My dear Prime Minister,

This week there is no regular mail but a supplementary goes via
America. I have already written you a brief communication about
the Manchester Chamber of Commerce. [1]

I have now to acknowledge your long letter started on the 16th
January and completed on the 8th March. [2] It is unnecessary for
me to tell you how much I appreciated receiving this. After a few
months have elapsed without my having any response from you, I
subconsciously start to wonder whether I have at length succeeded
in boring you with the flow of matter which I maintain. I entirely
understand that it is not possible for you to write at all
frequently. Your letters, when they arrive, are, therefore, all
the more welcome. There are one or two points in your
communication on which I would like briefly to comment.

As regards the idea of a short book on Australia [3], I have not
yet made any attempt to tackle the subject and doubt whether I can
make the time but I certainly think that something of that sort is
very necessary. If I can see my way to doing anything useful on
the subject, I will write to you again about it. It is possible
that in August and September, when neither the Empire Marketing
Board nor the Imperial Economic Committee will be sitting, I might
be able to do something of the sort-although this year I ought to
arrange to take some holiday as four years have elapsed since I
had any larger break than the one which I obtained when I came to
meet you at Port Said.

You referred to the lunch which the High Commissioner [4] gave to
Hacking [5], Hamilton [6] and Clark. [7] I am sorry to say that
this was the first and last of what I had hoped would be a series
of small lunches. The idea that I put up was that if the High
Commissioner established the idea of a small fortnightly lunch at
Australia House, he would be able to do two or three things at the
same time very effectively, namely, to educate a large number of
people that matter with the Australian point of view, to extend
pleasant hospitality at an extremely reasonable cost and perhaps
establish a new standing for Australia House in British
Governmental and Parliamentary circles.

I was very amused by your comment about my referring to Tom
Johnston [8] as a 'boon companion'. It was most misleading if I
gave any such impression. Johnston is a strict teetotaller and
has, to the fullest extent, the Labour suspicion of anyone who is
not a comrade-suspicion which I expect is based on an inferiority
complex. Nevertheless I have a warm regard for Johnston.

With reference to Simplified Practice, I will try to obtain full
information as to the attitude of the Board of Trade to the
proposals put forward by Julius [9] as soon as I can and forward
them to you.

Regarding your comments on bringing the importance of Empire Trade
to the Conference of Employers and to Trade Unionists, I think you
will be interested to know that the tendency of the best moderate
opinion on both sides is that it is desirable to prolong this
Conference or rather to convert it into a series of meetings
lasting over many months. It is felt that there is everything to
gain and nothing to lose by keeping the discussions going and that
the mere fact of the discussions will tend towards industrial
peace and to a more reasonable attitude on the part of both
Employers Associations and the Trade Unions.

I had a talk to Cramp [10] on the subject of bringing the Empire
into the programme and he thought that at present it would not be
desirable. I shall try to have a talk with Mond [11] in the course
of the next few weeks on this subject. I am also anxious to do
everything I can to get a reasonable discussion of Empire
development at the Commonwealth Trade Union Conference which has
been summoned to take place in London in July. I should be very
grateful if you could let me have any information about the
Australian Delegate or Delegates to this Conference.

With regard to Rationalisation of Industries on an Empire basis,
my one disappointment in your letter was that you had not been
able to give me a fuller account of your reactions on my letter of
the 19th of January. [12] I have written a very carefully worded
article on this subject for the Special Empire Products Number of
the 'Times Trade Supplement' and hope to forward a copy of the
draft by the next mail. I am very glad to find that you regard
this as a matter of first rate importance and I hope that it will
be possible to make such progress that, when the next Imperial
Conference occurs, we may be able to place some such subject on
the Agenda and have a really useful discussion.

In your letter you refer to the Irrigation Conference [13] over
which you presided at Canberra. I have read the press accounts
with very great interest and both Rivett [14] and Gepp [15] have
told me how successful it was. My own feeling is that your
Pastoral Committee ought to take the problem of Fodder
Conservation and the fattening of stock bred in the dry district
around the Murray and the [Darling] and consider these two
questions in very close relation to the whole scheme of the Murray
Valley Development. I have written to Gepp strongly suggesting to
him that the question of the foundation of the great export
industry in pig products based, to a certain extent, on production
in irrigation areas is worth the closest attention of his
Commission.

The Imperial Economic Committee commence their enquiry into Pig
Products next week and perhaps the publication of the report may
be a suitable occasion for the Commission to raise the whole
question of the pig industry in Australia.

BRITISH MEAT SUPPLIES

In my letter of April 5th I enclosed a letter from the 'Times' on
the subject of Argentine foot and mouth disease [16] and have
mentioned to you an idea that had occurred to me as regards the
restrictions of meat imports from infected countries to port
areas. I am now enclosing an article from the 'Times' on this
subject [17] which I think was written by the Agricultural Editor.

You will see that he has taken up my idea, although only just to
the extent of mentioning it. You will probably like to pass this
letter on to your Pastoral Committee.

BRITISH MOTOR INDUSTRY

I am enclosing an important letter which Sir Robert Home [18]
addressed to the 'Times' on April 16th and a reply which appeared
today from Alfred Hacking. 19
I am also enclosing a copy of a memorandum which I submitted to
the Committee of Civil Research which is enquiring into the
Empire's Mechanical Transport problems.

GREAT BRITAIN AND WORLD TRADE

I am enclosing a copy of a memorandum which I have just completed
on this subject, which I think you will find of very distinct
interest. The graphs which illustrate it are very striking. It
seems to me that anyone who reads this memorandum carefully cannot
possibly continue to believe that the depression in British
industry is due to world impoverishment, although this appears
still to be the thesis of the Committee on Industry and Trade
which is presided over by Sir Arthur Balfour. [20] By next mail I
will forward to you a further half-a-dozen copies of this
memorandum, as I think you may find it useful to hand to some of
your colleagues. I shall send copies direct to Mr. Latham [21],
Sir George Pearce [22] and Mr. Paterson. [23] I am not sending
further copies by this mail as the memorandum is only just
complete and there are one or two small textual alterations which
have not been made on the other copies. [24]

I should particularly like to have your comments on the situation
as revealed in this memorandum. The basis throughout has been the
League of Nations statistics, a source which I imagine even the
most virulent classical economist will not regard as being
suspect. In the memorandum I have deliberately refrained from
propaganda, except on the last page. It seemed to me better to
state the case, leaving it largely to the reader to draw
deductions. I would particularly like you to notice the table on
page 14, which is very striking.

Yours sincerely,
F. L. MCDOUGALL