My dear Prime Minister,

By this mail you will be receiving rather a mass of matter from me
but I am making up for lost time.

DEBATE ON BOARD OF TRADE VOTE

I think you should glance through the Hansard record of this
debate, as it illustrates in a very unmistakable way the general
agreement among parties as to the need for Empire development if
the British industrial problems are to be solved. [1] I would
particularly draw your attention to the speeches of the Rt. Hon.

William Graham [2], as the official spokesman for the Opposition,
and to that of R. G. Boothby. [3] Graham's speech was based upon
my memorandum on 'Great Britain's position in World Trade [4] and
I have marked the parts which are directly drawn from that
memorandum. It seems to me most significant to find the official
speaker for Labour calling for greater zeal in Empire development
and stressing the point that there is no necessary antithesis
between Empire trade and foreign trade. Boothby had obviously read
my paper on Empire Rationalization.

I draw your attention to these points not in any egotistical
spirit but because it is useful to realize the way in which it is
possible to influence opinion by quiet methods. [5]

GERMANY AND THE WORLD ECONOMIC CONFERENCE

At the Consultative Economic Committee a very interesting paper
was circulated. This was the opinions of the Economic Council of
the Reich upon the report of the World Conference. I am enclosing
the document. I have meant to forward it earlier but my illness
prevented my doing so. I think you may decide that the document
would be useful to your Committee on the Tariff.

21.6.28

YOUR LETTER OF 14TH MAY

Since writing the above, your letter of the 14th of May has come
to hand. I very much hope that you will have arranged completely
to clear up the question of the 75% of British labour or material
required in order to obtain British Preference. [6] Quite apart
from the question of the height of the Australian Tariff on
certain types of goods, it is of really great importance that the
method of administration of the tariff and the interpretation of
certain clauses should be made perfectly clear. There is a feeling
here that the treatment of British imports into Australia has not
always been quite equitable and I am sure that you will agree that
it is both important and urgent that that charge should be
completely disposed of.

I am glad that you found the eighth report of the Imperial
Economic Committee useful. The Sub-Committees of the I.E.C. are
now working at very high pressure and I hope that, before the end
of July, we shall have completed the reports on Tobacco, on Timber
and the preliminary survey on Agricultural Machinery. This latter
has proved a task of exceptional difficulty owing to the lack of
comparable information and statistics but it has also presented
problems of great interest and I think that the Committee will be
able to present a survey which will arouse quite wide interest and
thoroughly justify your proposal that the Terms of Reference of
the I.E.C. should be extended in the direction of these trade
surveys.

The Tobacco report will also, I think, be good but not of any very
special interest to Australia, except on the research side.

The Timber report is not yet sufficiently advanced to enable me to
form an opinion as to its probable value. My illness was rather a
serious factor from the point of view of the Timber report as I am
the Chairman of that Sub-Committee.

I was ever so glad that you and also your Pastoral Committee found
Duckham's [7] report on Grass Conservation stimulating and useful.

At a meeting of the Full Empire Marketing Board yesterday,
presided over by Amery [8], I arranged for Walter Elliot [9] to
refer to your cable expressing Australia's interest in this report
and further expressing the hope that the E.M.B. would continue to
study the problem. It was decided that the matter should be
referred to the Research Grants Committee for consideration as to
how best further exploration in the matter could be expedited.

In your letter you say that you expect that I shall spend a good
deal of time in trying to give information to the Business Mission
before they leave. [10] I have already written you under separate
cover a note about Sir Arthur Duckham [11] but I should like to
say how glad I am to have got just that line of encouragement from
you. I was not quite sure whether you would have rather that the
Business Mission should have come to Australia with their minds
free from any preconceptions about Australia but, having regard to
the short space of time that they will actually be in Australia,
it seemed clear that they should be given all possible information
before they leave. This, of course, is what the members of the
Mission themselves actually desired and, with the encouragement
which you have given me, I shall do everything in my power to
assist them to obtain a clear picture of existing conditions and a
very definite conception of the immense dynamic possibilities of
Australian development.

With reference to the question of foot and mouth disease, to which
you refer in your communication, I am enclosing an extract from
the 'Review of the River Plate' which has considerable bearing on
the subject. I had a talk with Lord Stradbroke yesterday, who, as
you know, is now Parliamentary Secretary to the Ministry of
Agriculture. He tells me that the Ministry see the greatest
difficulty in doing anything to control the importation of beef
supplies from the Argentine and further stated that, although the
Scientific Veterinary Authorities had definitely proved that the
virus of foot and mouth remains virulent in chilled or frozen meat
for a very considerable period, yet the Ministry had not been able
definitely to connect meat imported from the Argentine with any
individual outbreak of the disease in the United Kingdom. At the
same time, farmers and the Agricultural Members of Parliament are
beginning to take a very active interest in this question and I
think it highly probable that, in the course of the next year or
two, the British Government may find itself forced to take some
form of definite control over importations of meat from infected
areas. [12]

ECONOMIC ACTIVITIES OF THE LEAGUE OF NATIONS

I do not know whether you are aware that, at the last meeting of
the Council of the League of Nations, the report of the
Consultative Economic Committee was presented to the Council and
in the discussion on that report the Italian Member of the Council
raised the whole subject of the League of Nations Economic
activities. [13] I am obtaining, through Major Fuhrman [14], the
Minutes of the discussion and hope to be able to forward them to
you by the next mail.

I had a very interesting talk on this subject with Major Walter
Elliot last night. Elliot expressed the view that he was equally
convinced of two things in connection with Geneva; firstly that,
on the whole, the work of the Economic Organization of the League
was good and, secondly, that the work of the International Labour
Office was bad. We discussed the Italian caveat and I made the
suggestion to Elliot that, as the British Empire contributes a
very large percentage of the annual budget of the League of
Nations, the British Empire Delegation at the next Assembly should
be prepared to support a reasonable continuation of the economic
activities of the League, provided that it was clearly understood
that the work undertaken by the Economic Organization should be,
to a large extent, work of which the British Empire countries
approved. Elliot said that he thought this was a particularly
useful suggestion. We agreed that one of the most important
factors for Great Britain and the Dominions at the present stage
of things was the possibility of the peoples of these countries
obtaining a really clear picture of where the British Empire
stands in relation to the progress made by other countries, and
also that the realisation of this position must depend upon the
provision of full, clear, comparable information and statistics
and further that an International body, such as the Economic
Organization of the League, was far the best source of such
information.

I propose to go more fully into this subject and hope to write to
you by next mail giving a considered opinion on the views
expressed by the Italian Member of the Council and further
elaborating the point which I have just made above. I want to do
this as soon as possible so that you may give it your
consideration and perhaps inform the Australian delegation as to
the line of action which it should be prepared to take.

Yours sincerely,
F. L. MCDOUGALL