My dear Prime Minister,

LABOUR AND THE EMPIRE

By the last mail I wrote to you about a discussion with Mr. Harry
Snell M.P., the Secretary of the Labour Commonwealth Group. [1]
This week Tom Johnston [2] M.P. lunched with me and I had a short
talk with J. H. Thomas [3] M.P. The latter is very confident of
Labour success and was emphatic that Labour would prove an
excellent friend to Empire Development. He is, however, a very
facile person and, though most adroit, is not the person to go to
for long views. With Johnston I had a most interesting talk. He
thinks Labour has a fifty-fifty chance of forming a Government but
a much slighter one of obtaining a,clear majority. He said that if
a Labour Government was formed, it would last, at a maximum,
eighteen months.

We discussed possible members of a Labour Cabinet. He thought that
such new recruits to the party as Sir Oswald Mosley [4] and Capt.

Wedgwood Benn [5] might be offered office as both had become close
friends of MacDonald's. [6]Johnston seemed to think he would
probably be offered a post, but perhaps not of Cabinet rank. [7]
He expressed doubts about acceptance if such an offer was made but
one does not attach too much importance to such doubts.

I emphasized to Johnston the difference between the Tory and the
Labour Party in regard to the Empire. I said that the Tories were
publicly regarded as keenly pro-Empire so that, even when they did
little to justify such a belief, they still received the credit of
an Imperial attitude but that Labour was, in public estimation,
still suspect on Empire questions. It would, therefore, be of the
very greatest importance to a Labour Government to obtain, by
deeds, a good record on Empire matters. Johnston agreed with this
summing up of the position.

I then drew attention to the possibility of Labour being in office
for the next Imperial Conference and suggested that a typically
Snowdenian [8] budget might be the most unfortunate prelude to an
imperial Conference.

Johnston said that he recognised this danger but felt that all
depended upon who MacDonald put with his Cabinet. 'It would be
necessary for a couple of Ministers to be prepared to resign',
Johnston declared rather than allow a Labour Government to face an
Imperial Conference with preferences substantially reduced and
without any effective alternatives.

I shall arrange to see Thomas again shortly and talk about Empire
Marketing Board matters with him and also raise the Budget-
Imperial Conference issue.

I think there is no doubt that Labour will, if it achieves office,
maintain the Empire Marketing Board and indeed may take more
interest in its work than the present Government.

THE BALFOUR COMMITTEE REPORT [9]

I am forwarding to you a copy of the final report of the Balfour
Committee. I have marked some of the salient passages about Empire
trade but have not yet had time to read much of it. I have
referred to these passages in another letter forwarded to you by
this mail. I certainly think that this report marks a definite
stage in the Empire Development campaign. The remarks about
reciprocity from Great Britain are colourless enough but the
essential fact is the vital importance of the sheltered markets of
the Empire and the necessity to maintain the sheltering condition
is fully recognised.

TORIES AND THE EMPIRE MARKETING BOARD

In a public speech the other day Lord Hailsham, the Lord
Chancellor, after praising the work of the Empire Marketing Board
and claiming the fullest credit for the Government in having
established the Board, made the extraordinary statement that the
Labour Party had definitely declared that, if they were returned
to power, they would abolish the Board. Steps have, of course,
been taken to put Lord Hailsham right but I feel I must draw your
attention to this extraordinarily stupid remark. At least four or
five of the leading members of the Labour Party have definitely
declared, not once but several times, that the policy of the
Labour Party would be to support the Empire Marketing Board and to
endeavour to increase its functions in the interest of the orderly
and systematic marketing of Empire products.

MELCHETT-TURNER CONFERENCE [10]

I am enclosing a copy of the preliminary report of the Melchett-
Turner Conference, which has just reached me. The paragraphs about
Migration are perhaps important, although they are not very novel.

Yours sincerely,
F. L. MCDOUGALL