My dear Prime Minister,

PASTORAL RESEARCH

By last mail I sent you several letters of which one long
communication dealt with the subject of Pastoral Research. [1]

I was extremely interested to find that, when Monday brought the
Australian mail, Julius [2] had sent me a copy of a long letter
which he had addressed to Lovat [3], Ormsby-Gore [4] and Elliot
[5] on the subject of the importance of Theiler [6] and Orr [7]
being in some way permanently associated with Australian animal
husbandry problems. This shows that Julius and myself were both
reacting in the same way to the stimulus of Orr's ideas. It will
be no easy task to arrive at some arrangement whereby Orr and
Theiler may be available to a certain extent for Australia but I
think it is quite possible that arrangements might be made whereby
they were appointed consultants, the one in Animal Nutrition and
the other in Animal Health and under such an arrangement would
spend three or four months in Australia every two years. In these
subjects there is an acute shortage of men of real vision and
ability and it will be possible to establish an overwhelming case
that their services should be available to the whole British
Empire.

BUSINESS MISSION

Last night the Empire Marketing Board gave a private dinner to the
Business Mission. Amery [8] was in the Chair and Duckham [9],
Clark [10] and Malcolm [11] turned up. I was sitting next to
Malcolm and this gave me my first opportunity of getting a long
personal talk with him, We arranged to meet again before he
leaves.

Now that I know all the four members of the Delegation personally,
it is clear that you have two men whose natural instincts will be
in a free trade direction, namely Duckham and Malcolm, and two men
who are more sympathetic towards a protectionist point of view in
Sir Hugo Hirst [12] and Clark. This makes a very useful mixture.

The latter part of the evening proved extremely amusing. It had
been arranged that there should be no speeches but when we
adjourned to the adjoining room, Walter Elliot got up and, in a
most humorous little speech, suggested that Duckham and Amery
should propose the health of Sir Warren Fisher [13], the Chairman
of the Industrial Transference Board [14], Elliot making the
statement that apparently the authors of the report of the
Industrial Transference Board were entirely unaware that there had
been an Imperial Conference in 1926 or that the phrase 'Equality
of Status' had ever been heard of.

Duckham played up to Elliot's lead quite well and then Amery made
a most amusing little speech on the Treasury mind.

I am quite sure that this was very good education indeed for the
Business Mission and probably a good deal better than anything
more formal. Amery and Duckham both stressed the point of view
that, provided sufficient energy was put into development,
migration would follow but that insistence on the transfer of
unemployed on the lines of the report of the Industrial
Transference Board would have a most detrimental effect.

I am arranging to have personal talks with each member of the
Business Mission during the last fortnight before they leave.

EMPIRE MARKETING REPORT [15]

I am enclosing two quite interesting comments on the report. The
first is a very able leading article from the 'Times Trade
Supplement' and the second is an interesting criticism from the
'Economist'. Having regard to the 'Economist's' point of view, it
is really interesting to find that the 'Economist' is prepared to
give the Empire Marketing Board a guarded blessing. [16]

EMPIRE MARKETING BOARD GRANTS

Entomological

Yesterday the Empire Marketing Board formally approved cooperation
with C.S.I.R. on the Entomological scheme. I have already sent you
a cable to inform you that the E.M.B. is going to contribute
62,000 spread over five years to Tillyard's [17] scheme. This is
much the largest single contribution that the Board has yet made
to any overseas project whether in the Dominions or in the
Colonies, and in consequence I added to my cable to you the
suggestion that you should send an appreciative cable to the
British Government-a suggestion which I am perfectly sure you will
not mind my making and one which you will probably act upon. [18]

Now that the Entomological scheme is definitely approved, I have
this to say, that I think in future proposals made by Australia to
the E. M. B. it would be wise for us not to appear to be opening
our mouths too wide. I suggest that it is very much to the
advantage of the Government and of C.S.I.R. to get British
cooperation on a number of schemes and therefore that we should be
prepared to put schemes forward in such a way as to make them
attractive from the Board's point of view. In this case we saddled
the scheme put forward to the Board with the whole cost of the
entomological services of C.S.I.R.; that is to say that the Board
was asked to pay half salary of Tillyard, half salary of Hill
[19], Tillyard's No. 2, in addition to half the salaries of all
the new men who were brought in to work the scheme. In my view it
would have been better for us to have excluded the salaries of the
two men whom C.S.I.R. have already engaged, namely Tillyard and
Hill. Please do not worry to take this question up with Julius and
Rivett [20], because I have written quite definitely to them in
the same way but if other schemes at a later stage come to your
notice before they are put forward, perhaps you would just
consider whether the actual proposition made to the E. M: B.

should not be limited to the expense necessary for the ad hoc
proposition and should not include all the more or less permanent
appurtenances.

Mechanical Transport [21]

The Empire Marketing Board yesterday also considered the
Mechanical Transport question and decided to make available
60,000, spread over five years, provided that assurances were
forthcoming that the Overseas Governments would be prepared to
make an equal sum available. In view, however, of the urgency of
getting to work on the problem and the length of time that must
necessarily elapse before Amery could have consulted the
interested Dominions and Colonies, it was agreed that the Empire
Marketing Board should find the whole cost of the first year's
work, namely 20,000, and therefore a lesser proportion of the
expense than 50% during the other years.

I have sent Gepp [22] a cable to let him know of this decision.

I wrote to you and enclosed the report of the Sub-Committee of the
Committee of Civil Research on Mechanical Transport on the 5th of
July. It is difficult to say what sort of sum Australia ought to
be prepared to find but everything depends on the number of
Overseas Governments who will come into the scheme. I should think
that Australia might contemplate an expenditure of (say) a maximum
of one-sixth of the 60,000, which is required from Overseas.

Should Canada, New Zealand and South Africa be prepared to come
into the scheme, then I think that Australia's contribution would
be considerably less than a sixth. On the other hand, should none
of these Dominions desire to come in and India also refuse to
contribute, then perhaps Australia ought to be prepared to provide
a little more.

I very much hope that we shall see some really important progress
as a result of this expenditure and I certainly think that a
businesslike arrangement has been made which promises well.

POLITICAL

On Tuesday the Labour Party moved a Vote of Censure on the
Government in regard to unemployment. [23] I had hoped to have
been able to get down to hear the Prime Minister's [24] reply but
that proved impossible. However, I took Sir Charles Nathan [25],
who had not heard a Debate in the House of Commons, down at about
6 p.m. and we listened to about an hour and a half's discussion. I
am forwarding the Hansard of the discussion with some of the
interesting parts marked.

The Prime Minister's speech was very thin and uninteresting and
has caused a great deal of disappointment in the Conservative
Party, especially of course among the safeguarders but that is a
subject to which I will return.

I was rather glad that Nathan should have been present when Tom
Shaw [26], speaking officially from the Labour Front Bench,
claimed that the Labour Party had as much interest in Empire
questions as any other Party. The same note was struck, in a later
stage of the Debate, by Philip Snowden. [27]

It is now unnecessary to emphasize the fact that the Labour Party
is absolutely convinced that they must have an Empire point of
view and that there are an increasing number of the members of the
Labour Party who sincerely believe in the immense significance and
importance of Empire development. Part of Philip Snowden's speech
was particularly from this point of view, because he said in
effect that Empire development resolutely prosecuted and supported
by the utilization of large sums of money would lead more rapidly
to the absorption of the unemployed in industry than any possible
deliverance through assisted migration schemes. Whether Philip
Snowden, as Chancellor of the Exchequer, would be prepared to find
the large sums of money which he speaks about so cheerfully when
in Opposition is, of course, an entirely different matter.

Earlier on Tuesday, I had a very interesting talk with Ormsby-
Gore. He, as you know, is just back after being away for five
months in Malaya, Java and Ceylon. Incidentally you may be
interested to know of the immense impression which Java made upon
him. He used the language of the Queen of Sheba and said that when
he beheld the achievements of the Dutch Administration of Java
'behold a half had not been told unto me'. He gave me a very
interesting short account of the way in which the political
situation struck him after being away for these five months. He
thought that the Conservative Party had developed a definite
malaise chiefly due to the fact that most of the Ministers had
been too long in the same offices. When one remembers that some of
the Ministers were in the Coalition Government, in Baldwin's first
administration and in his second, and the Labour interregnum was
only ten months, it becomes apparent that some Ministers have been
in the same office for eight or nine years. He also said that he
thought that Baldwin was a very tired man who was getting on the
whole more and more out of touch with the Party and with public
opinion. He further told me that, apart from routine business,
Amery's whole soul had become wrapped up in the idea of furthering
the protection campaign in Great Britain and he regarded this as
particularly unfortunate because it seemed so undesirable that the
Secretary of State for the Dominions and Colonies, who should be
the official interpreter of the importance of Empire Development
to British people, used almost every possible opportunity of
making a public speech to insist on the importance of the
safeguarding of iron and steel, with the result that there was
considerable danger of people once again associating together the
two utterly distinct questions of Empire Development and Home
Protection.

Ormsby-Gore did not seem to think that there was much likelihood
of a definite revolt of the safeguarders but he thought more
probably there would be a long slow battle in the Party between
the safeguarders and Winston Churchill [28] and that probably the
safeguarders would win.

Elliot confirms the view that there are very unhappy feelings
within the Tory Party at the present time and that a sense of
strong personal loyalty to Baldwin is mixed with a very
considerable degree of irritation, especially after his speech on
Tuesday.

Later

I have just had Keith Officer [29] to lunch and was amused to hear
from him that quite a little bit of excitement had occurred in the
House of [Representatives] owing to Layton's [30] reference to the
Report of the Tariff Board at the Consultative Economic Committee
at Geneva. This shows how the press is capable of entirely
distorting the relative significance of things. Layton, as an
illustration for a point in his speech, just referred to the
Report of the Tariff Board and I suppose occupied about one minute
in describing it to the Committee. There was no further reference
of any sort to the economic policy of Australia throughout the
whole of the remainder of the meetings of the Committee. As I
think I told you before, I was not even aware that the press had
cabled anything to Australia about Layton's reference.

Yours sincerely,
F. L. MCDOUGALL