My dear Prime Minister,

THE RT. HON. J. H. THOMAS [1]

In my last letter I mentioned that Mr. J. H. Thomas had asked me
to see him about the marketing of Australian apples.

I called on Tuesday and he introduced me to two Australians in
whom he was interested. They are in the wholesale and retail fruit
trade in London and, so far as I could judge, Thomas has some
financial interest in their business. It so happened that one of
the two Australians had been the Orderly Room Sergeant for my
reinforcement at Mitcham, South Australia, in 1915, and sailed to
Egypt with me; the other had been a teller in the Renmark Bank in
1913.

We had a discussion which lasted an hour on the marketing of
Australian fruit and at the end of it Thomas stated that he
proposed to devote a good deal of attention to this particular
phase of Empire marketing on the Empire Marketing Board. He asked
me to meet him in the House of Commons just after the House met,
to go further into the subject.

If it should prove possible to get Thomas's interest really keenly
aroused on the subject of the marketing of Dominion produce, it
will be a matter of considerable importance.

LABOUR AND THE EMPIRE

I should like to draw your particular attention to an article by
Philip Snowden [2] that was printed in the second issue of Haden
Guest's [3] new paper 'The London Weekly', of which I forward a
copy. This article shows so great an advance in Snowden's public
attitude to Empire questions that it must be regarded as being
very significant. Personally I have always been of opinion that
Snowden has a very keen political nose and I think he must have
come to the conclusion that the movement within the Labour Party
in the direction of the Empire has become so strong that it is
necessary for him to associate himself quite definitely with the
movement.

Just a year ago, at a dinner of the Political Economy Club, I
heard Snowden say that free trade interests in this country ought
to organize to point out the ridiculousness of campaigns based on
the idea of buying British or Empire goods. Whether his internal
change is as great as appears on the surface I have not any idea.

As a further indication of the way in which labour is beginning to
take a stronger interest in questions of Empire trade, I enclose a
series of articles from the 'Railway Service journal' dealing with
Empire problems. This journal is the organ of the Railway Clerical
Workers Trade Union.

I am not quite sure whether, while you were over here, you noticed
the fact that Tom Johnston, the Clydeside M.P. who is now so keen
an imperialist, has become a member of the Labour Party's
Executive and, as such, has been promoted to the Front Bench in
the House of Commons. In the election for members of the
Executive, Johnston was fourth in the list and this, I think,
indicates pretty definitely that if, in a couple of years' time,
the Labour Party reaches office, Johnston will obtain at least a
junior ministerial post.

In the third issue of the 'London Weekly' there is an article by
Arthur Pugh, the General Secretary of the Iron & Steel Trades
Federation on 'Labour and Migration' which is also of decided
interest. I enclose a copy of this third issue.

AUSTRALIAN WINE

Sir Horace Hamilton, the Chairman of the Board of Customs and
Excise, asked me to lunch with him last Friday. He was anxious to
discuss the question of how the Australian wine industry would be
affected by changes in the demarcation at which light and heavy
wines are taxed. We had a very long talk and I finally promised to
write him a personal letter on the subject. Naturally Hamilton is
extremely anxious that the whole subject should remain strictly
confidential until the budget. I am forwarding copy of my letter
to Sir Horace Hamilton which makes the matter quite clear but it
will be necessary to regard this communication as being strictly
confidential to yourself.

In this connection I am under the impression that I gave you an
incorrect idea about the way in which the British Government has,
by resolution of Parliament, attempted to stabilise the
preferences. I believe I said that if the duties on wine were
increased it would automatically increase the amount of
preference. Of course if I said this to you, I was wrong. The
stabilising of preferences resolution was intended to stabilise
the money value and not the proportion of preference. This
explains the latter portion of my letter to Sir Horace Hamilton.

[4]

If, by the time this letter reaches you, you have not received any
cable from me, it might be desirable for you to discuss with some
really reliable person whether Australia has any marked preference
between 26 and 25 for the demarcation limit.

Hamilton was, of course, careful not to indicate at all definitely
what action the Chancellor [5] is likely to take.

I am troubling you personally with this matter because it is a
very delicate subject and if any leakage of information occurred,
individuals who rightly forecasted the Chancellor's intentions
would be able to make quite a considerable amount of money by
speculating in the cheap Spanish and Portuguese wines. Perhaps you
would be good enough to indicate to me whether, in forwarding this
personal letter to Sir Horace Hamilton for your consideration, I
am taking the right course of action or whether you would have
preferred me to have sent a letter of this character to Mr.

Paterson [6] direct.

EMPIRE MARKETING BOARD

At the meeting of the Research Committee of the Empire Marketing
Board, held on Tuesday, Walter Elliot [7] explained what had
passed between you and himself on the subject of a Tropical
Agricultural Research Station in Queensland and the Committee
unanimously supported what had been done and decided to bring the
matter before the Board at its next meeting on the 2nd February.

IMPERIAL ECONOMIC COMMITTEE

There is still no definite news as to whether Chadwick [8] is
going to accept the Secretaryship. In the meantime the absence of
Mackinder [9] and the fact that there is no Secretary is holding
up any development. A report on Eggs and Honey is on the stocks in
the charge of a Sub-Committee with a very junior person acting as
Assistant Secretary. I decidedly resent the long delay in
beginning to approach our problems and I feel that it will be
necessary to throw a good deal of driving power into the work of
the Committee as soon as it is properly restarted.

Yours sincerely,
F. L. MCDOUGALL