106

4th May, 1927

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

EMPIRE PRODUCTS NUMBER OF TIMES TRADE SUPPLEMENT

I have received your cable of May 3rd amending the draft article for the Empire Products Number, and I have made the necessary alterations together with a few essential adjustments of English.

BRITISH TRADE

In my last letter I commented upon an increase in unemployment, this week's figures, however, show a substantial improvement and this indicates how mistaken it is for me to send you such ephemeral information.

While on the general subject of British trade, I should like to draw your attention to a speech by Mond [1] made on Empire Trade Unity together with the comments of the Manchester Guardian.

Mond is becoming increasingly keen on the idea of a gradual movement towards Empire Free trade. While this idea itself is impossible, there seems everything to be said for the examination of the extent to which Inter-Imperial tariffs can be adjusted to give a maximum impetus to Empire development and there is nothing I would like to see more than an attempt to define what are the reasonable limits of Australian, South African and New Zealand industrial development for say a five or ten year period, and then a decision to leave tariff mongering alone so far as additional industrial protection is concerned.

Along these lines I think one could get a majority of the British people behind preference to the Empire.

AUSTRALIAN TARIFF AND BRITISH TRADE

I was pleased to see a report in the press that Mr. Pratten [2] will be in London before long. I very much hope that he will not over emphasise the extreme protection policy.

In connection with this general subject, I am enclosing an interesting cutting on the American success in South America, which you may find distinctly useful. I am also enclosing an interesting Parliamentary question and answer on the subject of Australian duties on cotton and wool fabrics. Amery's [3] answer to Pethick-Lawrence [4] was quite satisfactory and, as I know Pethick-Lawrence, I am going to take up the matter with him personally.

There can, however, be no doubt that instances of extreme protection tend to make the publicity work of the Empire Marketing Board very much more difficult. The rumour of the intention of Australia substantially to increase the duty on woollen socks and stockings is also having an awkward effect.

On the 16th March, and again on the 28th March [5], I wrote to you on this subject and I sincerely hope that before the Tariff Board makes definite recommendations to Parliament for an increase in the duty of 45% ad valorem against British woollen socks and stockings, they will have satisfied themselves that the really efficient Australian Knitting Mills do require additional protection and will not make the recommendation merely on the basis of the efficiency of the average Knitting Mill, which is at least conceivably not as high as it should be.

TRADE UNION BILL

In my letter of 7th April [6] I sent you some preliminary comments on the Trade Union Bill. You will be receiving by this mail the Hansard giving the full debate but it may interest you to know that at the moment the impression is that the Government is gaining ground not only in the House but in the country on the Trade Union Bill discussions.

The Attorney-General, Sir Douglas Hogg, in spite of fierce Labour interruptions, made an effective statement in introducing the second reading and summarised the Bill in this way. He said that the Bill was intended to support four major propositions:

1. that a General Strike i.e. a strike designed to coerce the Government or the community, was illegal.

2. that intimidation was illegal.

3. that it was desirable that individuals should be free to choose whether they desired to contribute to the funds of a political party or not.

4. that Civil Servants held an undivided allegiance to the State.

Sir John Simon [7] speaking yesterday said that provided the Government was prepared to accept amendments so as to rigidly confine the Bill to those four points, he thought that the Labour Party would have an unenviable time in the Constituencies in saying that these four propositions were unjust or matters that should be resisted.

Some of my Labour friends tell me that the Constituencies are fiercely indignant at the Bill; on the other hand my Tory friends tell me that there is a strong indication that the country is not particularly interested in the Bill but on the whole sympathetic to its objects. On the whole I am inclined to the opinion that if the Government maintains a firm and yet reasonable attitude, it will do itself considerable good in the country.

STATEMENT ON THE VALUE OF EMPIRE TRADE TO GREAT BRITAIN

In previous letters I have told you that I was working on a general statement for the Empire Marketing Board on 'What the Empire means to British Trade'. This preliminary survey is now almost completed. It has involved a very great deal of additional work which has mostly been done at night but will I hope prove a really effective statement. On Monday next it is to be 'vetted' by a small Sub-Committee of the Publicity Committee of the Empire Marketing Board, of which Ormsby-Gore [8] is going to act as Chairman. The document when it leaves my hands will consist of about 30 foolscap pages of statement and about an equal number of pages on statistical appendices. The idea is that the Empire Marketing Board should, after the fullest consideration and after all the statistics have been officially checked, print and issue the statement.

'LONDON WEEKLY'

I enclose the 'London Weekly' dated 30.4.27.

SINGAPORE NAVAL BASE

I enclose a Parliamentary question and answer which may be of interest. [9]

'A WHITE AUSTRALIA'

I am enclosing copy of a letter by the Bishop of London. [10] I have no doubt this will reach you from other sources but it is of sufficient importance for me to draw your special attention to.

Yours sincerely, F. L. MCDOUGALL

1 Sir Alfred Mond, Conservative M.P.; Chairman of Imperial Chemical Industries Ltd. Speaking to a meeting of Conservative Members of Parliament, organised by the Empire Industries Association, Mond had advocated an Empire Economic Union, with inter-Imperial free trade and protective tariff barriers and the establishment of an advisory Imperial Trade Commission. An editorial comment in the Manchester Guardian, 4 May, doubted that the Dominions would accept the idea.

2 H. E. Pratten, Minister for Trade and Customs in the Bruce-Page Government.

3 Leopold Amery, Secretary for the Colonies and for Dominion Affairs.

4 F. W. Pethick-Lawrence, Labour M.P., had asked whether posters advertising reciprocal Empire free trade were justified in the light of Australian tariff increases on some goods. Amery replied that they were 'amply justified' since Australia gave generous preference over the whole range of trade. See House of Commons, Parliamentary Debates, fifth series, vol. 205, col. 1258.

5 Letters 98 and 99.

6 Letter 102.

7 Liberal M.P.; Attorney-General 1913-15; Home Secretary 1915-16.

8 William Ormsby-Gore, Parliamentary Under-Secretary for the Colonies; Chairman of the Publicity Committee of the Empire Marketing Board.

9 J. M. M. Erskine, Conservative M.P., asked whether Australia and New Zealand had offered to contribute towards the cost of the base. See House of Commons, Parliamentary Debates, fifth series, vol. 205, cols 1171-2.

10 Times, 5 May. The letter supported Australia's need for British immigrants and for markets to absorb the products of closer settlement.