My dear Prime Minister,

LEAGUE OF NATIONS ECONOMIC ACTIVITY

It is now many weeks since I have heard from you and I am hoping
that, during the next fortnight, I shall get your reactions on my
communications in regard to Geneva.

I am somewhat hesitant about going forward with the idea of trying
to establish a British Empire point of view in regard to the
economic activities of the League of Nations without having
received your blessing on my project. At the same time the weeks
are slipping by and in another month the Delegations will have
left for Geneva. It is, of course, quite possible that no really
important issue in regard to the League's economic activities will
arise at the Assembly; on the other hand, in view of the Italian
notice [1], I think they will. If I do not receive any
communication from you within the next ten days (i.e. the next two
mails) I shall probably cable you on this subject.

ENTOMOLOGICAL RESEARCH

Many thanks for your cable of the 30th July which I communicated
at once to Amery. [2] We had a Special Meeting of the Empire
Marketing Board yesterday at which your cable was read and at
which Amery informed us that he was forwarding a copy of the cable
to Baldwin. [3]

Tillyard [4] and I have been able to make satisfactory
arrangements for entomological work at this end through Farnham
Royal Institute attached to the Imperial Bureau of Entomology.

There is every reason to anticipate that things will go with a
swing as soon as Tillyard gets back to Australia. He is certainly
undertaking a series of extremely difficult pieces of work but
success in one or two directions, and particularly with Blow-fly,
would mean a tremendous amount to Australia.

POLITICAL

This week has been one of alarums and excursions in the political
world, as a result of which it is now understood that the Prime
Minister has brought Joynson-Hicks [5] and Amery to heel and that
there will not be further indiscreet ministerial speeches, at
least in the immediate future.

I was dining last night with Sir Robert Horne [6] and he was quite
interesting on the subject. He said that Churchill's [7] free
trade declaration had caused the most intense annoyance among the
bulk of the Conservative Members of Parliament and had, in his
opinion, once again demonstrated the fact that it would be
impossible for Winston Churchill to be Prime Minister in a
Conservative Administration.

Horne claimed that he had been acting as a pacificator between the
discordant elements in the Party. As there is no doubt that Horne
has very considerable influence among the definitely protectionist
wing of the Party, I insisted very vigorously on the necessity for
keeping the two ideas of domestic protection and Empire
development separate. To this he agreed.

My own impression is that Horne is regarded as rather a light-
weight in Parliament but at the same time I must acknowledge that
no leading public man in this country shows a clearer, or perhaps
indeed as Clear, appreciation of the Empire problem as does Robert
Horne.

INDUSTRIAL TRANSFERENCE BOARD'S REPORT [8]

In my last letter I mentioned a dinner given by the Empire
Marketing Board to the Business Mission. At the conclusion of that
dinner, I spoke to Amery and Elliot [9] about the desirability of
a gentle and dignified reproof being administered by some
significant person to the atmosphere of this report in regard to
the status of the Dominions. We had a few minutes conversation
about who would be a suitable person to do it and I suggested John
Buchan. [10] Elliot, who is a great personal friend of Buchan's,
promised to tackle him on the subject. The result was a letter
from Buchan in the 'Times', of which I enclose a copy. [11] It is
a very mild, but, at the same time, quite useful reproof and I
thought it desirable to see that the Australian press cabled out
the gist of the letter. Buchan's letter drew a reply from Sir John
Cadman [12], of which I also enclose a copy.

SAFEGUARDING OF INDUSTRIES

I am enclosing an extremely interesting supplement published by
the 'Daily Telegraph' on the Safeguarding of Industry. It consists
of a series of articles by leading people expressing their views
for or against safeguarding. I have marked those which I think you
would find particularly worth looking at.

It is interesting to note that the two men who have strongly
emphasised the Empire point of view are Mond [13] and William
Graham. [14] I would especially ask you to read Graham's short
article. I do not know whether you still have your Committee on
the Tariff [15] functioning but in case you have, I am forwarding,
under separate cover, three extra copies of this supplement which
perhaps your Committee may like to study.

LOW'S [16] CARTOONS

I am enclosing another cartoon by Low which I am sure you will
find intensely amusing. Low's political sense is very acute and
his assumption that if Bolshevism came to England, Winston
Churchill would manage to become the head of the British Soviet is
quite delightful. I think you have met George Lansbury. [17] Low
has got an entirely typical attitude of expression on to his face.

The drawing of Lord Melchett is not unduly unkind.

I am also enclosing a rather interesting leading article from
yesterday's 'Evening Standard'. [18]

ESTIMATES COMMITTEE

I am forwarding a report of the Estimates Committee of the House
of Commons, because this contains their report on the finance of
the Empire Marketing Board. [19] The Committee consists of Members
of the House of Commons but a member of the Treasury sits with the
Committee and practically acts as a member. So far the Empire
Marketing Board has not had an opportunity of discussing this
report. I shall advise that we accept the recommendation to
appoint a Finance Committee but proceed without too much concern
with our publicity and research work and with our schemes for film
production. The Finance Committee will mean an additional wheel to
the coach but it does not seem to me a recommendation that can
safely be neglected.

THE TREASURY MIND

I particularly want to draw your attention to the attitude of the
Treasury to the Empire. Ever since I have been in England, I have
continually found that, on the whole, the Treasury are hostile to
Imperial developmental ideas and, as a body, the Treasury
Officials are uninterested in the British Empire but much keener
on co-operation with Europe and the United States of America than
with the Dominions. This statement may not be true in regard to a
number of individual members of the Treasury but I do not think it
can be contradicted as regards the general attitude of the
Treasury.

In this country, as you are no doubt well aware, all Senior Civil
Service promotions are made on the recommendation of the Treasury.

This results in the Department having an enormous influence with
the whole of the Civil Service and, through the Civil Service,
upon Ministers. Since the Empire Marketing Board was founded,
there have been several definite and direct attacks by the
Treasury upon the Board, to some of which I have referred in
previous letters.

I am told on very good authority that Sir Warren Fisher [20] has
definitely stated that he will do everything in his power to
secure the abandonment of the publicity activities of the Empire
Marketing Board. In the same way Sir Warren Fisher was the chief
protagonist in the attack on the research grants power of the
Board. There can also be no doubt that Winston Churchill, while
under the influence of the Treasury as Chancellor of the
Exchequer, has been, on the whole, hostile to Empire development
ideas. This is, of course, partly due to his personal dislike of
Amery.

Some years ago Lord Milner [21] told me that the Treasury were the
great stumbling block to Empire development ideas and, although a
great deal of progress has been made in the last two or three
years, I still have no doubt that the Treasury attitude is the
most difficult thing we have to contend with in England.

I am told that the original draft of the report of the Industrial
Transference Board was a dreadful document, lecturing the
Dominions in a most unpleasant way and that the Dominions Office
had to fight very vigorously in order to secure the necessary
amendments which finally made the report assume its published
form.

MINISTERIAL ATTITUDE To EMPIRE DEVELOPMENT

Probably very largely due to the influence of the Treasury but
also to the pre-occupation with immediate political affairs and to
the very difficult economic position in which Great Britain finds
herself, the attitude of Ministers on the whole to Empire
development has not been very helpful during the past two years.

Baldwin himself is, of course, quite sympathetic to Empire
development but does not give it any attention. Winston Churchill
on the whole has been rather hostile. Birkenhead [22] does not
appear to be interested. (This is a great pity which ought to be
remedied but I have not found the right method of approach.)
Neville Chamberlain [23] is very keen but absorbed with the very
large tasks of his own Department. Amery is, most unfortunately-as
I reported in my last letter-using every public opportunity of
dragging in the safeguarding issue and creating the danger that
the masses would associate local protection with Empire
development.

During recent debates on the economic position of Great Britain,
it has been most striking to find that the most vigorous
pronouncements in favor of Empire development as a policy for
securing Great Britain's economic position have come from members
of the Labour Party. I am sure that you will agree that this
general position is unsatisfactory. Owing to this apathy of
Ministers, the Treasury attitude to the Empire Marketing Board is
perhaps a real danger. I therefore want to make a suggestion which
I hope you will seriously consider. I should like to suggest that
you should send a personal letter to Baldwin stressing the
following points:-

(a) that you should remind him of the keen personal interest that
you take in the economic development of the British Empire;

(b) that, as evidenced by your speeches in England in 1923 and
1926, you have regarded the economic position of Great Britain as
being perhaps the most urgent problem in Empire economics;

(c) that you are convinced and you feel sure that Baldwin shares
your conviction that the development of the resources of the
British, Empire is the soundest way to place the economic position
of Great Britain on a far sounder basis than it is today. You
could remind Baldwin that, as a general statement, it is true
today to state that whereas foreign countries obtain 10% of their
import requirements from Great Britain, the overseas Empire as a
whole obtains 40% of its imports from Great Britain and a
considerably higher proportion of those imports in which Britain
is in a position to compete;

(d) It would be useful to express as your opinion the view that
the gradual development of secondary industries in the Dominions,
while naturally slowly changing the nature of British exports to
the Dominions, will not decrease the value and volume of the total
trade but is much more likely to increase it.

(e) that you feel sure that all that is necessary for the British
people resolutely to set their mind towards a policy of Empire
development on a bold scale is that they should be enabled to
visualise what the Empire means;

(f) that you should let Baldwin know that you had kept very
closely in touch with the work of the Empire Marketing Board and
that you had been very much impressed with two things: the way in
which it was beginning to succeed in making the British people
have an Empire sense and, what perhaps was even more urgently
important from a British point of view, making the Dominions
realise that Great Britain did really desire to assist them in
their developmental problems. You could illustrate this last
statement by referring to the splendid psychological effect in the
Dominions of the comparatively small sums of money which had been
allocated by the Board to co-operation with such 'bodies as the
C.S.I.R. in Australia and the D.S.I.R. in New Zealand.

(g) You could state your view that you regarded the continuance
and perhaps the intensification of the work of the Empire
Marketing Board as being of the greatest Imperial significance
because it is likely to lead, in the course of two or three years,
to all parts of the Empire beginning to visualise the Empire as an
economic unit and thus to prepare the way for much greater schemes
of interimperial co-operation which, when carried out, cannot fail
immensely to improve the economic position and strength of all
parts of the British Empire and particularly that of Great
Britain.

I do suggest that a letter somewhat along these lines reaching the
Prime Minister just after he returns from his much needed holiday
and before the work of the new session in November engages his
attention would be most beneficial. I do not know whether you ever
do write personal letters to other Prime Ministers within the
British Empire. If no such idea has yet been established, surely
it is desirable that it should be. I should be most interested to
know what you think about it and hope that you will see your way
to agree. 24

Yours sincerely,
F. L. MCDOUGALL