Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

Since my letter of April 23rd, the formation of the Sub-Committees
or Panels has been fixed. There are 3 Panels:

Panel A General Purposes.

Panel B Meat.

Panel C Fruit.

Sir Mark Sheldon [1] and myself are members of Panel A; Sir Mark
Sheldon takes Panel B, and I take Panel C. It is only in the case
of Australian Representatives that both delegates are members of
Panel A. This is due to the fact that the Chairman, Sir Halford
Mackinder, expressed a desire to the imperial Economic Committee
to have my services available on Panel A, in view of the general
nature of its reference and of my special economic knowledge.

The first meetings of the 3 Panels were held on Tuesday and
Wednesday of this week. The terms of reference were explored,
immediate witnesses decided upon and a certain amount of progress
made.

EDUCATIONAL WORK

I enclose a copy of an article which I wrote for the Times, and
which they published in the form of a letter, on the value of the
Empire to the British Cotton Industry. [2]

I am also enclosing the details of a suggestion which occurred to
me in which the educational value of Wembley [3] as to the
importance of the Empire to the people of Great Britain can be
improved. I have discussed this suggestion with the High
Commissioner [4] and agree with his view that it will be most
effective if it is put up from a British source. I have therefore
approached the Federation of British Industries and the Exhibition
Authorities, the latter through Sir James Cooper [5], and am
urging that the idea should be adopted. I think that you will
agree that the cumulative effect of all British exhibitors shewing
an effective form of the sample diagram, which I enclose, would be
very considerable.

PREFERENCE

The preference proposals in the Budget which was introduced on
Tuesday are only in one respect better than we had every reason to
anticipate from Mr. Baldwin's speech of December 17th. [6] The 4
reasons which I informed you of in my letter of 19th March [7] and
the proposals which I put forward to the British Government in
regard to increased preference on Canned fruits and dry wine have
not been adopted. The proposed duty on Hops with a third
preferential rate is the only novel point. [8]

I have discussed this on a number of cases with the National
Farmers Union, the Ministry of Agriculture, Mr. Amery [9] and with
Sir Sydney Chapman of the Board of Trade, and had urged at least a
50% preference. However, the proposed preference will amount to
about 2 7/8d per 1b. on Empire Hops and will be of very much
greater assistance to the Tasmanian growers than the preferential
clause under which the Hop Control operated. In actual practice
the preference under the Control system was almost entirely
illusory.

I have been much concerned owing to the date on which it is
proposed that the new preferences should come into operation,
namely July 1st. The new Australian and South African dried fruit
crops are now arriving in this country. I enclose a brief
memorandum on this subject which I prepared and submitted to the
High Commissioner, the Colonial Office, Board of Trade and which
Sir James Cooper has submitted to the Treasury. The difficulty in
the way is that the old established Treasury procedure is to
incorporate all deductions of Customs Duties in the Finance Bill
and not in the Budget resolutions. The date July 1st has been
fixed because it is anticipated that just prior to that date the
Finance Bill will have received the royal assent.

I have pointed out to Mr. Ormsby-Gore [10] (Mr. Amery is away), to
the Board of Trade and to Mr. Wardlaw-Milne [11], M.P., Vice-
Chairman of the Unionist Imperial Affairs Committee of the House
of Commons, that if they can find a method whereby the preferences
can be brought into immediate operation, it will have a very good
effect upon the Australian and South African dried fruit industry
and will afford them an opportunity of making a small but
exceedingly welcome gesture to Australia and South Africa which
may be of incalculable importance at the present juncture.

MY POSITION

I am still not in receipt of any reply from you to my cable of
April 16th. [12] Sir Mark Sheldon, however, has informed me that
he received from you a cable in reference to this subject. Sir
Mark asked me to show him the various cables that had passed from
you and from myself on this subject. Under these circumstances I
propose to postpone any further discussion on this matter until
next mail.

Yours sincerely,
F. L. MCDOUGALL