My dear Prime Minister,

IMPERIAL CONFERENCE

Since last mail I have had interesting and very favorable
reactions to my article [1] about Labour's Opportunities and the
imperial Conference from Margaret Bondfield, the new Minister of
Labour, and Mr. George Lansbury. [2] I have also had my first
interview with Willie Graham, President of the Board of Trade.

Graham gave me the impression of being already a trifle
overburdened with the cares of office. He is only 41 years of age
but he certainly looked as though he were over 50. We had a fairly
long conversation in which, however, he made me do the bulk of the
talking. He seemed to appreciate the possibilities latent in the
Imperial Conference and I came away not dissatisfied with the
discussion.

Yesterday I lunched with Sir Sydney Chapman [3] who was very
anxious to talk about what practical measures could be taken to
benefit Empire trade, having regard to the political complexion of
the Party in office.

I was rather amused by the way in which he started the discussion.

He said that my article on Labour's Opportunity had been sent to
him by a friend with a request to know whether he had seen the
attack upon himself He, of course, referred to my remark that the
'preparation for previous Imperial Conferences had left almost
everything to be desired'.

We discussed the possibility of bulk purchase schemes based not on
State trading but on the creation of some super trading
organization which might, with Government backing, purchase for a
period of years the whole of the output of the Empire in some
commodity. I was interested to find that Chapman, who is both
timid and cautious, regarded the exploration of possibilities
along these lines as being very well worthwhile. He said that he
had been particularly interested in my suggestion of roping in the
Trade Unions but was not quite sure whether it would prove to be
practical politics.

Chapman said that he thought that, by the Imperial Conference the
time might well have arrived when the whole scope and work of the
Imperial Economic Committee might be reconsidered. He reminded me
that it was only due to Canada's objections that the I.E.C. had
been so limited in its scope. He felt that what was really
necessary was that the I.E.C. should become a really effective
general Economic Consultative Committee for the British Empire
with at least one member from each Overseas Delegation in close
and intimate touch with his own Government and with the whole of
that Government's economic policy.

I was particularly interested to get this suggestion from Chapman,
coming as it did without any hint in that direction from myself. I
told Chapman that if such an arrangement was to be made, it would
be quite essential to substitute some more effective Chairman than
Sir Halford Mackinder. Mackinder has certainly improved since
Chadwick [4] took charge but, even in his improved form, he is not
the man to inspire confidence in a really important Body. What I
should suggest would be that Mackinder should retain the
Chairmanship of the Imperial Shipping Committee and that the
I.E.C. should have some other Chairman. There are two men that, at
the moment, I should think very well worth considering for that
post-Hilton Young [5] or Ormsby-Gore. [6] On the other hand it
might be better not to have a politician at all.

27.6.29

AMERICAN TARIFF AND EMPIRE TRADE

During the last few days the papers have contained a good number
of references to the effect which the new American Tariff
Proposals [7] are having upon Canadian opinion. The 'Financial
News' republished the notes sent by the Commonwealth Government to
the Government of the United States of America and, unfortunately,
drew special attention to the rather unhappy word 'fear'. You
will, I have no doubt, be very well aware of the way in which that
word was used. It was that the 'Commonwealth Government feared
that the new American tariff proposals might force Australia more
into Imperial trade and less into American'.

A representative of the 'Financial News' came to see me and I
suggested that he should work out the balance of American trade
with the more important parts of the British Empire. He has done
this and concluded his article with a brief anonymous interview
with me. I am enclosing a copy of this article. I imagine that you
will agree with my suggestion that an Ad Hoc Imperial Economic
Conference to discuss the effect of the American tariff proposals
would be most undesirable and likely to prejudice the hopeful
negotiations about to start for Naval Agreement [8] and
Disarmament generally.

IMPERIAL ECONOMIC COMMITTEE

During the months of May and June there have been no meetings of
the Main Committee of the Imperial Economic Committee. This has
been due to two causes: firstly to the very formidable mass of
work which had to be carried out on the preparation of the draft
report on Pig Products and, secondly, owing to illness depleting
Chadwick's staff. In all the preliminary work on the report
Chadwick receives no assistance from Mackinder, who reserves
himself for actually presiding at meetings and putting in a
considerable amount of work on the final drafts of the report.

The draft of the Pig Report is now completed and I am rather
horrified to find that it runs into some 530 paragraphs. We are
most anxious to get the report completed by the end of July and
this is going to mean a great deal of work in the coming month.

The report has to be fully discussed by the Main Committee, it
will then be sent to a Drafting Committee, on which I am sure to
be asked to serve, and, after re-drafting, will have to be finally
approved by the Main Committee.

EMPIRE MARKETING BOARD

No meetings of the Empire Marketing Board or of its Main
Committees have yet been held since the new Government came into
office. I am looking forward, with considerable interest, to the
first meeting which will be presided over by Lord Passfield [9]-a
name which effectively disguises our old friend Sidney Webb. He
has decided to ask Dr. Drummond Shiels, the Under-Secretary of
State for India, to become the Chairman of the Research Grants
Committee, and to ask Lunn [10], the Under-Secretary of State for
the Colonies, to be Chairman of the Publicity Committee.

Drummond Shiels should prove a good appointment. He is very keen
on Empire development, was a member of the Commission on the
Constitution of Ceylon and, although no flyer, should do quite
well. I am going to urge at the first meeting of the Board that a
great deal more attention should be given to marketing than has
been the case in the past.

Yours sincerely,
F. L. MCDOUGALL