PERSONAL & CONFIDENTIAL

My dear Prime Minister,

I hope that by the mail following this one, Major Fuhrman [1] will
be able to forward to you a Report, which itself is just about
ready for my signature, but which cannot be completed until the
authentic texts of the various resolutions passed by the
Consultative Committee are available.

In this letter I should like very briefly to give you, for your
personal information, a picture of the issues. Before doing so I
will just comment on my more official report. I do not suppose
that you will regard this report as being of sufficient importance
to make it a parliamentary document, but it had occurred to me
that you might feel that it was worth while to have it duplicated
for the information of such members of the Cabinet as are
interested in this subject, and also for the information of Gepp
[2] and his Organisation, and of Wickens [3] and such other men as
may be taking a particular interest in questions of economic
research in Australia. [4]

With this idea in mind, I have at the conclusion of my report set
out, I hope clearly, the reasons which lead me to believe that it
is very desirable that Australia should be effectively represented
on the Consultative Committee. I am myself convinced that we have
a good deal directly to gain by my serving on this Committee, and
also that it is safer for us to be present than absent. The
Consultative Committee is not likely to meet more than once a
year, and therefore it cannot be regarded as a very heavy tax on
one's time.

The first three days of the conference were rather boring. It was
probably necessary to have a prolonged plenary session, during
which the members of the Committee could express their views and
report as to how their own countries had reacted to the
resolutions of the World Economic Conference [5], but this
necessarily involved a tremendous amount of repetition and,
although a certain number of very interesting Statements were
made, on the whole things were not really interesting until we
broke up into sub-committees to tackle in a practical way the
problems before us.

The sub-committees were three in number, one large sub-committee
for general subjects and two small ones, one for the problem
presented by coal, and the other for sugar. Nothing of real
importance occurred in either of these latter sub-committees, but
on the general sub-committee a most interesting and important
cleavage appeared on the question of the appropriate action for
the League's Economic Organisation to take in order to further the
movement towards the reduction of tariff barriers.

I have no doubt that you are fully aware that at the World
Conference, W. T. Layton [6] was very much in the ascendant, and
his views were received with the greatest deference by that
Conference and have been embodied in many of its resolutions. As
soon as the General Sub-Committee got to work, it became obvious
that Layton was most anxious for a vigorous anti-tariff policy,
but it was also clear that a number of the other members from a
great variety of countries felt considerable doubts as to the
wisdom of what he was urging, and that the Chairman of the
Economic Committee of the League, M. Serruys [7], was opposed to
recommending any action which was not highly probable to be
brought to a successful and early issue.

I took the opportunity, in a very brief speech, of stressing the
need for caution and success if the prestige of the League of
Nations was not to be damaged by inopportune adventures in the
economic sphere. Rather to my surprise, I found that what I had to
say was very warmly welcomed and met with the approval of the
Chairman, M. Theunis [8], of M. Serruys, Sir Sydney Chapman [9],
Colonel Vernon Willey [10], and indeed of a considerable majority
of the sub-committee.

After the conclusion of the first session of the general sub-
committee, it became clear that Layton was not going to exert
anything like the same influence on the Consultative Committee as
he had done at the World Conference, and that the policy of
moderation and caution would be successful. I could also see that
the point that I had strongly urged on the British Delegation, and
indeed on several foreign members of the Committee, namely that
the basis of the League's activities should be the desirability of
increasing international commerce rather than the negative one of
lowering tariff barriers, would also be successful. If you have
time to glance through the report of the Committee and mentally to
compare it with the report of the World Conference of 1927 [11], I
think you will realise how definitely the present document differs
from the sweeping resolutions of 1927.

During the work of the general sub-committee it was found
necessary to set up an ad hoc sub-committee on agriculture, upon
which I served. On the latter sub-committee the important issue
was the relationship between the Agricultural Institute at Rome
and the League of Nations, about which I wrote to you in my last
letter. The resolution that was finally approved was to the effect
that note was taken of the demarche made by the Italian Government
to the Governments which supported the Rome Institute on the
subject of collaboration between Rome and Geneva, and the hope was
expressed that the Consultative Committee, through its Chairman,
M. Theunis, might be associated with the negotiations.

If the Commonwealth Government has not expressed any definite view
on this subject before the arrival of this letter, I very much
hope that you will be able to agree that there should be some
definite link between Rome and Geneva. The work of the
International Institute of Agriculture ought to be of great value
to Australia, but at the present moment this is not the case, and
it is necessary to secure more effective control and to get rid of
the heavy Italian dominance. [12]

During the conference the League of Nations was carrying out some
broadcasting tests to the Far East, and I was asked whether I
would agree to give a 2 minute broadcast in the hope that this
would reach Australia. [13] One of the Dutch Delegates broadcasted
for Dutch East Indian consumption, and the Assistant Governor-
General of the Philippines also took part. The messages were
relayed from Holland by, I think, the beam system, and it was
hoped that not only would Java be able to pick them up, but also
Australia, the Philippines and Japan. I concluded my very brief
and merely descriptive statement with a complimentary message from
the Secretary-General of the League [14] to yourself. As there has
been no reply I imagine that no message reached you. I am informed
that Java picked up the messages quite clearly, but there has been
no reaction from Australia, Japan or the Philippines. [15]

I shall be very glad to get back to inter-imperial rather than
international considerations, but at the same time I feel that I
must frankly state that I have learnt a great deal during my stay
in Geneva, and that I am quite certain it is very well worth
Australia's while to maintain close touch with the economic work
here, both for the sake of the excellence of some of the work
itself, and also because it is possible to safeguard our position.

Yours sincerely,
F. L. MCDOUGALL