Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

Since my last letter, no developments of any importance have
occurred. It has been decided that the consideration of the First
Report, the Report of the Departmental Committee and of the
section of our Minutes which, as I reported in my last letter, had
been circulated as a Cabinet Paper, should be deferred until next
week's Cabinet Meeting when Lord Balfour [1] will be able to be
present.

This week's meetings of the Committee have been fully occupied by
the hearing of witnesses and the first meeting of the small
Drafting Committee has been summoned for Monday, at which I hope
the general outline of the Fruit Report will be discussed.

BROADCASTING

On Monday evening last I had my first experience at broadcasting
and delivered a talk on the Australian fruit and wine industry, of
which I enclose a copy.

I am glad to be able to inform you that the talk was quite
successful and was clearly heard all over the country. The British
Broadcasting Co. asked for a personal touch because they desired
these talks to be closely related to personal experience in
Australia.

'MANCHESTER GUARDIAN' AND EMPIRE TRADE

In to-day's 'Manchester Guardian Commercial' there appears an
interesting article on Empire Trade in which the Commonwealth
Government's policy of protection and preference and my book
'Sheltered Markets' are singled out for criticism. [2] I think
that the article is well worth reading because it puts, in quite
reasonable language, the attitude of intelligent free traders on
this subject. I have only had time to read it through once but
feel that I can probably write a useful answer to the article.

At the bottom of the second column the writer declares that my
view 'is inconsistent with the finding of the Balfour Committee'.

[3] I have gone extremely carefully into this and have come to the
conclusion that, on this particular point, my view is right and
that of the Balfour Committee is wrong. I think that a very useful
purpose would be served if it were possible to issue officially a
statement modifying paragraph 4 of the Report of the Bureau of
Commerce and Industry, as quoted in the first column. [4] This
modification might be in harmony with your historic speech at the
Sydney Agricultural Show [5] and make it clear that the protection
of industries in Australia was to be dependent upon those
industries being efficient. I enclose copy of the cutting
herewith.

I also enclose copy of a letter signed by Sir Joseph Cook from the
'Manchester Guardian Commercial' of to-day's date. [6]

AUSTRALIAN PRODUCE BOARDS

On Tuesday last, Major King [7], the first representative of the
London Agency of the Commonwealth Dairy Produce Board to arrive in
England, called to see me. We had a very interesting conversation.

I told Major King that I should be most willing to assist him in
any direction in which he thought my advice on matters of general
policy could be helpful, and I told him that, in my opinion, it
was impossible to exaggerate the importance of quiet and tactful
handling of the London business of Export Control Boards. I
pointed out to him that the New Zealand Meat Export Control Board
had been very successful in London owing to two things. Firstly,
that the Board possessed very large powers which it did not find
necessary fully to put into operation and, secondly, that its
London Representative cultivated the friendliest possible relation
with the trade and avoided stressing the fact that large powers
were in reserve. I was able further to tell him from personal
experience of the working of the Dried Fruit Board that there were
many pitfalls and dangers to be avoided.

I was very glad to find that Major King fully agreed with the
point of view that I put before him and seemed clearly to realise
that an attitude of assertion that control was being brought into
play in order to secure better prices for the Australian producer
might easily result in bringing the Press and the business world
into violent reaction against Commodity Control legislation in
general.

I am quite sure that the Dried Fruit Export Control Legislation
has very materially assisted the Australian industry this season
and that it will continue to give far more satisfactory results
than the lack of system which operated last year.

In some ways the Dairy Board will have a very difficult row to hoe
and this chiefly because butter is a much more essential article

of diet than dried fruit and because vested interests in butter
are much larger than in dried fruits. Provided the London Agency
of the Commonwealth Dairy Producers' Board do their work with
great tact, I have no doubt that very useful results will be
forthcoming. It is, however, obvious that any serious error in
policy made by any one Board, whether Australian or New Zealand,
would lead to bringing all Export Control Boards in this country
into bad odour.

At the present time I maintain pretty dose liaison with the New
Zealand Meat Control Board and I think it would be most useful if
occasional meetings of a representative of all the Empire Control
Boards could be held in London.

In reference to this subject, it will interest you to know that
Sir James Cooper's [8] job as Financial Controller of the Wembley
Exhibition has now come to an end and, although he has been asked
and has consented to act as one of the Liquidators of the
Exhibition, I understand from him that the Liquidation work will
not involve a very great deal of his time. Sir James Cooper's work
at B. A. W. R. A. and his recent experience with the London Agency
of the Dried Fruit Board and also his great general knowledge of
the City and British business renders him, in my opinion,
particularly valuable in connection with the views which I have
expressed in the preceding paragraphs.

IMPERIAL COUNCIL OF COMMERCE

The Imperial Council of Commerce is really a Federation of the
Empire Chambers of Commerce. This year Sir Edward Davson, one of
my colleagues on the Imperial Economic Committee, is Chairman. He
asked me to draft a resolution to put before the Imperial Council
of Commerce on the subject of the Imperial Economic Committee. I
enclose a copy of the resolution which was unanimously adopted by
the Imperial Council of Commerce on October 14th.

Yours sincerely,
F. L. MCDOUGALL