My dear Prime Minister,

ECONOMIC CONSULTATIVE COMMITTEE

During last weekend I made a very careful draft of what I felt it
would be expedient to say at the Plenary Session of the
Consultative Economic Committee. I then cabled, giving you an
indication of the line which I proposed to take, and also asking
for certain information as to the views of the Commonwealth
Government in regard to the International Institute of Business
Management and also as to whether the Commonwealth Government
intended to sign the International Conventions on import and
export prohibitions and also on hides and skins, etc. I feel that
this cable should probably have been sent a few days earlier as it
has not given you very much time in which to answer.

With regard to the line which I propose to take at Geneva, I am
enclosing a copy of my suggested speech. Yesterday I saw Sir
Sydney Chapman [1], who is, as you are of course aware, the
British representative on the Economic Committee of the League and
who also attends the Economic Consultative Committee. I asked him
to look through the draft of my suggestions and when he had done
so, he told me that he thought that the line of country indicated
was very well worth while taking and he strongly supported my
doing so. I have also shewn the draft to Sir David Chadwick [2]
and to J. R. Collins [3], both of whom definitely approve.

I feel fairly confident that you will regard the text of my
suggested speech as being in close harmony with the Commonwealth
Government policy for, although I do not attend the Economic
Consultative Committee as a representative of the Commonwealth
Government, yet at the same time it is obviously desirable for me
only to express views which are sound from a Government policy
point of view. If, after you have received my report on the work
at Geneva, you definitely approve the line which I am adopting, I
think it would be a very good thing if you were to decide that
Australia should take a lead at the General Assembly in September
to try to get the Assembly's general approval. I feel fairly sure
that we could get a pretty solid British Empire attitude along
these lines. At this meeting at Geneva I shall have the
opportunity of consultations with Sir Atul Chatterjee [4] (of
India), with the Canadian representative [5], whoever he may be,
and of course with the British Delegation. [6] I shall also be
able to ascertain how far Sir Arthur Salter [7] and the
Secretariat would support this point of view. As far as the
British are concerned, my line of country will probably irritate
W. T. Layton but no one else.

OVERSEAS MECHANICAL TRANSPORT

I have received from the High Commissioner [8] copies of two
cables referring to the Overseas Mechanical Transport Committee.

These cables direct that I should represent Australia at the
Conference which is to be held to determine the allocation of
funds and to discuss the programme. The cables further instruct me
to consult Collins, presumably on the question of reasonable
allocation, and the second cable states that I am authorised to
promise an Australian contribution not to exceed 1200 spread over
5 years. I feel sure that there must be some error as regards this
sum. I have been in correspondence with Gepp [9] about this
subject for months and have received from him a personal
indication that Australia would be prepared to contribute a sum in
the neighbourhood of 10,000 spread over 5 years.

On the 26th July 1928 [10] I wrote to you expressing the view that
Australia would probably have to contribute somewhere about a
sixth of the 60,000. I therefore feel that the figure 1,200 in
the cable should probably read 12,000. I am arranging for a cable
to be sent to discover whether this is the case. 1,200 would only
represent about 2% and having regard to the very great extent to
which the whole subject interests Australia, I feel sure that the
Commonwealth Government is not proposing such a meagre
contribution.

LOW'S [11] CARTOONS

I enclose a recent cartoon by Low from the 'Evening Standard'
which seemed so much to the point that I felt sure you would like
to see it.

SIR ARNOLD THEILER [12]

On Monday morning I received rather a severe shock. As you know I
had been negotiating with Theiler on behalf of the C.S.I.R. for
the last three months. Theiler has raised a good number of
difficulties about going to Australia but he assured me that,
provided his health was right and the difficulties were overcome,
he would willingly undertake the trip. Some months ago I induced
Dr. Orr [13] to go to Basle with me for a consultation with Sir
Arnold and both Orr and I felt at the end of the discussions that
it was quite clear that Theiler was going to undertake the work.

Certain other small difficulties arose just before Easter so I
took the opportunity of again visiting Sir Arnold at Basle and
once again left feeling that all the troubles had been cleared up.

About a fortnight ago, Theiler wrote to the effect that he would
have to make the provision of a thoroughly trained Biochemist as
his personal assistant a definite condition of his accepting the
responsibility. I at once communicated with Orr who, in a most
self-sacrificing way, immediately promised Theiler to make any
member of the Biochemist staff at the Rowett Institute, who would
suit Theiler, available for the purpose. Theiler then informed me
by wire that he was satisfied and asked me to book the passage. I
received this wire last Thursday and then, on Monday, Theiler
wrote to say that he had had a final consultation with his
Doctors, who forbade him to go on the ground of his general
health.

I cannot avoid feeling that Theiler has been very reluctant and
has not treated us quite fairly in this matter. I am afraid that
Julius and Rivett [14] will be horribly disappointed.

So far as I can see what we must now do is to make some
arrangement whereby Orr can be appointed as consultant to C.S.I.R.

on Animal Husbandry questions and arrange for him to visit
Australia a couple of times during the next 5 years. If we could
arrange to get Orr to Australia next year for six months, I feel
sure that he could initiate a large portion of the work for which
we were relying upon Theiler.

THE BUSINESS MISSION

On Monday night the Empire Marketing Board entertained Duckham
[15] , Hugo Hirst [16] and Malcolm [17] together with the two
Secretaries-Archer and Henderson [18]-to dinner. The purpose of
the dinner was to have a business discussion with the members of
the Mission. Amery [19] was in the Chair, Ormsby-Gore [20], Elliot
[21] and Lord Stradbroke [22] were also present and most of the
members of the Board, with the unfortunate exception of Jimmie
Thomas. [23]

At the conclusion of the dinner, Duckham and Hirst both spoke
briefly and quite well but Malcolm made rather too long a speech.

We then adjourned to another room for the business discussion, and
Duckham opened up with the subject of Marketing with a suggestion
that arrangements should be made, whereby a combination of large
firms in Great Britain should be encouraged by the Government to
make long term contracts with Dominion producers of butter, dried
fruit and other commodities. Duckham said that the Mission had not
jointly discussed this proposal but he was just putting it forward
as a basis of discussion. Unfortunately it immediately became
clear that Duckham had really not given the matter any careful
thought because, as soon as various people started to ask him
questions, he said first that it might well be worth the
Government's while to give a combination of firms a guarantee
against loss and then contradicted this by saying that under no
circumstances should a subsidy by given.

Amery, who was in the Chair, did not take any firm hold on the
meeting but simply delivered a lecture on the immense superiority
of the tariff preference method of dealing with food over any
other. The discussion then became very desultory and everybody
felt it to be quite unsatisfactory.

It was a great pity that Duckham had not discussed the matter with
the other members of the Mission or at least prepared his own mind
much more thoroughly before he advanced the idea.

2.5.29

COLONIAL DEVELOPMENT

In my last letter I mentioned that I had been asked to write about
Baldwin's [24] proposals to assist Colonial Development through
the British Exchequer bearing the interest charges on
developmental loans. I am enclosing a copy of the article. If you
have time to read it, you will see that, after pointing out the
advantages to Great Britain of such a policy, I asked why the
proposal should be limited to the Colonies. I pointed out that if
Baldwin's main intention was to help the British export trade, the
extension of the scheme to some of the Dominions, and especially
to Australia and New Zealand, would secure more marked results
than in the case of any group of Colonies save possibly the West
African group.

Amery used my Nigeria v. Roumania argument in the House of Commons
yesterday. [25]

LABOUR AND THE EMPIRE

Since I last wrote, I have had a very interesting talk with Tom
Johnston [26] about the forthcoming Election and the attitude of
the Labour Party on Empire questions. Johnston told me that he
regarded the most outstanding political change that has occurred
during the last five years as being the attitude of the Labour
Party towards the British Empire. He told me that he had recently
issued a statement on the success of Nationalisation in which
practically the whole of the examples were taken from Empire
sources.

I asked Johnston to send me some copies of his pamphlet, a copy of
which I am enclosing, as I think it may amuse you. I do not
imagine that you would like this pamphlet circulated in Australia
for quite a number of reasons, including the fact that he has
described you as the 'Australian Tory Premier'-incidentally
getting your initials wrong. Johnston told me that his main
purpose in writing this pamphlet was because he felt sure that the
result would be that Labour candidates throughout the country
would find the information in it very useful and would thus be
forced to talk and think about the Dominions.

I asked Johnston whether, in the event of Labour forming a
Government after the Election, he anticipated being offered a post
in the Government. He said that, as he was a member of the Labour
Front Bench and had, at each Party Election to the Executive come
fourth or fifth on the list, he thought that MacDonald [27] would
certainly offer him a post. He went on to say that if he had any
choice in the matter, he would try to get one of the offices
connected either with the Dominions or the Colonies. There is no
doubt that it would be an interesting experience to have Johnston
as a Minister but he would need to exercise a great deal of
restraint in order to prove a success. [28] However, all electoral
matters will be settled by the time this letter reaches you.

Later

I have just received a correction of the cablegram from the Prime
Minister's Department in regard to Australia's financial
contribution to the Mechanical Transport Investigations. This
correction shows that I was right in assuming that 12,000 was
intended and not 1,200. I am sorry that I incurred the expense of
sending a brief cable as I might have relied upon a repeat
clearing up the situation.

Yours sincerely,
F. L. MCDOUGALL