14

19th March, 1925

PRIVATE & CONFIDENTIAL

Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

The first meeting of the Imperial Economic Committee was held on Tuesday afternoon at the Board of Trade. Sir Philip Cunliffe- Lister [1] welcomed the Committee in a short speech in which he drew attention to the value of Empire Development to Great Britain. Sir Halford Mackinder [2] replied stressing three points:

1. Men, Money and Markets.

2. The necessity for keeping British Agricultural interests in view.

3. The main objective to be to find methods whereby Empire supplies could be given some definite advantage over foreign supplies.

The Chairman also emphasised the great value of unanimous decisions.

The sitting was then taken up with questions of procedure.

It was decided (a) To sit in private and for the Chairman to be responsible for Press communiques.

(b) To examine witnesses as considered necessary.

(c) To first attempt to visualise the whole problem, then to study Meat and Fruit and to reserve consideration of the 1,000,000 proposal until the Committee had formed some collective idea of the problems which it had to face.

Discussions occurred on a suggestion by the Chairman that, for the purposes of the Committee, Canned Fish should be regarded as 'Meat' and Fruit Juices and Honey as 'Fruit'. No decision was arrived at.

On the question of the frequency of sittings, a rather difficult position was disclosed so far as the immediate future is concerned. Sir Halford Mackinder is on the Royal Commission on Food and, owing to the illness of Sir Auckland Geddes [3], is acting Chairman. He is also tied to the Imperial Shipping Committee one day a week. He was, therefore, only able to arrange for meetings of one day a week. Sir Mark Sheldon [4] protested that, with the enormous volume of work ahead of the Committee, this would protract discussion in a most serious way.

Sir Mark handed me a copy of your cable in reply to his of the 11th March referring to the work of the Committee. I think that it is essential to cultivate the personal acquaintance of the members of the Committee so that we may be able to get them privately to see the full importance of this committee and thus, at a later stage, obtain general support for comprehensive proposals for assisting Empire trade.

Sir Halford Mackinder is lunching with me to-day.

THE GREEK COMMERCIAL TREATY

I enclose copy of letter received from Mr. Amery [5] on this subject.

PROPOSAL FOR INCREASED REDUCTION OF DUTIES ON WINE AND CANNED FRUIT

With my letter of February 5th [6] I forwarded to you copy of a memorandum upon this subject. Although I have no definite information as to what attitude the Chancellor [7] is taking on the matter, I know that he is being advised by Sir Horace Hamilton, the Head of the Customs Department, that grave political complications might follow reductions in duty that might even be imagined to place the British producer of Beer or of Bottled Fruits at a disadvantage.

I met Sir Horace recently at lunch and he made his own opinion abundantly clear.

DRIED FRUITS

Conditions in Smyrna and Greece

We are all aware that the general hygienic conditions in Smyrna and Greece are deplorable and I have recently collected information as to the way in which currants and sultanas are harvested and marketed in these countries.

I have obtained from the Department of Overseas Trade reports on this subject, copies of which I am enclosing. These reports confirm, in the most definite way, one's worst suspicions. I have marked the portions which, I think, you would be interested to read.

The Department has asked me to regard the report of the Consul- General in Smyrna as confidential. They do not wish to have the report of the extremely insanitary conditions attributed to the Consul-General.

I enclose copy of a letter which I sent to the proper official at the Ministry of Health on this subject and as my letter covers the ground fairly fully, I would suggest that you should read it.

The information contained in the Smyrna report would be most valuable to Australia if used in small doses for publicity purposes. As I cannot directly use this report, I have asked the High Commissioner [8] to cable to the Australian Commissioner in New York [9] for American Consular reports on this subject.

LABOUR AND FISCAL POLICY

I enclose an extract from a speech of Mr. Tom Johnston, M.P., made at Tuesday's Debate on the importation of Sweated Goods. [10]

The Labour Committee on the subject is to apply to the League of Nations Union for information as to sweated goods competitive with Australian and the Union is asking us for information. I am suggesting Currants, Sultanas and Raisins; Wine from Spain and Portugal; Butter from Russia;. Eggs from China, Egypt and Poland.

I am also suggesting that the extremely low wages paid in certain producing countries have prohibited the development in Australia of certain primary industries which would, if established, largely increase her capacity to absorb migrants. An example is flax.

EDUCATIONAL WORK

I have not been reporting my activities in this direction but I should like to assure you that I am exercising, if anything, greater discretion than formerly, especially in view of complications through the Imperial Economic Committee. I see d'Egville [11] pretty frequently and am in constant touch with the Conservative and Labour Parliamentary Empire Groups. D'Egville has arranged for me to address the Empire Parliamentary Association Trade Committee next Monday on the value of the Australian market and I am to have Philip Snowden [12] as Chairman!!

Yours sincerely, F. L. MCDOUGALL

1 President of the Board of Trade.

2 Chairman of the Imperial Economic Committee.

3 Chairman of Rio Tinto Co.; Ambassador to the United States 1920- 24.

4 Prominent Sydney businessman; senior Australian representative on the Imperial Economic Committee.

5 Leopold Amery, Colonial Secretary.

6 Not found.

7 Chancellor of the Exchequer, Winston Churchill.

8 Sir Joseph Cook.

9 Sir James Elder.

10 A Labour M.P. and writer, Johnston cited competition for Australia from Smyrna's dried fruits and China's liquid eggs. See House of Commons, Parliamentary Debates, fifth series, vol. 181, cols 2109-215.

11 Sir Howard d'Egville, Secretary of the United Kingdom branch of the Empire Parliamentary Association.

12 Labour M.P.; free trader; Chancellor of the Exchequer 1924.