My dear Prime Minister,

In my last letter I referred to the report of the Manchester
Chamber of Commerce and to the effective answer which it was
possible to issue. I am now enclosing a cutting from the London
Notes of the 'Evening Standard' which I think are probably the
most widely read journalistic notes, at least among people of
education. This was a little piece of excellent additional
publicity. I have written to the Manchester Chamber of Commerce
offering to go down and discuss with them the way in which British
trade is affected by the Australian tariff.

LOW [1] CARTOON

I am enclosing a copy of Low's cartoon from the 'Evening Standard'
of 26.1.28. I really think it is one of the most brilliant pieces
of cartoon work that I have ever seen. It appeals to me with very
great force because, as you know, I have been so profoundly
impressed by the reverent adoration with which the journalistic
and commercial world of this country have each year received the
ex cathedra statements of the Chairmen of the Big Five Banks. [2]
The fact that year after year they have been hopelessly wrong in
forecasting a definite trade improvement has not in any way
decreased the awe and regard with which their annual speeches are
received. [3]

The head of Montagu Norman [4] as the Sphinx is extremely telling
and I feel sure that you will be highly amused, especially as I
remember your association with McKenna. [5]

THE EMPIRE MARKETING BOARD

I have made an analysis of the purposes for which the main grants
for scientific and marketing research have been approved by the
Empire Marketing Board up to the 31st December 1928. I have sent
you these figures before, shewing the countries benefiting by the
grants. This time I have worked out the figures according to the
subjects which are receiving help. I think you may find this of
some use.

At the last meeting of the Research Grants Committee of the Board,
the Australian Entomological proposals [6] came forward and the
Committee decided that, while they could not at this stage
definitely recommend to the Board a capital grant of 25,000
because they had not sufficient detail about the expenditure, yet
in view of the importance of the subject they were prepared to
recommend to the Board that a substantial capital grant should be
made which should not exceed 25,000, so far as the Board was
concerned, but that further details from Australia should be
awaited before a final decision as to the actual amount is arrived
at.

So far as the annual maintenance grant is concerned, I had
discovered that members of the Board felt that a request for
10,000 a year for five years was very formidable. The Board has
been looking for some time for an opportunity of introducing a
declining scale of annual grants.

I felt it probable that, if there was a general discussion on the
10,000 a year grant for Australian Entomology, one of two things
would occur-either that the Committee would rather unwillingly
agree chiefly because the Commonwealth Government had asked for
this sum, or, alternatively, that a proposal would be made that a
sum of 5,000 a year should be allotted. I, therefore, took the
initiative in proposing grants on the following basis: 10,000 a
year for 2 years, 7,500 a year for the third and fourth years and
5,000 for the fifth year.

I had carefully discussed the principle of a declining maintenance
grant with Julius [7] and he had strongly expressed the view that
it was both desirable that the Empire Marketing Board should adopt
that method and also that the Australian Entomological application
was quite a suitable occasion for its being brought into play.

The Research Grants Committee decided to recommend the suggested
scale of annual grants to the Board and I hope that, at the Board
meeting on February 15th, the whole matter will go through without
any hitch.

I have written to Rivett [8] carefully to explain how necessary it
is that the Board should receive fairly definite details about
schemes and have told him that as the Board has to deal with
applications from all parts of the Empire and not only from the
great self-governing Dominions, it is necessary for the Board to
have fairly full and detailed statements in order to avoid
scandalous waste of public money. Of course, when the Board is
dealing with a highly competent scientific authority, such as the
Commonwealth Scientific Council, such questions need not perhaps
arise but, on the other hand, as I told Rivett, we had an
application the other day from the Kenya Government for grants
amounting in total to 60,000. After demanding detailed
statements, we found that most of the proposals were quite
unsuitable for E.M.B. grants, with the result that Kenya obtained
a grant amounting in total value to about 2,000.

From this example you will readily see that, unless the Board is
to give consideration to the difference in status between a great
Dominion and a Colony, such as Southern Rhodesia, or a Dominion of
the type of Newfoundland, it would be necessary to ask the
Dominions themselves to submit comparatively detailed schemes when
financial assistance is being sought.

IMPERIAL ECONOMIC COMMITTEE

The Imperial Economic Committee has now commenced its Tobacco
enquiry and Sir James Cooper [9] has taken his seat. I think it is
going to prove a useful and interesting piece of work.

Yours sincerely,
F. L. MCDOUGALL