My dear Prime Minister,

Very many thanks for your long letter of the 12th December [1], in
which you comment on many points raised in my letters from the
15th September to the 26th October.

There is one subject which you have not mentioned and that is the
Agricultural Economics Report of the Empire Marketing Board. I
rather hope that you will find it possible to stimulate interest
in Australia in this most important matter. Perhaps I shall hear
from you later on in regard to it. [2]

I am very sorry to read your account of how strenuous a time you
have been having recently. [3] Casey [4] was able to tell me
something about your work and how difficult it is for you to get
anything like the competent assistance which can alone make the
duties of the Prime Minister of the Commonwealth tolerable. I do
hope that better assistance may be evolved, because frankly I feel
a little unhappy when I read your remarks about it being an
unpleasant job. Given really competent assistance and sufficient
of it, the unpleasant aspects of the job would quickly become
less. [5]

I have written you a terrifically long letter by this mail on the
subject of the distribution of secondary industries of the Empire.

[6] I hope that it will prove of considerable interest to you and
that you may come to regard the time as being appropriate for the
initiation of action along some such lines.

EMPLOYERS AND EMPLOYEES CONFERENCE

To synchronise with the commencement of the series of
conversations that are now taking place between the Employers
(headed by Sir Alfred Mond [7]) and the Trade Union Conference, I
wrote an article which was published in the 'Times Trade
Supplement' but to which the Editor gave a rather misleading
title. [8] I am enclosing a copy which I think may be of interest
to you. There may be some occasion on which you might find it
worth while to express the idea which I have tried to make in this
article that Empire development really means the standard of
living of Empire peoples. Put in this way the idea of Empire
development ought to appeal very forcibly to those who have been
educated in the Trade Union Movement.

IMPERIAL ECONOMIC COMMITTEE

You will be sorry to hear that Lady Chadwick has been very
seriously ill for the last six months. Unfortunately for Chadwick
[9], she is in Switzerland and he has been running to and fro
between London and Switzerland. He returned last week after the
Christmas holidays and told me that Lady Chadwick was on the verge
of losing her nervous ability to maintain a brave attitude and
that he regarded the next three or four weeks as vital. He felt
that he would have to return to Vevey but that this would involve
so serious a curtailment of his usefulness with the Committee that
he had the possibility of resignation in mind.

I find that Chadwick will be able to move Lady Chadwick to England
within a couple of months and I, therefore, offered to spend a
couple of hours on two evenings in the week (if necessary) with
his staff just to keep them on right lines during his absence from
England.

Chadwick was very grateful for this suggestion, which he is going
to discuss with Mackinder. [10] I stipulated that under no
circumstances should the members of the Committee be informed of
any action of this sort, my main reason being that the Canadian
representative [11] on the Committee has developed a rather
definite jealousy which is unfortunate and must be guarded
against. [12]

I very much hope that Lady Chadwick will soon get better, because
I think that the work of Chadwick as Secretary to the Imperial
Economic Committee is quite essential.

POLITICAL

The newspapers are beginning to discuss the possibility of a
General Election during 1928. It seems to be felt that the result
of the Northampton By-election may be to encourage the Government
not to defer their appeal to the country until 1929 but to make
the plunge this year.

In this connection there may be some partly political significance
in the decision to cut the cruiser building programme for the
financial year 1928/29 by 50%. I imagine that this decision is a
very adroit move so far as relationship with America is concerned.

The Americans cannot be expected to like it but as far as I can
see they will find it extremely difficult to answer. As this
country is supposed to be able to build at about twice the pace
that America can achieve, I imagine it is a decision not fraught
with any real danger.

There are three By-elections pending at the present moment. One at
Faversham in Kent with a mixed agricultural and industrial
electorate; one at Lancaster and one at Bristol. Should the
results of these three By-elections not be unduly unfavourable to
the Government, I should not be surprised if a tentative decision
were taken seriously to consider a General Election in the Autumn.

Yours sincerely,
F. L. MCDOUGALL