Dear Mr. Bruce,

CABLES

In my last letter I described the visit of Mr. Amery [1] to the
Imperial Economic Committee and the preliminary discussion held by
the Committee on Mr. Amery's statement. On March 3rd I sent you
the following cable:

Amery yesterday gave Economic Committee detailed account British
Government's intention to implement First Report. His statement
followed lines of cable sent Empire Governments but he also stated
that he hoped Economic Committee would nominate members of
Committee to serve on Spending Body. This question discussed by
Committee today, Canadian delegates [2] difficult. Suggest that
you cable British Government stating that while preferring
original proposal of Executive Commission you accept their
proposal as temporary expedient until whole question can be
discussed in October at Imperial Conference. [3] I propose working
for Amery's plan in Committee as a purely temporary basis-Cook.

[4]

After a second discussion in the Committee held on Friday, March
5th, I sent you a further cable as follows:-

My cable March 3rd following further from McDougall-Amery
requested Imperial Economic Committee to express views on all
points raised in his communication. Two meetings held. Canadian
and South African [5] representatives fear unfavourable replies
from their Governments. Imperial Economic Committee advising Amery
that pending the replies of Oversea Governments Committee cannot
give detailed advice. Memorandum from Imperial Economic Committee
being sent to Amery on three points. Firstly that while welcoming
representation of British agriculture on Committee itself,
presence of British agricultural interests as such on Executive
Body is a departure from original scheme outlined in First Report.

Secondly that Committee hopes that the initiation of all general
schemes will remain in hands of Imperial Economic Committee.

Thirdly that in order to avoid misunderstanding, participation of
British agriculture in annual grant should be limited to schemes
benefiting Overseas Producers as well as home producers-Cook.

On Tuesday, March 9th, Mr. Shepherd [6] informed me of the receipt
of a cable from you asking the High Commissioner to secure copies
of your cables of February 20th and of March 6th [7] to the

British Government, so that I might be informed of your
Government's policy. I have now read both these cables and the
High Commissioner has arranged that I shall be given copies of all
cables from you or to you on subjects concerning the Imperial

Economic Committee. Normally several days elapse before copies of
cables sent by yourself to H. M. Government reach Australia House.

IMPERIAL ECONOMIC COMMITTEE

At a special meeting held on Friday, March 5th, a remodelled draft
of what Mackinder [8] thought we ought to say to Mr. Amery was
discussed. The Committee, however, came to the conclusion that at
the moment it was undesirable to submit a memorandum going into a
number of points in detail and better to send a more precise
statement of the attitude which the Imperial Economic Committee
felt that it could adopt prior to the representatives learning the
views of their respective Governments.

I enclose a copy of the memorandum which was finally decided upon
and of the covering letter which Mackinder appended in forwarding
the views of the Committee to the Secretary of State.

On Monday last there was a meeting of the Drafting Committee, at
which Mackinder stated that he proposed on Tuesday, March 9th, to
propose to the Committee that they should advise the Secretary of
State that the Committee felt that, during the coming year, not
more than half a million could usefully be expended and thus give
H. M. Government an opportunity of making the proposed reduction
for 1926-7 from one million to half a million rather more
acceptable in the overseas parts of the Empire.

On Tuesday morning, after I had had an opportunity of seeing your
cable of March 6th to the British Government, I informed Mackinder
that I should be unable to support his proposed move and he
therefore decided to withdraw it and not bring it before the
Committee.

On Tuesday, apart from further consideration of the Fruit Report,
the draft Merchandise Marks Bill was discussed by the Committee
and it was decided to submit a memorandum to the Secretary of
State for the Dominions on the subject of the Bill. I am enclosing
a copy of the memorandum decided upon.

So far as paragraphs 2, 3 and 4 of this draft are concerned, every
member of the Committee arrived at the meeting unanimous in their
view that there should be no option given to the retailer and that
the use of the words 'Empire' or 'Foreign' should be made
obligatory. Unfortunately, during the course of the discussion,
the South African representative received a copy of a cable from
his Government to the British Government expressing a preference
for marking with the name of the country of origin instead of the
words 'Empire' and 'Foreign'. However this view did not get
expressed in the memorandum.

So far as paragraphs 6, 7 and 8 are concerned, these were points
raised by me which met with the full approval of the Committee.

With regard to your request to me to keep you well posted, there
is not much news available. I am, however, sending you today the
following cable in reference to your proposal for an Executive
Commission consisting of representatives of the oversea parts of
the Empire. I presume your idea would include British agricultural
representatives. My cable reads as follows:

Following from McDougall-Imperial Economic Committee and British
Government proposals. Have now seen your cable to His Majesty's
Government of March 6th. Consider your proposal of Executive
Commission consisting of representatives of overseas Empire may be
misunderstood as you do not mention any British representative
thereon. Fear your proposal in present form may be thought
unreasonable. On constitutional grounds Chairman of Imperial
Economic Committee has always urged on Committee an impartial
Executive Commission appointed by H.M. Government and consists of
British members only. If your proposal considered practicable it
would be very effective especially if Executive Commission was in
effect a sub-committee of Imperial Economic Committee. I do not
consider that either Canada or South Africa would at present agree
with your proposal. Understand Indian Government has cabled that
it does not object to H.M. Government's scheme. Have not yet heard
of any further replies from Oversea Governments. Expect to see
Amery Monday. Will cable immediately I obtain further information.

I do not imagine that you meant to exclude all British
representation (apart from presumed agricultural representation)
from the Executive Commission but your cable as it reads looks
like this.

I think your proposal would be regarded here as involving
considerable departure from established financial practice as I
understand that Parliament cannot, on established financial
practice, pledge money in advance of the year's necessities but
the way out might be for the vote of a sum of say 5,000,000 with
perhaps a clause requiring the Treasury to pay 1,000,000 annually
out of the vote to the Executive Commission.

Mackinder has so perpetually drilled into the Imperial Economic
Committee the constitutional impossibility of overseas
representatives spending British Government money, that your
proposal would be regarded as somewhat revolutionary. There is no
doubt, however, that if anything like your proposal can be
accepted at the Imperial Conference, it would provide a most
effective method of getting on with the work of Empire
Development. I would, however, suggest for your consideration one
important point. Suppose there was an Executive Commission
consisting of different overseas representatives to those
representing the Governments of the Empire on the Imperial
Economic Committee, would there not be a probability of some
divergence, and possibly of rivalry between the two bodies? For
this reason I would prefer to see a Sub-Committee of the Imperial
Economic Committee acting as the Executive Commission, with power
to co-opt other persons on to special Sub-Committees to deal with
specific problems.

I do not see that there would be any serious objection to making
the Secretary of State for the Dominions the Minister generally
responsible to Parliament for the expenditure, and of including,
say, Ormsby-Gore [9] as Under-Secretary of State as a member of
your proposed Executive Commission.

FUTURE OF IMPERIAL ECONOMIC COMMITTEE

After reading your cables to H. M. Government of February 20th and
March 6th, I have obtained a clearer idea of your views as to the
future of the Imperial Economic Committee.

I am extremely glad that you are determined to see the idea of the
Committee become something of real importance in the Empire. I
propose to write to you several times during the next few months
on the subject of the Imperial Economic Committee. Today I can
only indicate, in the briefest outline, my ideas as to how the
Imperial Economic Committee can be made more effective.

Firstly I'm afraid it is essential that there should be a change
of Chairman. I have looked through my recent letters to you and
have been reminded of the old Roman who added to every one of his
speeches the words 'Delenda est Carthago'. My letters appear to
have expressed the idea of the necessity for an alteration in the
Chair with much the same persistence. I will write to you more
fully on this point, however.

Secondly I think we ought to make up our minds as to what we think
the Imperial Economic Committee ought to be and to do and then to
decide to go forward with the Imperial Economic Committee as a
Committee appointed from one Imperial Conference to the next. If
Canada or South Africa prove obdurate, then we should persuade the
other Governments to go ahead, on the basis that Canada can either
(a) fill her seats at any time (b) appoint representatives on any
ad hoc enquiry that interested her. I fancy that if this view were
adopted, Canada would protest and refuse to appoint
representatives to the Standing Committee but in fact would
probably always see that she had ad hoc representatives for all
enquiries.

Thirdly the British Government must be made to realise that they
must be adequately represented on the Committee.

Up to the present the British delegates have proved weaker than
those of any other part of the Empire except Newfoundland. The
Crown Colonies, India & New Zealand have all been well
represented; Canada well in parts, South Africa only fairly,
Ireland very well. As a whole, however, the crying need is for a
strong British delegation, including men with names that count.

These are just first preliminary ideas on the subject.

FRUIT REPORT

There has been a little more progress made and the Chairman hopes
to complete the report for signature next week. Printing will,
however, be a matter taking some time as there are several large
reports coming out in the immediate future and the Stationery
Office is congested with work. I fear publication cannot take
place before the very end of this month or else just after Easter.

CONSERVATIVE PARTY

Mr. Amery asked me to let him have a dozen copies of the summary
of my address to the Imperial Affairs Committee for circulation to
members of the Cabinet.

POLITICAL ECONOMY CLUB

You may remember that in my last letter I mentioned that Philip
Snowden [10] had stated that the share of British exports taken by
the Empire had not materially increased during the last forty or
fifty years. I gave you some preliminary figures and I now enclose
a schedule showing exactly what the position has been. I sent a
copy of this to Mr. Snowden and received rather an amusing reply
to the effect that he meant to have said that the Australian share
had not increased and not that the Empire share had not
increased!!

ADDRESS

Yesterday I addressed the Hants & Dorset Branch of the Royal
Colonial Institute at Bournemouth and I enclose a copy of the
summary of my address and a copy of the report in the 'Times' of
today.

PARLIAMENTARY QUESTIONS

I enclose copies of further Parliamentary Questions and also the
'Times' report of a motion by Lord Strachie in the House of Lords
on the position of British agriculture in respect to the Annual
Grant. [11]

ARTIFICIAL SILK

The 'Times' on March 9th published a most interesting supplement
on Artificial Silk but nowhere mentioned the importance of Empire
markets. I therefore wrote to the 'Times' about this point and I
enclose a copy of my letter. [12]

Yours sincerely,
F. L. MCDOUGALL