104

21st April, 1927

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

Since my last letter, the Easter Holidays have occupied almost the week.

BRITISH TRADE

The trade figures for the quarter ending 31st March have now been published. The publication was greeted by the less responsible sections of the press with paeans of joy over the improvement in British trade. The only basis for this demonstration was the fact that British exports in March amounted to 9 million more than in February, March having three more days than February.

The exports for the month of March 1927 showed a 10% reduction on exports in March 1926 and the export figures for the first quarter of the year for the last three years are as follows:-

3 months ended 31st March 1927 170 million 1926 189 "

1925 208 "

Imports for the quarter were practically the same as in 1926 but 30 millions lower than in 1925. It should be remembered that there has been about a 1.5% fall in general price levels as between March 1927 and March 1926.

There has been a fairly substantial improvement in the unemployment figures in the last fortnight which may indicate some revival in export trade but a disturbing feature is the fact that, although the coal industry has entirely recovered its pre-strike exports, the export trade in manufactured goods is very unsatisfactory. Cotton exports are down not only in value but also in quantity. The total of iron and steel shows for the quarter a reduction of 15% in quantity as compared with 1926.

It is very interesting to notice that Australia as a market for British goods seems likely to come out on the quarter's figures at even greater importance than heretofore.

The most startling item in the whole volume of exports is the export of motor chassis to Australia. I have made an extract showing the immense increase of these exports as compared with the general export progress made by the motor trade and am enclosing a copy of the table herewith.

THE ORIENT LINE OF TOURIST TRAFFIC TO AUSTRALIA

Last week I had lunch with Sir Alan Anderson [1] and Mr. T. F.

Tallents, the Secretary of the Orient Line, to discuss the possibility of an increased tourist traffic to Australia. The ideas they put forward are very well worth consideration and I am enclosing a note on the discussion, together with a brief memorandum by Mr. T. F. Tallents setting out the proposal of the Orient Company. I am sending copies of this discussion to Gepp. [2]

I should be very glad to have a few words from you on this subject as an indication as to whether you think the Orient people's idea is a practicable one.

EMPIRE MARKETING BOARD

I enclose a summary of the decisions taken in reference to research grants at the last meeting of the Empire Marketing Board.

This summary might perhaps be added to the file containing the previous decisions which have been forwarded to you during the last two months.

TROPICAL AGRICULTURAL STATION

I was very glad to receive yesterday a cable from Coresearch [3] informing me that the Council has approved the idea of the establishment of a Tropical Agricultural Research Station in conjunction with the Empire Marketing Board. Coresearch have asked me to obtain full particulars as regards Organisation, work and staff at Trinidad and Amani and I shall get busy with this at once. [4]

'LONDON WEEKLY'

I enclose a copy of the 'London Weekly' dated 16.4.27, which contains an article by Ramsay MacDonald [5] which is worth reading.

MR. A. F. BELL [6], C.M.G.

Mr. Bell arrives in London today and I have just received a wire from him. I also received a note from Marseilles informing me that he had been asked by you to be one of the Australian representatives at the International Economic Conference. The file of papers that have been issued by the League of Nations on this subject is simply overwhelming and the Australian delegates will have their work cut out to master the subjects that are coming up before the Conference actually takes place.

WINE DUTIES

I am enclosing a very interesting report from today's 'Times' of the Annual Meeting of Vine Products Ltd. These people are the makers of British wines and handle, as the report indicates, very large quantities of wine from South Africa and Australia. [7] I would recommend your looking through the report.

Yours sincerely F. L. MCDOUGALL

1 Of Anderson, Green & Co. Ltd, managers of the Orient Line.

2 H. W. Gepp, Chairman of the Commonwealth Development and Migration Commission.

3 Commonwealth Council for Scientific and Industrial Research.

4 The cable, dated 14 April, is on file AA:A461, E302/1/1. See note 10 to Letter 99.

5 Leader of the Labour Opposition.

6 Member of the Commonwealth Dried Fruits Control Board.

7 Times, 21 April. The report commended the increased preference for Dominion wines announced in the Budget.