Dear Mr. Bruce,

IMPERIAL CONFERENCE

After the long screed that I inflicted upon you last week on this
subject, I feel some diffidence in starting again, but my interest
in the subject must be my excuse. I am under the impression that,
although the regular discussion of political problems at Imperial
Conferences is necessary and important, there can be no rapid
progress towards closer Imperial union on political questions, and
that the best policy on the political side of Empire is 'festina
lente'. With Imperial Economic Development, on the other hand, I
feel that every year, nearly every month is of great importance
and that if we use the present years wisely, we shall be taking
the surest steps towards solving the political questions. Holding
these views as strongly as I do, I was particularly struck by
words used by Mr. Amery [1] last night at an Empire Press dinner.

He said: 'The main questions discussed at last year's Conference
were Empire trade and settlement. If these two questions were
rightly solved, they would have solved every social and political
problem with which the next generation had to cope. They would
have solved the problem of unemployment and the standard of living
in this country. If they solved rightly the problem of Empire co-
operation in development and trade they would solve automatically
the cognate problems of Empire security and Empire co-operation in
external policy'.

This is, from my view point, an entirely true and satisfactory
statement but when one realises that H.M. Government have done
practically nothing to further development and trade and do not
appear to be likely to do anything in the near future, one feels
rather inclined to despair. My purpose, however, in quoting Amery
is to reinforce the point that an Imperial Economic Conference
would serve the most useful purpose and be more fruitful, at any
rate in the long run, than the political conference.

I am hoping that, in the forthcoming Imperial Economic Committee
Report, it will be possible to establish a case for special
treatment of the products of close settlement. I have already
mentioned this hope to you several times but I have now worked out
some interesting data on the subject. If wheat and meat are placed
in one category as essential foodstuffs and the products of mixed
farming and fruit growing (Dairy products, pig products, fruit and
wine) in another, a number of interesting facts can be deduced.

It is probably roughly accurate to assume that wheat growing in
Australia gives permanent employment to from 2 to 4 men per square
mile. In Canada perhaps one or two more. The pastoral industry
employs far less per unit of area. On the other hand mixed farming
and fruit employ from 20 to 40 men per square mile in rainfall
districts and up to say 60 in irrigation districts. The density of
population in the best wheat districts of the Canadian prairie
provinces is from 5 to 15 per square mile, while in the fruit and
mixed farming areas of Ontario from 40 to 60. In Australia a
comparison could be made between say the Wimmera and Mildura. It
seems to follow that if Great Britain could guarantee markets for
the products of the orchard, vineyard and mixed farm, immediate
progress on a large scale could be made in land settlement, and at
the same time the decay of agriculture in Great Britain could be
arrested.

I wonder whether, if a Conference is to be held in October, it
would be possible for you to have any estimates prepared as to
what progress could be made with migration if Great Britain could
guarantee markets for these products? This would, I suppose,
involve consultation with the States and that might present some
difficulties. People here are very disturbed over the poor
progress of migration and I feel sure that if you could come over
here with propositions for a real, progressive migration policy
based upon secured markets, the effect would be great.

I am to see Mr. Amery on Monday and hope to be able to show him
how very unsatisfactory is the present state of affairs on Empire
economics. I feel that he has been so absorbed first with Ireland
[2], then Mosul [3], that he has not had the leisure to give
economic questions the attention which they urgently require.

I enclose an interesting leader from the 'Times Trade Supplement'
on the Imperial Conference. [4]

IMPERIAL ECONOMIC COMMITTEE

There is no further news to report. The Drafting Committee is
working hard, meeting three or four times a week and the whole of
Saturdays; the other Sub-Committees have nearly completed their
sectional reports.

STATE OF TRADE IN GREAT BRITAIN

Once again as the New Year comes in we are having the usual burst
of optimistic eloquence from the Chairmen of the Big Five Banks.

[5] The last three years have seen the same thing happen. About
November papers begin to talk optimistically and to decry the
pessimist; in January, the Bankers join the chorus. Politicians
and business men join in, and the year starts with high hopes. In
1924 this spirit lasted until May, in 1925 only till March. I hope
this year's events may justify a much more prolonged burst of
optimism but frankly I do not quite see the justification as yet.

The coal subsidy has stimulated the coal and iron and steel
trades, and perhaps the restraining influence of the return to the
gold standard is decreasing but the December export trade figures
were still profoundly depressing,
I have written an article about British trade and Empire markets,
a copy of which I will forward next mail, in case you find time to
read it. I do not know whether I shall make any use of it but
writing a thing down helps to clear one's own mind.

THE 'TIMES' AND EMPIRE TRADE

I had Brumwell [6] of the 'Times' to lunch today. He is, as I
believe I have mentioned, NO. 2 on the 'Times' and takes charge
when Dawson [7] is away. He is an extremely keen man on the
subject of Empire trade. He told me that the 'Times' is prepared
to undertake a really strong and sustained campaign to convince
the Government, Parliament and its readers, of the urgency of
strong action on Empire development. I had been urging this on the
'Times'. Brumwell, however, said that the question for the 'Times'
to decide was when to act. He felt that the Government and people
cannot think and act on two big things at one time. At present and
until the report of the Coal Commission [8] has been issued and
digested, he did not think the time ripe for a strong effort
towards action. I naturally told him that he was the best judge of
'when' but that so far as I could see, the matter was urgent
especially if an Imperial Conference was to be held in October. He
seemed to think that either April, before the Budget came up, or
else about a fortnight after the Budget, would be the time to act.

He urged me to do everything possible to engage the keen interest
of Members as soon as Parliament reassembled.

AUSTRALIAN WINE

You will be interested to hear that Australian Sweet Red Wine is
being freely retailed here at 2/6d. per bottle. Some of the stuff
is far from bad. I was at Travers (the biggest wholesale grocers)
last week and they showed me their brand Of 2/6d. Australian Sweet
Red. I suggested to them that they should send you two or three
bottles just to give you an idea of the type of wine that is being
now sold freely.

Travers are very much impressed by the growth of the demand. The
price is naturally dependent upon both the 4/- export bounty and
the 4/preference but if they can be maintained, I think a very
large trade can be established. The wine is both better in flavour
and much stronger in alcohol than Tarragona.

Yours sincerely,
F. L. MCDOUGALL