My dear Prime Minister,

BUSINESS DELEGATION

The failure to secure the team about whom Lord Lovat [1] asked me
to cable to you is extremely disappointing. So far as I know today
there are now two members of a provisional team-Sir Harry McGowan
[2] and Sir Hugo Hirst. [3] Sir Ernest Clark [4] has also been
approached but I know little about him save that he is an expert
accountant. Todhunter [5] the Director of Imperial Chemical
Industries, who looks after the combined Australian and South
African interests, had a very long talk with me on Monday evening.

He told me that he had been urging upon Lovat the need for men
capable of taking a dynamic rather than a static view of
Australia. I fear that the difficulties to be encountered in
getting four men, who are really worth while, to leave England for
six months are going to prove extremely formidable.

IMPERIAL ECONOMIC COMMITTEE

The Imperial Economic Committee under its new procedure has now
got to close grips with two subjects into which it is enquiring
during this session, namely Tobacco and Timber. From the evidence
already received and the immense volume of papers circulated, it
is quite clear that, on both subjects, we shall be able to
formulate really interesting and, I hope, useful reports. It may
interest you to know that, on the subject of Tobacco, up to the
present 63 memoranda have been circulated to the Committee and as
these memoranda average about four foolscap pages of typing, one's
weekends are fairly well employed in reading them.

Under the new procedure, the Full Committee hears a few selected
important witnesses, then has a general discussion on the scope of
the report and thereafter hands the work of preparation over to a
Sub-Committee which is expected to hear the remainder of the
necessary witnesses and to present a first draft report to the
Main Committee.

The Committee has decided to appoint Mr. Wardlaw-Milne [6] M.P.,
one of the British Delegates, to be the Chairman of the Tobacco
Sub-Committee and I have been appointed the Chairman of the Timber
Sub-Committee.

In view of the Empire Forestry Conference [7] in Australia this
year, we shall try to make our Timber Report available before this
Conference.

I am glad to say that India has appointed Sir Peter Clutterbuck
[8], a most useful forestry expert, to be an adviser to the Indian
Delegation and I shall have the benefit of Clutterbuck as a member
of my Sub-Committee.

It has proved somewhat difficult to define the scope of the
preliminary surveys of industries and after the Full Committee had
spent one rather futile meeting in discussing the agricultural
machinery enquiry, I proposed a very small ad hoc Sub-Committee to
review the method in which these preliminary reports should be
handled. The Sub-Committee is to consist of the Chairman [9], F.

N. Blundell [10] M.P. and myself.

While on the subject of the Imperial Economic Committee I should
like to report to you once again that there can be no doubt that
the greatest weakness both of the I.E.C. and indeed of the Empire
Marketing Board, is the rather poor calibre of the representation
of some of the Dominions. India has been consistently well
represented but Canada, South Africa and New Zealand have not
pulled their weight. As a matter of fairness, I think I should
also report that Mackinder has been doing a little bit more work
just recently in consequence of Chadwick's [11] absence. I have
given you so many perfectly justified adverse comments of
Mackinder that I certainly ought to give you this somewhat more
favorable report.

THE CITY AND AUSTRALIA

In my letter of the 16th February I referred at some length to the
attitude of the City and other well informed opinion to the
present state of Australian economic conditions. The last week has
seen the complete break up of the drought in Western Queensland,
New South Wales, South Australia and in fact, so far as one can
judge from the reports here, in the whole of Australia east of
Spencers Gulf.

The comments in the newspapers have, however, been almost confined
to reports on the damage done by the floods and to the loss of
life in towns in the northern rivers in New South Wales. At the
present time one feels that the newspapers will not be very
interested in a further official statement by the High
Commissioner. [12] There have been a good number of official
statements made recently, some of them without any topical
significance and just at present I think one ought to regard the
mind of the well informed public as being inclined to discount
obviously official propaganda. What appears to me to be needed is
a cultivation of the press on the personal side in order to induce
the publication in the Editorial columns of comments giving proper
weight to the immense scope of Australian possibilities.

With reference to the change in the position caused by the great
rains, I have prepared a short paragraph which will be inserted in
the 'Times Trade Supplement' tomorrow in the editorial columns as
if from the Editor. If more of this sort of thing could be done in
a number of newspapers, I am sure it would be more effective than
official statements.

THE BEEF TRADE

I am enclosing a very interesting letter to the 'Times', dated
21.2.28, on the position in the Argentine. Acccording to the
writer, foot and mouth disease has become a serious and probably
permanent factor on the Argentine cattle estancias.

The British Government is extremely anxious to control foot and
mouth disease, which has cost the Government and cattle breeders
and fatteners millions during the last few years. They, therefore,
sent Lord Bledisloe [13] on a semi-official mission to the
Argentine to consult with the Argentine Authorities as to the
steps that should be taken to try to eliminate meat from cattle
suffering from foot and mouth disease from the export trade of
Great Britain. I understand that Bledisloe has arranged with the
Argentine Government for the appointment of some 70 Veterinary
Inspectors by that Government and it is reported that Bledisloe
has satisfied himself that all possible steps will be taken to
eliminate the probability of infected carcasses being despatched
to the British market.

Bledisloe has not yet returned to England as he has broken his
journey at Madeira for a holiday. When he gets back, I shall make
a point of seeing him to find out his personal views about the
situation.

From an Australian point of view, these conditions in the
Argentine are distinctly important. At the very least the new
measures which will have to be taken in the Argentine should, to a
certain extent, increase the cost of production there. In addition
the disease itself-while it is not likely to kill many cattle-will
have a certain debilitating effect on herds and may delay the rate
of maturing, which is one of the strongest advantages that the
Argentine at present possesses.

You may desire to draw the attention of your special Pastoral
Committee [14] to this situation.

Yours sincerely,
F. L. MCDOUGALL