My dear Prime Minister,

ECONOMIC RESEARCH

In my letter of the 19th June, in which I commented on the
confidential report of the Tariff Committee [1], at the end I made
certain suggestions about an economic research. Casey [2] has
since sent me a cutting from the 'Herald' of the 26th April, which
states that the Commonwealth Government has decided to appoint an
Economic Council for Australia.

As I have heard nothing further about this, I am wondering whether
the 'Herald' made an intelligent anticipation or whether it is
true that you are contemplating such a move. I should, of course,
be extremely interested to hear about it. [3]

Knowing how profoundly you are convinced of the importance of
really sound economic research to the future of Australia's
development both in regard to primary and secondary industries, I
have some further ideas which I should just like to put briefly
before you. in a way, you will probably agree that I am doing a
certain amount of economic research here and at any rate that I am
attempting to keep in pretty close touch with the economic
tendencies and the actual facts of the world economic situation in
so far as it affects Australia or Empire trade. In doing so I
have, until about two months ago, been very materially assisted by
a most excellent girl who has acted as my Statistical Secretary
and who, as a result of about four years training with me, became
extremely useful. Unfortunately she has left to be married and I
am going to find it very difficult to replace her, especially as
she was paid a salary which I think most people would regard as
being very inadequate for the class of work which I frequently
asked her to undertake.

It has occurred to me that, as part of the system of encouraging
economic research, you might consider whether it would not be
possible to adopt some such system as the C.S.I.R. has for
scientific research students. What I have in mind is that, in
order to complete the education of post-graduate students, the
Council sends students to the United Kingdom, and indeed also to
America, with a studentship of the value of 300 a year for two
years, plus an allowance of 100 to meet special expenses such as
those incurred in travelling about while in this country. I was
wondering whether the same sort of idea might be applied to
economic research but on a very much more limited scale and that
one or two really bright post-graduates, who had done well in
economics, might be sent overseas to obtain a wider outlook which
is so essential if really sound economic research is to be
undertaken. I think that if one such postgraduate were attached to
me for a period of not less than 18 months and probably not more
than 2 years, such an arrangement would result in the student
obtaining a pretty wide grasp of economic facts and a thorough
understanding of the atmosphere in the United Kingdom and also in
Europe. It would also greatly assist me for I am continually
conscious that, although I do a very considerable amount of work
on this subject, the amount that could be done and the problems
that could usefully be investigated are far greater than I have
any hope of attempting to tackle as things stand. I do feel that
some such arrangement might be a substantial advantage to
Australia and I should like to suggest that you should give the
matter your careful consideration.

Referring once again to the question of special pieces of economic
research which I suggested might be farmed out to Australian
Universities and to a much smaller extent through me to Economic
Institutes in this country, I will merely make this one further
suggestion that, when the Commonwealth Government has decided to
whom to entrust the problems of economic research, that Body might
perhaps be asked to invite me to make suggestions so far as
liaison with this country is concerned.

Yours sincerely,
F. L. MCDOUGALL