My dear Prime Minister,

I am forwarding by this mail my official report to you on the work
of the Economic Consultative Committee [1], but I am anxious to
accompany it with comments of a type which would be quite
unsuitable for publication.

Firstly you may be interested to know that the general atmosphere
was rather pessimistic so far as the tariff issue was concerned.

No one really appeared to think that nations were going to take
any direct action at least in the near future as regards the
lowering of their tariffs as a consequence of the resolutions of
the World Economic Conference. The fact that during the actual
meetings of the Consultative Committee reports were appearing in
the press about the intentions of the United States of America as
regards the upward revision of its tariff, made any optimistic
attitude practically impossible. Loucher [2] made a singularly
frank declaration in favour of the formation of a series of
European cartels which, he said, should be used to counter the
coming great increase in American competition. This view found
little support, but I think chiefly because it was felt that what
Loucheur was really interested in was not European trade but the
national interest of France. I am enclosing an extract from a
speech made by Herr Lammers [3], one of the German delegates, and
also an extract from Loucheur's.

Secondly, you will be glad to know that the point of view of which
you have so definitely approved, namely that the League of Nations
should place the international economic information service in the
forefront of its programme, received very substantial support. I
brought it forward in my first speech [4], and then in committee
secured the inclusion of a series of paragraphs which culminated
in a definite request to the Economic Organisation to re-study the
resolutions of the World Conference on industrial information and
to do its utmost, in collaboration with the appropriate national
authorities, to secure a greater provision of comparable data. The
printed report will probably not be ready for some days owing to
the necessity for exactly harmonising the English and French
versions, but I am enclosing a copy of the draft report, in which
of course there were some amendments, and I have marked the
portions referring to industrial information. The other general
idea which you have so strongly held, namely that it is dangerous
for the League of Nations to attempt in any way to dictate to
States on economic policy, was the basis of some quite vigorous
discussion at the final plenary session.

The report of the committee on commercial policy which came up for
discussion included a paragraph which I have also marked in this
report, which in its original form drew the attention of nations
to the 'permanent rules laid down by the Economic Conference' and
recommended that Governments should when submitting tariff bills
to their parliaments 'try to show that these bills are in
conformity with the policy recommended by the Conference of 1927',
and further 'should, if necessary, explain their reasons for any
slight departure from that policy'. I strongly opposed this draft,
pointing out once again the necessity for a certain realism, and
when it became clear that the Conference was anxious to include
some general reference which might draw the attention of
Governments to the desirability of bearing in mind the World
Economic Conference resolutions when framing tariff measures, I
submitted an alternative draft which was, after being supported by
the British delegation and by the French, unanimously accepted. In
order to avoid worrying you to look through the draft report, I am
enclosing the original text and my amended text which was finally
incorporated.

Another of the draft reports contained a reference to the
'economic policy of the League of Nations'. I drew the attention
of the British Delegates [5] to this and asked them to secure the
excision of any suggestion that the League of Nations had a
definite economic policy. I told them that I would prefer them to
do it as I was already opposing a good number of points. They
agreed and the undesirable phrase was omitted.

At the end of the draft report on general questions there had been
inserted a reference to the work of various international bodies
which had during the past year commended the resolutions of the
World Economic Conference to the attention of nations. The chief
body referred to was the International Chamber of Commerce, but a
congratulatory reference had also been made to the Federation of
League of Nations Societies, and particularly in regard to a so-
called international conference which had been held under the
auspices of this Federation at Prague in 1928. This Conference at
Prague had been the occasion for a number of British free-traders,
including Sir Hugh Bell [6], to claim that the World Economic
Conference had endorsed the free trade point of view. I therefore
proposed the excision of all reference to the Federation of League
of Nations Societies. This proposal, coming as it did during the
last half hour of the plenary session, was regarded with some
consternation by the Secretariat and I was very strongly appealed
to to withdraw my amendment. Having regard to the very late stage
of the discussion I decided that it was just as well to be content
with a protest and I therefore withdrew on the understanding that
there would be incorporated in the minutes of the Conference my
protest against an organisation such as the Federation of League
of Nations Societies being regarded as an economic authority, and
my comment that the so-called International Economic Conference at
Prague had made the mistake of confounding the policy of Freedom
of Trade which was adopted at the World Conference, with the dogma
of Free Trade. I found at the conclusion of the session that a
very considerable number of delegates were strongly in sympathy
with this protest. These included the Chairman, M. Theunis. [7]

The amount of time wasted at this Conference on the delivery of
set speeches convinced everyone of the necessity for an alteration
of procedure, and I think it is fairly certain that delegates will
be required to submit any set statements in advance and that these
statements will be duplicated and circulated. We shall then have a
debate on the general documentation, in which in all probability a
time limit for speeches will be adopted. This will certainly lead
to a much more useful discussion and I think to more satisfactory
results.

There are two other points that I want to deal with in this
letter. The first is the relationship between Rome and Geneva on
agricultural questions. The Agricultural Sub-Committee brought
forward a proposal that the Economic Consultative Committee should
recommend to the Council of the League the appointment of a small
body of agricultural experts, who should from time to time meet
the Economic Committee of the League and advise it on matters
concerning agriculture or where agricultural interests were
affected by questions concerning general commercial or industrial
policy which were being dealt with by the Economic Organisation.

In the discussions at the plenary sessions the representative of
the International Institute of Agriculture at Rome and one of the
Italian delegates, M. Belloni [8], attacked this proposal. The
representative of the Institute took the ground that the
appointment of such a body would infringe the charter of Rome to
deal with all international agricultural questions. This protest
left everyone entirely unmoved because it is obviously stupid to
imagine that one body such as the International Institute can
claim the sole right to consider international questions affecting
agriculture, and further that a body with a total income of
50,000 as is the case with Rome simply has not got the resources
to make good its claims. M. Belloni took a much cleverer ground in
that he thought if the right of agriculture to have a body of
experts to advise the Economic Organisation of the League of
Nations was admitted, it would be equally proper to arrange for a
body of experts in regard to any other economic question. I
proposed a compromise to the effect that the small body of
agricultural experts should be regarded as a purely temporary
measure to enable the Economic Organisation thoroughly to
appreciate the outstanding agricultural problems. Belloni was
prepared to accept this, but it did not meet with the approval of
the agricultural people, specially the French. There arose
therefore the question in regard to reservations which I have
dealt with in my official report.

The other point to which I want to draw your attention is one
affecting the International Management Institute and the general
question of standardisation. I shall be writing to you a separate
letter about the International Management Institute [9], but a
very important question arose in the sub-committee on industry.

The draft submitted to the sub-committee contained a
recommendation that the International Management Institute should
work in the closest harmony with the International Standardisation
Association. This International Standardisation Association is a
body in which German influence is predominant and which is
suspected of working for the adoption of German or at least
continental standards. I pointed out that as neither the British
nor American Standardisation Associations were associated with the
so-called International Standardisation Association, it was very
undesirable to make any such reference, and the draft was amended
accordingly. I was very glad to find that the Director of the
International Management Institute [10] is keenly alive to the
necessity of avoiding the support of what is really a European
standardisation interest. You will of course agree that the
adoption of engineering standards may be an even more potent
factor in influencing the direction of trade than tariffs.

There is one final point that I particularly want to make before
concluding this letter. I should like very strongly to recommend
that the question of the attitude of the various portions of the
British Empire to (a) the Economic Organisation of the League of
Nations, (b) the International Labour Office, (c) The
International Institute of Agriculture at Rome, and (d) The
International Management Institute, should be discussed at the
next Imperial Conference, and I think that these items should be
placed on the agenda of the economic side of the Conference and
that proper documentation briefly setting out the objects of these
Organisations, and, in so far as Great Britain or the Dominions
may desire, regarding the present attitude of the various parts of
the Empire to these bodies, should be prepared and circulated in
order that there might be a really useful discussion on these
points at the Conference. It is quite clear that if the British
Empire delegates at Geneva or at Rome take similar ground in
dealing with these problems, we shall be able in the course of a
year or two to bring about the type of amendment that we should
desire.

Yours sincerely,
F. L. MCDOUGALL