My dear Prime Minister,

MANCHESTER CHAMBER OF COMMERCE

You will remember that the Annual Report of the Manchester Chamber
of Commerce made a very vigorous attack on Australian economic
policy, particularly alleging that the Australian Tariff was
having a most detrimental effect on British trade. [1] You may
also recollect that some months ago the President of the
Manchester Chamber of Commerce had an interview with the High
Commissioner [2] and you may have read the carefully considered
statement that the President then put up.

On Monday I went down to Manchester and had a private meeting with
the President and Directors of the Chamber of Commerce. There were
about 16 present and, after asking if they would regard the
meeting as strictly confidential and if I might deal with subjects
with the utmost frankness, I proceeded to tell them that I thought
that it was deplorable that the most influential Chamber of
Commerce in the United Kingdom should be guilty of such loose
thinking and loose writing as to make the sort of statements, of
which they had been guilty.

After dealing with some of their more glaring misstatements, I
drew attention to a phrase used by the President of the Chamber in
addressing the High Commissioner when he said the Chamber
acknowledged that, up to the present time, the Australian tariff
had had no seriously detrimental effect on the Lancashire cotton
industry. I invited them to regard this as an example of what I
described as grossly loose thinking, because, in actual fact, the
Australian tariff had immensely assisted the Lancashire cotton
industry. To clinch this point, I quoted the following very
effective statement:

Argentina buys from the world a larger volume and value in cotton
goods than does Australia but Australia obtains 85% of all her
cotton goods from Great Britain, whereas the Argentine only
obtains 38%. As a result Australia provides a market to Lancashire
worth 8 millions a year while the Argentine buys only 4 millions
a year.

After dealing very faithfully and directly with the Chamber, I
then went on to make some suggestions as to the way in which
people with strong free trade convictions could yet help rather
than hinder Empire economic deliberations. I suggested to them
that they should drop this absurd criticism of Dominion tariffs as
being detrimental to British trade and concentrate more on the
idea that the tendency of the Dominion to make haste quickly in
the matter of the development of secondary industries under the
protection of high tariffs was probably delaying the development
of the Dominions and that British Chambers of Commerce,
representing great industries, while greatly acknowledging any
benefits that they received through Dominion Tariffs, yet could
not avoid a feeling of alarm lest the far more important question
of rapid Empire development might be delayed and temporarily
frustrated by ill-considered methods.

I am quite certain that this meeting was extremely useful and I
think I managed to carry conviction. It is improbable that the
Manchester Chamber of Commerce will be guilty of gross
misstatements in the near future.

7.3.28

By this morning's mail I have received a very pleasant letter from
the President of the Manchester Chamber of Commerce, from which
the following is an extract:-

I am expressing the feelings of all my friends and colleagues who
took part in our interesting discussion yesterday when I say that
the Chamber could not let the occasion pass without sending you a
written expression of their thanks and appreciation for the
trouble you took to visit us and help us to understand certain
difficult aspects of the principle of Anglo-Australian Trade
Relations.

We shall all derive much benefit from our exchange of views and
besides thanking you very sincerely, I want to seize the
opportunity to say that whenever you feel that good purpose might
be served by a further friendly and intimate discussion, I hope
you will let us know.

You may find that a turn in the state of affairs might create an
opportunity for the Manchester Chamber to make useful publicity in
this or that direction. Other circumstances might arise to render
another talk between us desirable. I do want you to feel that you
can rely upon a hearty welcome in Manchester whenever you can
spare the time to visit us. [3]

LORD RAWLINSON'S [4] WAR DIARIES

For the last week the 'Daily Telegraph' has been publishing
extracts from Lord Rawlinson's War Diaries edited by General Sir
Frederick Maurice. [5] I am enclosing the extracts that appeared
on Tuesday and Wednesday because they contain such generous
tributes to the achievements of the A.I.F. Nothing surprises me
more than the extraordinary display of sensitiveness which
occurred in Australia over the rumour that the official history of
the War gave inadequate recognition to the achievements of the
Australians in the Dardanelles. I was rather shocked at the way in
which Monash [6] allowed his name to be associated with this
protest. Wherever I have gone in this country I have never heard
anything except the warmest and sincerest praise of the A.I.F. as
a wonderful fighting force. If you have not received these
extracts from any other source, I am quite sure that you will find
them extremely interesting and useful.

8.3.28

WINE

I have written to you at considerable length on this subject [7]
and have enclosed a spare copy of my letter as I think you may
desire to send it to Mr. Paterson. [8] Great pressure on my time
today will prevent my writing at great length to Mr. Paterson on
this subject. I am just sending to him copies of the statements
prepared for Mr. Amery. [9]

THE EMPIRE AND BRITISH EXPORT TRADE

With reference to the article which appeared in the 'Times Trade
Supplement', of which I sent you a copy by last mail, I am now
enclosing a copy of a leading article which appeared in this
week's issue and in which the points which I made in my article
are rubbed in editorially.

POLITICAL

The results of two By-elections were announced this morning. In
one case-St. Ives-the Liberals have won a seat from the
Conservatives by a majority of 700. This, of course, is simply a
return to normal form for the far west of Cornwall has always been
a Liberal stronghold. Mrs. Runciman [10], who is the new member,
declined to receive any assistance from Mr. Lloyd George [11] and
repeatedly declared, in her election campaign, that she did not
recognise Mr. Lloyd George's leadership.

At Middlesbrough, where the late Liberal member had a majority of
9,400, the result of a triangular contest was that the Liberals
have retained the seat from Labour by a majority of only 89, the
Conservative coming third with about 2,000 votes less than Labour.

On the whole these two elections do not show any very clear
indication of any substantial change of opinion, although St. Ives
must be regarded as somewhat detrimental to the Government. It is,
of course, possible that the election of Mrs. Runciman might re-
emphasize Liberal disunion. One rather imagines that the amount of
press publicity at present being given to the Zinoviev case [12]
will have some detrimental effect on the Government until the
matter has been cleared up.

Yours sincerely,
F. L. MCDOUGALL