My dear Prime Minister,

In my letter of the 20th June, I wrote to you about the economic
activities of the League of Nations and drew your attention to the
attitude of the Italian Delegate [1] at the 8th meeting of the
Council of the League-I am now enclosing a summary of the
discussion that then occurred.

A conversation which I had yesterday with Tom Johnston [2] M.P.

has given quite a new importance to the whole subject. I found
Johnston in a state of barely repressed fury over the I.L.O. and
all its works. For a couple of years he has been trying to obtain
from the I.L.O. information about wages and conditions in
industries that compete with either British industrial commodities
in which he is interested, or with Empire products in which he is
interested, the two things which he has specially taken up being
the jute industry of Dundee, for which town he is the member, and
the comparative wages and conditions in the Argentine and
Australia with reference to the question of meat supplies for the
Army and Navy. He has never been able to get anything of any use
out of the I.L.O. and definitely raised the question with a senior
member of the I.L.O. staff who happened to be visiting London and
was entertained by some of the Labour Party the other day.

I naturally encouraged Johnston in his attitude of hostility to
the I. L. O. on its present basis and I think it quite likely that
he will take an early opportunity of giving expression to his
views in Parliament. Johnston takes this thoroughly sound
attitude. He says that in order really to obtain the backing by
British Labour for Empire development, it is necessary to connect
Empire industries, and especially industries in the Dominions,
with the idea of good labour conditions. To do that
satisfactorily, it is necessary, in his opinion and in mine, to
have from, if possible, an International authority definite
information about wages and conditions in the various countries
and that that information should be, as far as possible, upon a
comparable basis. He maintains that this should obviously be one
of the most important functions of the I.L.O., or, alternatively,
of the Economic Section of the League of Nations.

I explained to him that, at the present time, the Economic Section
of the League cannot touch wage questions because that is
recognised as being the definite province of the I.L.O.

Johnston told me that this week there have been long and heated
discussions in the Executive of the Labour Party on the proper
attitude of the Party to the recrudescence of strong activity in
regard to the safeguarding of industries, which has become obvious
in the Tory Party during the last few months. As the result of a
final meeting, which he said lasted until 3 a.m., he was able to
obtain a unanimous decision that the Labour Party, instead of
using the direct negative, should put forward their own
alternative scheme, namely that where goods were produced under
sweated labour conditions, International action should be sought
for to boycott the importation of goods so produced. This policy
is, I think, impracticable but the fact that it is likely to be
put forward as the official Labour point of view will certainly
cause a much stronger demand for information through Geneva.

In my official report to you on the work of the Consultative
Economic Committee [3] and in recent letters, I have been
stressing the importance to Australia, and to the whole Empire
development move, of liberal provision of comparable information
about the industry, agriculture and trade of the more important
producing nations of the World and I have emphasized that an
International Body is the only really sound source of such
information. I have also given you my opinion as to the high level
of the work of this description which the Economic Section of the
League is capable of producing,
Having regard to the whole situation, I should now just like to
urge that you should give this question careful consideration and
I hope come to the conclusion that the instructions given by the
Government to the Australian Delegation to the Assembly in regard
to the economic work of the League should be of such a nature as
to allow the Australian Delegation scope to cooperate in any
general Empire policy in regard to this matter which may have been
evolved by September. One would like to see some arrangement
which, without in any way glorifying the economic work of the
League itself, would tend to concentrate the work of that
Organization along more useful lines and would, at the same time,
either directly or by implication register a certain censure of
the I.L.O. for having neglected to provide information on wages
and conditions which is obviously essential if progress towards
levelling up countries which produce goods under sweated labour
conditions with those who are more advanced is to make any real
progress.

I am going to discuss this matter with Sir Harrison Moore [4], who
is now at Australia House, and I shall certainly return to it in
later letters.

Yours sincerely,
F. L. MCDOUGALL