The Labour Committee on the subject is to apply to the League of
Nations Union for information as to sweated goods competitive with
Australian and the Union is asking us for information. I am
suggesting Currants, Sultanas and Raisins; Wine from Spain and
Portugal; Butter from Russia;. Eggs from China, Egypt and Poland.

I am also suggesting that the extremely low wages paid in certain
producing countries have prohibited the development in Australia
of certain primary industries which would, if established, largely
increase her capacity to absorb migrants. An example is flax.

EDUCATIONAL WORK

I have not been reporting my activities in this direction but I
should like to assure you that I am exercising, if anything,
greater discretion than formerly, especially in view of
complications through the Imperial Economic Committee. I see
d'Egville [11] pretty frequently and am in constant touch with the
Conservative and Labour Parliamentary Empire Groups. D'Egville has
arranged for me to address the Empire Parliamentary Association
Trade Committee next Monday on the value of the Australian market
and I am to have Philip Snowden [12] as Chairman!!

Yours sincerely,
F. L. MCDOUGALL