[Written from Geneva]

My dear Prime Minister,

At the moment I am in the middle of the meeting of the Economic
Consultative Committee, and so far it is impossible to judge what
sort of results may be expected. [1] There has been an
extraordinarily large volume of documentation, a great deal of
which is of very substantial interest, but so far as the meeting
itself is concerned, we are now at the commencement of the third
day of a series of set speeches which, with one or two exceptions,
cannot be regarded as being of very great importance. The general
tenor of the speeches so far delivered has reflected a feeling of
criticism and pessimism regarding the attempts made through the
League of Nations to induce nations to lower tariffs. As you
already know, I spoke very definitely on this subject. My speech,
which was very incorrectly reported owing to the stupidity of the
League Press Bureau, appears to have given considerable
satisfaction to the whole of the British Delegation [2] with the
exception of W. T. Layton, [3] who naturally disliked it. The
other two parts of the British Empire represented, Canada and
India, have both stated that my speech represented their point of
view, and Sir Atul Chatterjee [4] made this statement in the full
committee. The representatives of a number of European nations
have told me that this point of view is one which their countries
would support. These included Sweden, Denmark and Poland.

With regard to the text of my speech, I made one or two very small
alterations to the copy I forwarded to you last week, the only one
of importance being that I changed the words 'there has been a
(growing feeling) that the tariff was handicapping production',
into the words 'there has been a (feeling in some quarters)...'
I spoke in the afternoon of the first day of the meeting. On the
second day the outstanding speech was made by M. Loucheur [5],
Minister of the Interior of France, who is Vice-president of the
Economic Consultative Committee. Loucheur made an extraordinarily
frank declaration that he believed there was little chance of a
reduction of tariff barriers except on the basis of the formation
of a series of European cartels to defend the position against the
immense increase in exports from the U.S.A., which he forecast,
curiously enough, almost exactly on the lines you used in your
speech at the Imperial Conference in 1926; that is to say he drew
attention to the very small percentage of American manufacturing
production which is now exported (8%), and pointed out that a
small percentage increase would have a tremendous effect on world
trade.

This letter is a very summary note, and I shall try to send you a
much fuller account by the next mail.

Yours sincerely,
F. L. MCDOUGALL