Dear Mr. Bruce,

I received by this mail two letters from you, one briefly
referring to the proposal that Sir Halford Mackinder should visit
Australia [1], and the other dealing with a variety of subjects.

[2]

I should like to express my deep appreciation of the very kind way
in which you expressed yourself in regard to the work upon which I
am engaged. It is, of course, both encouraging and heartening to
receive such a letter as yours of August 31st and I want to assure
you that I have not been in any way discouraged by lack of
response from Australia and that I quite understand that, with the
tremendous pressure to which you are subjected, I cannot expect to
receive anything like detailed replies to the long epistles which
I send you. I hope that, when the stress of the General Election
is over [3], you will have a little time in which you could
carefully consider the questions of our more important objectives
in Empire economic relationship and perhaps let me know your views
in the matter. While a man would be of a curiously insensible
nature who would not be cheered by receiving such a letter as you
have been good enough to write, two things would prevent me from
suffering from discouragement, the first being my deep feeling
that the job is of real importance to Australia, to Great Britain
and to the Empire, and the second that it is really a pleasure to
me to be allowed to do work in conjunction with yourself In my
last letter I told you that, during the stress of an Election
Campaign, I did not propose to worry you with lengthy epistles.

There are one or two rather important points arising at the
present time. The first is, however, a small one. The 'Spectator'
of September 26th referred to your speech about 'Law and order'
and suggested that you were reflecting on conditions in this
country. I felt fairly sure that the 'Spectator' was wrong, so I
wrote to them a letter, copy of which I enclose. This elicited a
small editorial comment. [4] I think that you will agree that this
action was desirable.

While on the subject of newspaper articles, I should like to draw
your attention to a short review of 'Sheltered Markets' which
appeared in the 'New Statesman' and which was written by Mr. G. D.

Cole, the Labour economist. [5] It is interesting and worth your
looking at as an indication of a labour point of view.

I am also enclosing another rather long article from the 'New
Statesman' which illustrates rather clearly the difference between
the attitude of the Labour left wing and Communists. This is also,
I think, written by Mr. Cole and is certainly worth reading.

IMPERIAL ECONOMIC COMMITTEE

Since my last letter, I have met a number of the members of the
Committee including the Chairman. [6] Mackinder is not at all
anxious to start work and I understand it is not proposed to call
the Committee together until the 3rd of November. He is lunching
with me on Monday next and I am going very strongly to urge him to
call the Committee a fortnight earlier. There is quite a large
amount of work to do on the Fruit Report if it is to be made a
valuable document and there is no conceivable reason, except
private engagements of the Chairman, why we should not be at work
now.

On Tuesday night seven members of the Committee dined together in
order to discuss the Fruit Report and I was surprised to find how
very general the attitude of criticism of the Chairman has become.

I have had a short talk with Mr. Amery [7] and hope to be able to
arrange for a longer talk in the near future but he is
tremendously preoccupied with his Mosul difficulties and can
hardly be expected to give careful consideration of other matters.

As I expect you know, he is being most bitterly attacked by the
whole of the cheaper press over his Mosul policy. [8] Personally I
hope that he knows what he is about and that there is no chance of
any rupture with Turkey, because I do not think that this country
would stand for war on any pretext at the present time.

I had a long and most interesting talk with Ormsby-Gore [9] on
Tuesday last. Two important subjects were discussed. The first was
about labour conditions in the Crown Colonies and Protectorates. I
explained to the Under-Secretary that the Labour Party were
beginning to be really interested in what they called the British
Commonwealth of Nations, i.e. the relations of Great Britain with
the self-governing Dominions, but that they persisted in thinking
that the British record in the Crown Colonies was stained by the
maintenance of frightful labour conditions in many parts.

I suggested that in all probability if we could get the
information we should find that labour conditions in most British
Crown Colonies compare very favourably with those in the
territories of other Colonial Powers.

Ormsby-Gore is, as you know, highly intelligent and he immediately
saw the point. He got Sir Samuel Wilson, the Permanent Head of the
Colonial side of the office, in, and came to a definite decision
that a circular confidential despatch should be sent to all the
Colonial Governments asking them to provide information as regards
labour, wages and conditions and it was further decided that
Ormsby-Gore should try to arrange with the Foreign Office for the
confidential collection of similar information by British Consuls
from the Colonial Possessions of Foreign Powers. When this
information is forthcoming in eight or nine months' time, a series
of judicious questions in Parliament ought to be able to elicit
some very striking answers which would show labour people that our
record in the Colonies is not what they imagine it to be.

The second subject I discussed with Ormsby-Gore was planning
ahead, so far as Imperial economic policy is concerned. I
suggested to him that unless the British Government worked towards
some objective, no striking progress was likely to be made and I
suggested that the objective should be an Imperial Economic
Conference at which results of real practical importance to Great
Britain, to the Dominions and to the Colonies could be arrived at.

I drew his attention to your remarks about the proper utilisation
of the Imperial Economic Committee. Ormsby-Gore promised to
interest himself actively in my points and thought that the best
thing would be to try to get Mr. Baldwin [10] to agree to the
formation of a Cabinet Committee to consider Imperial economic
relationships and to plan ahead so as to attempt to achieve
definite results.

I am not without hopes that my interview with Cunliffe-Lister
[11], reported in my last letter, and this very satisfactory
interview with Ormsby-Gore may not lead to a more active policy by
the British Government in relation to Imperial economic affairs.

BRITISH GOVERNMENT AND THE FIRST REPORT OF THE IMPERIAL ECONOMIC
COMMITTEE

As regards the way in which the British Government proposes to
handle the report of the Imperial Economic Committee and to
constitute the proposed Executive Commission, I understand that an
Inter-Depart-mental Committee has been set up to report to the
Cabinet as to what action the Government should take.

I have received a good deal of inside information about the way
this Committee and the President of the Board of Trade are viewing
things and I am not very happy about it because while I think that
they are going on rather wrong lines, I cannot at the moment see
how to alter the situation. This is chiefly due to the fact that
Mackinder seems ready to agree with almost any proposition made by
a British Cabinet Minister. I imagine that Mackinder feels that he
was badly in the wrong over the Canadian cattle business [12] and
is most anxious to put himself right with the Government.

Cunliffe-Lister told me that he wanted to include British
agriculture and British manufactures in the advertising scheme
proposed by the Imperial Economic Committee. I told him that I did
not think there would be any objection taken in Australia to the
inclusion of British agricultural products in the general
advertising scheme but I thought it

was decidedly dangerous for him to consider advertising British
manufactured products out of the 1,000,000 which the Government
had earmarked for Empire development and chiefly as a recompense
for preferences which they were not able to put into effect. That
is one difficulty. Another is that the Treasury appears to be
determined to keep the spending of the 1,000,000 under its direct
control. You know what a strong position the Treasury occupies in
British Governmental affairs and how it requires a man with a
considerable character effectively to resist Treasury pressure.

The idea of the Imperial Economic Committee was to constitute an
Executive Commission free from Treasury control and also a body
which would not be advisory but would carry out the intentions of
the Imperial Economic Committee. The present British Government
idea seems to be to create a new Inter-Departmental Advisory Body
to advise the Government upon the advices tendered by the Imperial
Economic Committee and to leave executive action to existing
Departments Publicity to the Board of Trade, Research to the
Department of Science and Industry and Breeding Stock to the
Ministry of Agriculture.

My difficulty in taking action is that while I have every reason
to believe that the information given above is sound and correct,
I have obtained it from a source that I cannot quote to British
Ministers. What I hope to be able to do is to suggest to Cunliffe-
Lister that it would be desirable to give the Imperial Economic
Committee an opportunity of commenting upon any scheme which the
British Government may consider desirable so far as the Executive
Commission is concerned and to tell him that the Imperial Economic
Committee would, in my opinion, like the opportunity of further
considering the allocation of the 65% of the 1,000,000 which they
recommended should be used for educational publicity.

RURAL CREDITS

Since dictating the foregoing, a copy of Dr. Earle Page's speech
on introducing the Commonwealth Bank Rural Credits Section has
come into my hands. [13] I have read it with the very greatest
interest, because it seems to me to provide in many ways the
keystone to a definite policy of orderly marketing for Australian
produce.

I would, however, like to make one suggestion, I think it would be
most desirable if I could be kept directly informed of steps taken
by the Commonwealth Government in the general direction of orderly
marketing and I wonder whether you could arrange for some one in
your Department to forward to me direct, at the earliest possible
moment, information about anything that has to do with (1) orderly
marketing (2) preference and (3) any other economic development.

Yours sincerely,
F. L. MCDOUGALL