My dear Prime Minister,

In my last letter I referred to the effect of the Most-Favoured-
Nation Clause on the prospects of a Dominion being able to make
satisfactory arrangements with Foreign Countries for the marketing
of primary products.

During the last few days, a great deal of press publicity has been
given to the effects of the German-South African Treaty [1] and I
prepared a note on the subject which I sent to Sheldrake [2], the
Editor of the 'Times Trade Supplement' for editorial use. He had
already prepared something himself and is blending his own stuff
with mine so as to give a true picture of the situation.

I am enclosing my note because the article will not be published
until tomorrow. [3] I should be extremely interested to know to
what extent you think the points set out in the enclosed statement
affect the possibility of Australia making satisfactory trade
agreements with foreign countries.

CHAMBERS OF COMMERCE

Yesterday I had lunch with the Secretary of the Associated
Chambers of Commerce. [4] He was anxious to discuss the action
that the Associated Chamber was prepared to take along the lines
of my address to the Sheffield Chamber of Commerce. [5] He said
that his Directing Committee was very much impressed with the
desirability of early action to elucidate the point of view of
British commercial interests before the next Imperial Conference,
and that a decision had already been reached whereby the
Associated Chambers of Commerce had agreed to set up a special
small Committee to consider the economic question in connection
with the Imperial Conference and that the Associated Chambers had
sent letters to the Federation of British Industries, the Chamber
of Shipping and to the Banking Association, asking them if they
were prepared to take similar action. He told me that he
confidently expected to get these four Bodies all working on the
problem after Christmas.

This I think is a very good move. In 1923, about two months before
the Imperial Economic Conference met, the President of the Board
of Trade [6] sent for these four Bodies and asked them to prepare
their views on the subject of the Imperial Economic Conference.

This time we shall have these Bodies starting to examine the
matter a year in advance and it is probable that they will make
the President of the Board of Trade consider the problem instead
of vice versa.

IMPERIAL AGRICULTURAL BUREAUX

The public announcement in regard to the proceedings of the
Imperial Body, which has recently been considering the formation
of the new Imperial Agricultural Bureaux, appeared in the Press
today. I enclose a copy of the statement and a quite excellent
leading article from the 'Times' and also an announcement of the
position of the Empire Marketing Board to support an extension of
Onderstepoort Veterinary Research Station in South Africa (Sir
Arnold Theiler [7]).

MECHANICAL TRANSPORT

The Imperial Mechanical Transport Directing Committee is just
commencing to function. A press announcement, together with a
special article by General Hammond [8], appeared in the 'Times'
last week and at the request of Ormsby-Gore [9], I wrote a letter
to the 'Times' pointing out how important this move was from an
Australian point of view. [10] I enclose a copy of my letter.

IMPERIAL ECONOMIC COMMITTEE

The Imperial Economic Committee recently held a meeting at which
an important discussion occurred on principles. This was
occasioned by the fact that the Committee is about to commence a
series of investigations into raw materials whereas, apart from
Timber and Tobacco, it has up to the present time only
investigated Foodstuffs.

It was generally agreed that the principle of voluntary
preference, which we had advocated in all our Foodstuff reports
and also in our Tobacco and Timber Reports, would not be
appropriate in Raw Material Reports. It was, therefore, decided
that the Committee should prepare a comprehensive list of raw
materials and should append thereto what in effect would be a
report on the significance of an examination of raw materials to
the cause of Empire Development. A very small Sub-Committee was
appointed to prepare the draft of this report, the Committee
consisting of the Chairman [11], M. M. S. Gubbay, the Managing
Director of the P. & O. Banking Corporation [12], and myself,
together with Sir David Chadwick. [13]

Yours sincerely,
F. L. MCDOUGALL