My dear Prime Minister,

A telegram from Canberra in this morning's 'Times' indicates that
your Government had an extraordinarily narrow majority on a snap
division. The political situation must be such as to cause you
considerable anxiety and to occupy a very great deal of your time
and attention. [1]

My recent letters have been lengthy but this week there is little
of major importance to report.

MR. PHILIP SNOWDEN [2] AND THE EMPIRE

I enclose a copy of an article written by Mr. Philip Snowden which
appeared in 'John Bull'. It is entitled 'Is the Empire bleeding
Britain?' [3] I do not imagine that Snowden was himself
responsible for the title or for the cross headings. It is,
however, a most misleading and mischievous article.

Amery [4] rang me up and asked me whether I would prepare some
notes which would assist him in replying to Snowden's article in a
speech which he was going to deliver on Tuesday evening at
Whitehaven. I did this and I enclose a copy of my letter but I
pointed out to Amery that it was very difficult to make an
effective reply at a meeting at Whitehaven, where it was almost
certain he would not get anything like a proper report. I
suggested that Snowden's article was so misleading and illogical
that the best chance for an effective reply would be in the House
of Commons.

As a quite extraordinary comment on Philip Snowden's article, I
received by this morning's post a letter from Snowden himself
acknowledging a copy of a memorandum on the severity of American
Competition, which I sent him. I enclose a copy of Snowden's reply
which I am sure will interest you. I should incidentally mention
that this memorandum on the severity of American Competition is
the only one of the sets of notes which I have produced in
connection with the next Imperial Conference which I have felt to
be in any way suitable for widespread distribution. In
distributing it I, of course, excised all reference to the next
Imperial Conference and merely had it duplicated as a note on
American Competition. [5]

EMPIRE MARKETING BOARD GRANTS

Having promised to speak at the Royal Institute of International
Affairs on the subject of the Empire Marketing Board and
agriculture, I made a study of the directions in which the Empire
Marketing Board has promised financial assistance during the 2
1/2years in which the Board has been in existence. The result was
very interesting. It shows that from the commencement of the
Board's work up to the 31st December 1928, it has either actually
made or promised grants to the total value of 1,475,000 on the
research side. of this total 937,000 will be expended in the
United Kingdom and 538,000 overseas. I enclose a statement
shewing the direction in which the grants have been made. of the
grants promised, which are of special interest to the Dominions,
practically 60% are for Australia. [6]

I have not yet prepared the notes for my address on this subject
but will forward a copy to you by the next mail.

Today I had Mr. Brumwell [7], who is acting as Editor of the
'Times' during the absence of Geoffrey Dawson in India, to lunch.

As I think you know, I have always tried to maintain a fairly
close touch with the 'Times' and I have always found Brumwell
particularly interested in Empire development questions. Anyone
holding down the position of Editor of the 'Times' has an
unrivalled opportunity of obtaining a clear view of happenings in
this country and I think you will be interested in Brumwell's
appreciation of the existing political situation. He is under the
impression that most of the Tory Members of Parliament came back
from the Christmas Holidays feeling considerable confidence as to
the result of the General Election. Most of them have visited
their constituencies, discussed matters with their Agents and felt
cheered as a result.

Brumwell, however, thinks that the visit of the Prince of Wales to
the coalfields of Northumberland and Durham will lose the Tories
30 or 40 seats. He feels that the Prince's comments on conditions
in the coal areas were so unguarded as to have a very serious
effect upon public opinion. [8]

Brumwell does not anticipate that the Tories will get back with
more than a majority of, say, 20 and he believes that during the
next two or three years there will be a series of General
Elections until the third Party i.e. the Liberals, have been
eliminated. He expressed the view that under these circumstances
the prospect of a successful Imperial Conference is rendered
somewhat difficult. He seemed to think that two General Elections
during 1929 were by no means impossible. In general he agrees with
the idea that the next Imperial Conference should mainly be
economic.

Yours sincerely,
F. L. MCDOUGALL