My dear Prime Minister,

The British press, having indulged in a veritable orgy of
publicity over the United States Elections, is publishing no
information about the electoral situation in Australia. [1] One
is, therefore, able to form very few impressions as to how things
are going. When one recollects that everyone is agreed that the
American Election was fought purely on internal questions and that
a change of Government would have resulted in no alteration in
either American Tariff or fiscal policy and when one further
considers how markedly a change in Australia would affect the
Imperial policy, the silence of the British press about the
Australian Election would be surprising if one were not so
accustomed to this sort of thing.

I shall be watching the tape on Saturday evening and the papers on
Sunday morning with the very greatest interest to discover just
how the Commonwealth results are going but I do not anticipate any
very startling changes.

BRITISH POLITICAL SITUATION

In my last letter I enclosed copy of an article by Garvin [2] and
I gave an analysis of a statistical basis of the prospects of the
Conservative Party. Since I wrote three developments have occurred
which may be of importance.

First of all Baldwin [3] has very effectively dealt with the
charges against the Government of unsatisfactory Foreign Policy
and his reply to the indictment by Lloyd George [4] appears to be
generally regarded as having been excellent. No doubt Casey [5]
keeps you fully informed on all such matters and I am not
forwarding any cuttings on that aspect.

The second development is apparently the sudden determination on
the part of Lords Rothermere [6] and Beaverbrook [7] to attack the
Government's De-Rating Proposals. [8] Rothermere, as is typical of
the man, is appealing to the self-interest of the non-industrial
parts of the country against proposals designed to assist British
industry and agriculture. Beaverbrook's line is that the De-Rating
Proposals are so unwieldy and complicated that they cannot become
an effective platform for the coming General Election and should,
therefore, be dropped.

How far these two attacks will embarrass the Government and affect
the Constituencies is impossible to judge at the present time. One
notices, however, an absurd confusion of thought among a good
number of Members of Parliament, who insist on regarding the De-
Rating Proposals as an alternative to safeguarding and praise or
blame the De-Rating Proposals according to whether they believe
that a more vigorous safeguarding policy will assist or embarrass
the Party.

Among sober-minded people it is, I think, generally agreed that
the Government's De-Rating Proposals, although involving very
difficult and complicated adjustments with Local Authorities, are
a quite useful step in the right direction and represent the first
solid piece of work on behalf of producers that any Government has
undertaken in this country for many years.

I do not myself believe that it will be possible to make this move
really popular but at the same time I see no reason why the
Government should not receive a certain amount of credit for what
is proposed. Fortunately the proposals are in efficient hands, for
Neville Chamberlain [9] has a reputation of being the most
efficient member of the Cabinet and he, together with Winston
Churchill [10], ought to be able to defend the measure
effectively.

The third development is in regard to Safeguarding. A really
important Debate occurred yesterday in the House of Commons and I
am enclosing a marked copy of 'Hansard'. [11] The Debate, however,
is so interesting that I would strongly recommend you to look
through most of the speeches. Unfortunately the Labour Party did
not really completely develop their idea of protecting industries
through an International Convention for the boycott of goods
produced under unsuitable conditions. Nevertheless this subject
was ventilated to quite a considerable extent but what was perhaps
more interesting was that the idea that Elliot [12] and I have
been discussing of the possibility of attaching to the
safeguarding of any industry which is a raw material of other
industries a condition under which the duty would be removed in
the event of prices rising above world parity became quite an
important feature of the Debate.

I am enclosing two statements-one on each subject-which I prepared
and gave to Elliot to use among some of his friends. It will be
extremely interesting to watch and see whether this Debate has any
effect on Government Safeguarding Policy.

ECONOMIC RESEARCH IN AUSTRALIA

Last night I devoted a couple of hours to the making of some notes
on the economic research in Australia and I am enclosing a copy of
my memorandum. I hope that some of the points on which I have
touched may prove of some assistance to you and to those with whom
you are discussing this question. I am sending a copy of these
notes to Julius [13], Rivett [14], Gepp [15] and Wickens. [16] I
have made no attempt to cover the immense field of economic
research but have merely made certain suggestions on some definite
points and have particularly drawn attention to the need that any
Economic Research Organization would undoubtedly feel for
investigations into the economic conditions of industries in
countries other than Australia, in order to afford a real basis
for comparison.

I have also drawn attention to the possibility of useful work
being done should it be decided to attach to my office a couple of
post-graduate economic students. [17] I do not know whether there
is a serious dearth of intelligent young men trained in economics
in Australia. Should that prove to be the case, it would not be
very difficult to get hold of one or two suitable men on this side
of the world-men who would probably like to settle in Australia
later.

THE EMPIRE MARKETING BOARD

I had an opportunity the other day of studying the reception which
the press of the whole Empire gave to the Second Report on the
Work of the Empire Marketing Board [18] and I have prepared a
brief note on this subject for you. It is particularly
satisfactory to find that the press of Canada and South Africa
were uniformly favorable. It is also a little disappointing to
find that in Australia less attention was given to this report
than in most of the other Dominions.

One of the reasons why the reception in the Canadian press was so
satisfactory was because Ryan [19], the officer of the Board who
looks after press matters, has recently been over to Canada and
established personal contact with all the more important papers.

Ryan is a young Balliol man, of very good type and I am thinking
of suggesting that he should visit Australia, New Zealand and
India in the near future in order that he may make contacts with
the press.

At each of the Empire Marketing Board meetings we have so long an
agenda that no opportunity for a real discussion on policy
presents itself I suggested sonic time ago that a special meeting
of the Board to discuss policy should be held. Amery [20] agreed
and we are having this special meeting on the 28th November and I
shall try to let you have a complete precis of what takes place. I
do not think that there is much doubt that the Board is doing good
work but it needs to be even better.

Yours sincerely,
F. L. MCDOUGALL