Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

Since the last mail, there have been two further meetings of the
Imperial Economic Committee. At both meetings, the Committee
continued in their attempt to obtain a general birds-eye view of
Empire trade. The method adopted by the Chairman [1] to attain
this end is by the consideration of specially prepared memoranda
which have been discussed with a Statistical Officer from the
Board of Trade and with an Officer from the Department of
Agriculture.

While there is little doubt that some such method was necessary to
enable the Committee to obtain collectively a view of the general
situation, the fact that three weeks have now passed and the
survey is not completed appears to Sir Mark Sheldon [2] and myself
to be rather serious.

At the last meeting it was arranged that the Committee should meet
regularly on Tuesday afternoons and when considered necessary
should continue its sitting on Wednesday morning. We may thus get
one day a week instead of half a day. The Chairman also proposed,
after Easter, to institute one or more Sub-Committees in order to
accelerate the work. Out of the 18 members of the Committee only
4, or at the most 5, are anxious for meeting two complete days a
week; the remainder quite naturally desire to fit the meetings of
the Committee with their other duties and raise definite
objections to more frequent meetings.

Sir Mark and I have discussed what we could possibly cable you in
the way of information but as the Committee have so far considered
no proposals, we have felt it impossible to send you any news.

At the last meeting there was one rather astounding proposal made
by one of the British Representatives, that an immediate decision
should be taken to expend a portion of the Million pounds for
advertising Empire produce at Wembley Exhibition. This proposal
was, however, immediately attacked by other British
Representatives and each of the Overseas Delegations expressed a
very definite view that it would be a quite unsuitable method to
adopt.

I received last week a cable from Ritchie [3], sent by wireless to
San Francisco from the 'Aorangi', asking me to advise him as to
the urgency of his arrival in London. This is the first that I
have definitely known of his coming over but I presume that he is
on his way to London to undertake certain duties in connection
with the Australian Delegation to the Imperial Economic Committee.

I replied that I thought he should reach London by the first week
in May and I have written fully to him c/-Dermot Casey [4] at New
York.

GREEK COMMERCIAL TREATY

I have seen a copy of your cable [5] to the Colonial Office on
this subject and I have discussed the matter again with Sir Sydney
Chapman, of the Board of Trade. He puts the matter in the
following way:

He says that British commercial interests have pressed for a
completion of a Commercial Treaty with Greece and that the
Government felt in a very awkward political position. They are
very loath to conclude a Treaty which will prevent any increase in
the duty on currants but they feel that if asked in the House for
their reason, [and] they stated that it might be desirable during
the life of this Parliament to increase the preference, they would
be regarded as being at least ready to contemplate playing fast
and loose with the Prime Minister's [6] Election pledges.

It is regrettable that Amery [7] is away at the present time,
because he, fortified by your cable, might have taken a rather
definite line. Whatever the British Government may finally decide,
there can be no doubt that your cable has done good as showing the
keen interest which the Commonwealth Government takes in the
matter.

In view of the information which I sent to you last mail as to the
extremely insanitary conditions under which Smyrna sultanas and
Greek currants are harvested and packed, I particularly impressed
Sir Sydney Chapman to see that there was no clause in the Treaty
which would hamper the British Government from imposing sanitary
regulations upon the import of these goods from Smyrna.

LABOUR PARTY DEVELOPMENTS

There is nothing of any particular interest to report, except that
a definite attempt will be made during the discussions on the
Budget by the Labour Commonwealth Group to disassociate the Labour
Party from Liberal free import ideas.

The group is being very active and I am keeping closely in touch
with them.

I believe that Dr. Haden Guest [8] intends, during the Easter
Vacation, to visit Smyrna and Greece, with a commission from one
or more newspapers to write up the labour and sanitary conditions
there.

EDUCATIONAL WORK IN PARLIAMENTARY CIRCLES

I was invited by the Trade Committee of the Empire Parliamentary
Association to address them on the value of the Australian and New
Zealand markets to Great Britain. There were about 30 members of
all parties present and Philip Snowden [9] was in the Chair. I
gave them a short address very carefully avoiding controversial
subjects and this was followed by about an hour and a half's
discussions which I think was of a decidedly useful nature. The
most difficult point raised in the discussion was the question of
what assurance Great Britain could obtain, in the event of her
adopting a really strong policy to assist the marketing of
Dominion produce in this country, that she would not find the
extension of industrial processes in Australia would deprive her
of a large proportion of the Australian market. I was happily able
to show how, up to the present time, the Protective Tariff had, on
the balance, largely assisted British trade.

CONSERVATIVE PARTY

Before Mr. Amery left England, he requested the Vice-Chairman and
Secretary of the Conservative Imperial Affairs Committee to
discuss with me the best method of educating members of the party
in the importance of Empire trade. As a result of this discussion,
they decided to set up a small working Sub-Committee to (1)
examine the facts; (2) to arrange for the facts to be communicated
in an effective form to the members of the Conservative Party; (3)
to formulate a real policy of Empire development.

The Sub-Committee invited me to attend their first two meetings
and useful discussions have taken place at two small dinners in
the House of Commons. The second occurred last night, at which a
very interesting suggestion was put forward by a member who is
largely interested in the British Iron and Steel Trade. His idea
was that, when the British public had been educated to realise the
value of the Empire and had in consequence become ready to adopt a
real Empire policy, that a Committee, such as the Imperial
Economic Committee, should consider the whole question of
manufacturing production throughout the Empire and that there
should be, if possible, some form of selection of industries
within the Empire, his idea being that while the Dominions would
desire to maintain and protect their important manufacturing
industries, it was not in their own interests nor in the interests
of the Empire as a whole that every form of manufacturing
production should be duplicated or triplicated within the Empire.

This suggestion was regarded by the other members of the Sub-
Committee as being of great interest but as being far too advanced
at the present stage of development.

MY BOOK

I have just heard from John Murray, who informed me that their
expert reader has formed a most favourable impression of my book
and that they desire to publish it. [10] They pointed out,
however, that sales of a book of this sort are necessarily
uncertain and that any definite orders for copies could greatly
assist the position.

In my letter of the 12th March [11], I told you the way in which
the book had been revised and I should be very glad if, on receipt
of this letter, you would consider whether the Commonwealth
Government would purchase a certain number of copies for
distribution in this country. The book will probably be published
price 5/-. I am forwarding by this mail, under separate cover, a
copy of the typed script of the revised book. As I have not got
any spare copies of the 4 graphs illustrating it, I cannot enclose
these. I think copies were sent to you with the memorandum that I
prepared on the value of Empire Markets.

MANUFACTURING PRODUCTION

I am enclosing some notes that I have very hurriedly thrown
together on the world tendency in manufacturing production. I
intend when I can find time to follow this matter up more fully
but I thought that it might be of considerable interest to you at
the present time to have these notes. The significance of them to
Australia seems to me to be this-that while Australia intends to
maintain the policy of protection and to shelter her manufacturing
industries from the competition of other lands, yet in face of the
facts set out in these notes, it is obviously far more to
Australia's advantage to concentrate and encourage primary
production than for her to attempt any rapid process of
industrialization.

I will write to you more fully on this subject when I have been
able to go more thoroughly into it.

Yours sincerely,
F. L. MCDOUGALL

[Handwritten postscript]

With the full concurrence of Sir Mark Sheldon I am seeing a good
deal of the Canadian representatives [12] on the Economic
Committee with the idea of clarifying ideas between us.