Dear Mr. Bruce,

INTERVIEW WITH MR. BALDWIN [1]

In my letter of October 22nd I reported that Mr. Tom Johnston [2]
M.P. had asked me to try and interest Mr. Baldwin in the Labour
Party Committee's Report on the Importation of Sweated Goods. [3]
I discussed the matter with Mr. Ormsby-Gore [4] and with Mr. Amery
[5], to both of whom Johnston had no objection to my
confidentially mentioning the idea. I then wrote and asked Mr.

Baldwin for an interview. I saw him on November 16th at the House.

I found he had never seen the Labour Report but, on looking at the
signatures, he became interested. Naturally he was quite
noncommittal on this point.

I took the opportunity of urging upon him the need for a forward
policy on Empire development. He told me that Amery had been
speaking to him about an Imperial Economic Conference in 1927 and
of the need for preparatory work. So some seed that I have been
sowing has found fruitful soil. I suggested the fuller utilization
of the Imperial Economic Committee on preparatory work. I do not
quite know your view of Mr. Baldwin. So far as I have been able to
form an opinion, I think he is entirely honest, quite shrewd, slow
in the uptake and a plodder. There is no possible doubt as to his
personal popularity in the House.

LABOUR PARTY

I have been invited by the Labour Commonwealth Group to address
them upon the work of the Imperial Economic Committee on December
7th. I suggested that they should also get Sir Thomas Allen, the
Wholesale Co-operative Representative on the Imperial Economic
Committee. To this they agreed and we ought to have a useful
evening.

Mr. Alexander [6] (Parliamentary Secretary to the Board of Trade
in the Labour Government) tells me that Mr. Ramsay MacDonald [7],
Lord Arnold [8] and himself are studying the possibilities of bulk
purchases from the Dominions as a Labour alternative to
Preference. This, I think, we may take to be a most useful sign
that they recognise the rising tide of Empire sentiment in this
country for they are all hard bitten free importers and by nature
internationalists who would not study Empire problems if they
could help it.

IMPERIAL ECONOMIC COMMITTEE

There is, as yet, no news as to how the Cabinet have viewed our
Reports. I believe it was considered at today's meeting. The first
meeting of the Drafting Sub-Committee was held on Monday. I think
we shall produce a really useful Fruit Report which will be of
considerable educational and also practical value.

I hope you will find time to give some thought as to how you would
like the Committee to be used in future. A cable will reach you
before this letter suggesting additional items for investigation,
probably Dairy Produce, Tea and Tobacco. I hope your reply, while
indicating acceptance, will urge a full scope of enquiry as
preparatory to an Imperial Economic Conference.

I should like to suggest that you should draw attention to the
vital importance of close settlement if migration schemes are to
go ahead and therefore of the urgency of considering how stable
markets can be assured to the products of close settlement, namely
fruit, wine, butter and pig products.

It appears that the Anglo-German Treaty [9] will make it extremely
difficult to advocate any form of Import licence system to assist
Empire trade. The Conservatives seem quite hopelessly dull on any
ideas in this direction except tariffs and of these they are
scared.

I am going to try to prepare for you a memorandum setting out
ideas as to how the imperial Economic Committee can most usefully
be used to expedite plans of Empire development. I shall try to do
this as soon as possible for I feel that during the next three
years we have the opportunity of doing real constructive work, and
I don't think that the part to be played by the Imperial Economic
Committee has yet been properly thought out.

As regards Australian representation on the Committee, I do not,
of course, know what may be in your mind. I should, however, think
that the best form is to have one man who is more or less a
permanent representative, thus securing continuity, and another
who would be appointed for the definite session of the Committee
and who would provide fresh contact with Australia. I do not quite
see the reason for appointing either representative as the Senior.

This practice is not followed by the other parts of the Empire.

Where a man of obviously senior stature is appointed, he would
naturally be treated both by the Committee and by his Colleagues
as the senior. For instance I should naturally have treated Sir
Mark Sheldon as my senior but I suggest that the definite
appointment of a senior and junior is unnecessary and might, under
certain circumstances, be rather awkward. Sir Mark was so charming

to me that no possibility of anything of the sort arose between
us.

I have just learnt confidentially that the First Report did not
come before the Cabinet yesterday. The Treasury insisted upon
referring the question of the 1,000,000 expenditure to the new
National Economy Committee. [10] I understand that it is
anticipated at the Board of Trade that the National Economy
Committee will report that the Government is pledged to the Empire
to expend this sum. It is perfectly clear that the Treasury is
doing its best to secure a reduction of the amount.

I think the Government needs shaking up and shall arrange for some
suitable Parliamentary questions to be asked.

SOUTH AFRICAN POLITICS

I have recently met several prominent South Africans who tell me
that a very interesting situation is developing in the Union. You
will doubtless be aware that references to a re-approachment
between the moderate Nationalists led by General Hertzog [11] and
the South African Party have appeared in the Press.

I am told that the extreme Transvaal Nationalists led by Mr.

Tielman Roos are creating an extremely awkward situation for
General Hertzog. The Prime Minister as a result of experience of
office has become convinced of the value of the Imperial
connection and is personally favourable to a closer understanding
with the South African Party. General Smuts' [12] personality is,
I am told, the greatest obstacle to a re-approachment, but it is
believed that General Smuts can be induced to take a prolonged
holiday from South African politics.

The recent appointment of an extreme Socialist as a Labour
Minister is expected to have some disintegrating effect upon the
Nationalist Labour Pact, as the average Boer farmer has an extreme
dislike for advanced Labour ideas.

I do not know how accurate any of the above is, but I gather that
well informed South Africans anticipate a change of parties before
very long.

EMPIRE FARMERS AND EMPIRE DEVELOPMENT

I have reported the foregoing about South Africa for two reasons.

Firstly, I felt it might be of some intrinsic interest and,
secondly, because I think the time is ripe for an intense effort
to place Empire Development upon a better basis. In this country
Empire sentiment is rapidly growing and only needs education to
make it the dominant economic policy of the country.

If Baldwin & Co. will only wake up and make it clear that the
British Government means business in helping Empire trade in
British markets, then what appears necessary is that the primary
producers of Australia, Canada, New Zealand and South Africa
should be made clearly to see that, as you said at the Empire
Press Conference 'it was vital to the Dominions that Britain
should be prosperous, that her industries should expand, and that
her commerce should retain its preeminent position'. The Election
results in Australia and New Zealand [13] should make an
educational campaign in this direction easily possible. In Canada,
the Farmer Progressives still hold the balance of power and
probably could be educated. In South Africa, perhaps more than
anywhere else, the idea that Great Britain is prepared to help
Empire produce needs to be rubbed home.

Suppose these two things could be done, namely
(1) Great Britain make it perfectly clear that Empire trade was to
receive maximum help.

(2) That the Farmers of the Empire could be made to realise that
No. 1 was a living reality.

I suggest that a most fruitful Imperial Economic Conference would
follow at which it might be possible to arrange for definite
action to do three things:

(a) To provide in Great Britain for markets for the produce of the
Empire.

(b) To expedite migration for land settlement.

(c) To arrive at some general understanding that the countries of
the Overseas Empire should assist the British export trade to the
greatest possible extent consistent with the wise development of
their own secondary industries.

The whole edifice that I have tried roughly to sketch is dependent
upon the British Government making absolutely clear their
determination to assist Empire trade to the greatest possible
extent. It appears to me that we ought to aim at an Imperial
Economic Conference in 1927 and to undertake to see that the
necessary educational propaganda for its success is carried on in
Great Britain, Australia, Canada, New Zealand and South Africa. I
should greatly appreciate an expression of your views on these
points.

Yours sincerely,
F. L. MCDOUGALL