Dear Mr. Bruce,

On looking through my letters to you, two things strike me. The
first is that I have written each mail at some length since the
22nd January and have received no replies from you. [1] However, I
presume that you desire me to keep you as fully informed as
possible on all matters connected with the Imperial Economic
Committee and of the economic side of Australia's political
interest in this country.

The second point that strikes me is that, in giving you a running
comment on both the above subjects, I must occasionally express
opinions which subsequent events profoundly modify. I am taking it
for granted that it is unnecessary for me to explain this sort of
thing and that you will quite understand the position.

IMPERIAL ECONOMIC COMMITTEE

At yesterday's meeting of the full Committee an informal
discussion on the Chairman's [2] Speech, of which I sent you a
copy last mail, took place. At the suggestion of the Chairman, a
reversed order of precedence of comment was adopted in order, he
said, that the representatives of Crown Colonies, India, etc.

should have a full opportunity of expressing their views before
the senior Dominions and British Representatives spoke.

With the exception of a very qualified approval by India and the
Crown Colonies, each of the other Dominion Representatives and the
British Representatives condemn the main ideas incorporated in Sir
Halford Mackinder's speech on two grounds:

1. that it involved the creation of three new Committees.

2. that the idea of a Home Trade Agency and an Imperial Trade
Agency in Great Britain would lead to an intensification of the
differences between the home producer and the Empire producer.

3. that the idea of an Imperial Trade Agency to press the sale of
British goods in the Dominions was quite impracticable at the
present stage.

Sir Mark Sheldon [3] and Sir James Allen [4] laid particular
emphasis upon the British Government giving the necessary
legislation to enable the consumer to identify goods as home
produce, Empire or foreign, but Sir James Allen also insisted upon
the actual country of origin being shewn.

I supported Sir Mark Sheldon's attitude and stated that any
question of an Imperial Trade Agency to push British goods in the
Dominions should be left in complete abeyance until Great Britain
had definitely adopted some effective method of giving some form
of preference to Dominion goods and I urged that there was no
necessity to regard Dominion agriculture as competitive with
British but, on the other hand, the Dominion supplies should very
probably be regarded as complementary to the home grown supplies
and that we should both regard the foreigner as our joint
competitor.

The Committee was particularly impressed by an excellent speech of
Sir Thomas Allen, who represents the Wholesale Co-operative
interests and has presumably been placed on the Committee as the
most practicable representative of the British consumer.

He urged that the Imperial Economic Committee should continue to
function and that the existence of the Committee made the imperial
Trade Agency, the Home Trade Agency and the Empire Development
Commission unnecessary.

He acknowledged the need for some small Executive Body, subsidiary
to the Imperial Economic Committee, for the purpose of the actual
putting into operation [of] the schemes for the expenditure of the
Million Pounds and to undertake other executive action.

The Chairman, in reply to the debate, stated that his speech had
barely been put forward as an excitant of discussion. He
unreservedly withdrew the suggestion for an Imperial Trade Agency
in the Dominions and Colonies and he answered a few other points
raised during the discussion. It was decided that the matter
should be further discussed next week.

I particularly desire to mention that the way in which the
Chairman withdrew from what had become an untenable position
created a favourable impression and went a long way to undo the
unfortunate effect of his speech last week. [5]

Both the Canadian Representatives [6] were absent from yesterday's
meeting.

One most marked feature of the discussion was that South Africa,
Australia and Sir Thomas Allen all expressed the view that it was
a very great pity that the Million Pounds annual grant had been
introduced at all. The view was expressed that it would have been
far better if Mr. Baldwin [7] had stated that the British
Government was prepared to consider any proposals which the
Imperial Economic Committee might make which involved certain
financial grants by the Home Government.

The Committee, having practically disposed of Mackinder's
tentative suggestions, have now got to restart on constructive
proposals. Where these are to come from, apart from the Australian
Representatives, I do not know.

Sir Mark intends to concentrate upon the legislative methods for
making it possible to make the British consumer identify Empire
goods. I agree with him that this is fundamental and must be the
first step but I am quite sure that the Committee will go a good
deal further. Practically speaking, there are four methods by
which Empire foodstuffs can be encouraged in Great Britain. The
first is tariff methods which the Committee are debarred from. [8]
The second method is subsidies which the Committee feels should be
regarded as a last resource. The third would be by methods for
regulating imports other than tariff methods. This is a subject
which the Committee has not yet even touched on but it would
include variations of import licences and stabilization plans. The
fourth method is by organization coupled with advertisement.

I think that the Committee, in its preliminary report, will
concentrate on this fourth method but I very much hope that,
having made a first report, attention will then be directed
towards the third method. It seems to me that if we are to make a
report before the end of July, which I am quite sure is desirable
from many points of view, that the points we should be able to
deal with will be:

1. Identification by recommending the Home Government to pass the
necessary legislation to require all retailers of food products to
make all food offered for sale as 'Home grown', 'of Empire origin'
or 'foreign'.

2. Grading
The Committee to recommend the Governments of the Empire to
encourage effective organization of producers to achieve
standardization in uniform grading and packing.

3. Continuity of supplies of Empire produce
A similar recommendation to above.

4. Advertising
The mobilisation of the British consumer to prefer Empire goods.

Dependent upon (a) shewing him the advantage to himself and to his
own country of giving such preference and (b) informing him of the
fact that Empire goods are available.

5. Improvement of production and of quality of meat and fruit
Under this head recommendation that the Home Government should pay
freight to enable pedigree bulls and boars to be carried free;

also possibly certain recommendations for Empire work on plant
breeding.

6. Improvement in refrigeration methods
Recommendation that the British Government grant funds to the Food
Investigation Committee to extend the scope of work at the
Cambridge Low Temperature Research Station on frozen and chiller
beef and to provide, at a later stage, facilities for large scale
commercial experiments, such as could only be carried out on a
refrigerated vessel in actual transit. Further recommendations to
the Governments of the Empire to establish research studentships
at Cambridge so that a supply of highly trained scientists capable
of overseeing refrigeration methods might be available in the
Dominions and Crown Colonies.

7. Preference in public contracts
8. Executive
The Committee will do everything it can to avoid creation of any
elaborate machinery but it is realised that some executive is
needed so as to avoid expenditure being subjected to Treasury
oversight and Parliamentary debate. My idea is the creation of an
Empire Trade Board to consist of say three British Representatives
of whom one might well be the Chairman of the Imperial Economic
Committee assisted by paid (part time) technical advisers and by a
small staff Provided the Imperial Economic Committee continues to
function, it would be unnecessary to create any advisory body to
guide this executive.

The question of the future of the Imperial Economic Committee
obviously arises at this point. At present the Committee has ad
hoc references and the presumption seems to be that, provided it
shows itself a useful body, it will continue to receive ad hoc
references, I imagine that the full Committee might sit for four
or five months a year but it seems very desirable that a Sub-
Committee of the Imperial Economic Committee should be in
continual existence and act in an advisory capacity to the
proposed Empire Trade Board which would thus become the executive
counterpart of the Imperial Economic Committee. The Sub-Committee
could also undertake any elaborate investigations that the main
Committee desired. If the principle were adopted of one more or
less permanent and one replaceable member of each Delegation, the
permanent members would form the Sub-Committee which would be in
continuous existence and the main Committee would function as and
when desired with new blood from the Dominions and Colonies for
each Session.

PARLIAMENTARY

Parliament is having a ten days Whitsuntide Recess and there is,
therefore, nothing immediate to report.

I understand that you receive House of Commons Hansards regularly.

I want to draw your attention to the debate on Employment, which
appeared in Hansards Vol. 184 No. 78, and to the speeches of
Commander Burney [9], Columns 1630, 1631, 1632, 1633, 1635, 1636,
1637, 1638 and 1639, and also to the even more interesting speech
of Mr. Boothby [10], a young and extremely bright Unionist Member,
Columns 1666-1674. It was very remarkable that, after two Unionist
Members had made such Imperial speeches, the Government Speaker
[11] in reply should have stated that 'until Europe is in a
position to take our goods and consume what we produce, I believe
that we are in for a very difficult and serious time in the
industry of this country'. (Column 1679.) [12]

If you have not time to do more than glance at this Hansard, I
think you should read Mr. Boothby's speech and particularly the
latter part of it.

Yours sincerely,
F. L. MCDOUGALL