165

21st May, 1928

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

I hope that by the mail following this one, Major Fuhrman [1] will be able to forward to you a Report, which itself is just about ready for my signature, but which cannot be completed until the authentic texts of the various resolutions passed by the Consultative Committee are available.

In this letter I should like very briefly to give you, for your personal information, a picture of the issues. Before doing so I will just comment on my more official report. I do not suppose that you will regard this report as being of sufficient importance to make it a parliamentary document, but it had occurred to me that you might feel that it was worth while to have it duplicated for the information of such members of the Cabinet as are interested in this subject, and also for the information of Gepp [2] and his Organisation, and of Wickens [3] and such other men as may be taking a particular interest in questions of economic research in Australia. [4]

With this idea in mind, I have at the conclusion of my report set out, I hope clearly, the reasons which lead me to believe that it is very desirable that Australia should be effectively represented on the Consultative Committee. I am myself convinced that we have a good deal directly to gain by my serving on this Committee, and also that it is safer for us to be present than absent. The Consultative Committee is not likely to meet more than once a year, and therefore it cannot be regarded as a very heavy tax on one's time.

The first three days of the conference were rather boring. It was probably necessary to have a prolonged plenary session, during which the members of the Committee could express their views and report as to how their own countries had reacted to the resolutions of the World Economic Conference [5], but this necessarily involved a tremendous amount of repetition and, although a certain number of very interesting Statements were made, on the whole things were not really interesting until we broke up into sub-committees to tackle in a practical way the problems before us.

The sub-committees were three in number, one large sub-committee for general subjects and two small ones, one for the problem presented by coal, and the other for sugar. Nothing of real importance occurred in either of these latter sub-committees, but on the general sub-committee a most interesting and important cleavage appeared on the question of the appropriate action for the League's Economic Organisation to take in order to further the movement towards the reduction of tariff barriers.

I have no doubt that you are fully aware that at the World Conference, W. T. Layton [6] was very much in the ascendant, and his views were received with the greatest deference by that Conference and have been embodied in many of its resolutions. As soon as the General Sub-Committee got to work, it became obvious that Layton was most anxious for a vigorous anti-tariff policy, but it was also clear that a number of the other members from a great variety of countries felt considerable doubts as to the wisdom of what he was urging, and that the Chairman of the Economic Committee of the League, M. Serruys [7], was opposed to recommending any action which was not highly probable to be brought to a successful and early issue.

I took the opportunity, in a very brief speech, of stressing the need for caution and success if the prestige of the League of Nations was not to be damaged by inopportune adventures in the economic sphere. Rather to my surprise, I found that what I had to say was very warmly welcomed and met with the approval of the Chairman, M. Theunis [8], of M. Serruys, Sir Sydney Chapman [9], Colonel Vernon Willey [10], and indeed of a considerable majority of the sub-committee.

After the conclusion of the first session of the general sub- committee, it became clear that Layton was not going to exert anything like the same influence on the Consultative Committee as he had done at the World Conference, and that the policy of moderation and caution would be successful. I could also see that the point that I had strongly urged on the British Delegation, and indeed on several foreign members of the Committee, namely that the basis of the League's activities should be the desirability of increasing international commerce rather than the negative one of lowering tariff barriers, would also be successful. If you have time to glance through the report of the Committee and mentally to compare it with the report of the World Conference of 1927 [11], I think you will realise how definitely the present document differs from the sweeping resolutions of 1927.

During the work of the general sub-committee it was found necessary to set up an ad hoc sub-committee on agriculture, upon which I served. On the latter sub-committee the important issue was the relationship between the Agricultural Institute at Rome and the League of Nations, about which I wrote to you in my last letter. The resolution that was finally approved was to the effect that note was taken of the demarche made by the Italian Government to the Governments which supported the Rome Institute on the subject of collaboration between Rome and Geneva, and the hope was expressed that the Consultative Committee, through its Chairman, M. Theunis, might be associated with the negotiations.

If the Commonwealth Government has not expressed any definite view on this subject before the arrival of this letter, I very much hope that you will be able to agree that there should be some definite link between Rome and Geneva. The work of the International Institute of Agriculture ought to be of great value to Australia, but at the present moment this is not the case, and it is necessary to secure more effective control and to get rid of the heavy Italian dominance. [12]

During the conference the League of Nations was carrying out some broadcasting tests to the Far East, and I was asked whether I would agree to give a 2 minute broadcast in the hope that this would reach Australia. [13] One of the Dutch Delegates broadcasted for Dutch East Indian consumption, and the Assistant Governor- General of the Philippines also took part. The messages were relayed from Holland by, I think, the beam system, and it was hoped that not only would Java be able to pick them up, but also Australia, the Philippines and Japan. I concluded my very brief and merely descriptive statement with a complimentary message from the Secretary-General of the League [14] to yourself. As there has been no reply I imagine that no message reached you. I am informed that Java picked up the messages quite clearly, but there has been no reaction from Australia, Japan or the Philippines. [15]

I shall be very glad to get back to inter-imperial rather than international considerations, but at the same time I feel that I must frankly state that I have learnt a great deal during my stay in Geneva, and that I am quite certain it is very well worth Australia's while to maintain close touch with the economic work here, both for the sake of the excellence of some of the work itself, and also because it is possible to safeguard our position.

Yours sincerely, F. L. MCDOUGALL

1 O. C. W. Fuhrman, secretary to many Australian delegations to the League of Nations.

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

3 C. H. Wickens, Commonwealth Statistician.

4 McDougall's report was published as Parliamentary Paper no. 268:

Commonwealth Parliamentary Papers 1926-27-28, vol V, pp. 1373-8.

5 The International Economic Conference, May 1927 6 Editor of the Economist.

7 Daniel Serruys, Director of Commercial Agreements in the French Ministry of Commerce.

8 Georges Theunis, Belgian Minister of State.

9 Economic Adviser to the British Government; member of the Economic Committee of the League of Nations.

10 Wool merchant and company director; a past president of the Federation of British Industries.

11 See 'Final Report of the World Economic Conference', printed as Appendix A to 'Report of the Australian Delegation', Commonwealth Parliamentary Papers 1926-27-28, vol. V, pp. 1217-57, and Report of the Economic Consultative Committee on its First Session, League of Nations Publication, 1928.II.18.

12 In a letter dated 27 August (file AA:M111, 1928), Bruce agreed that closer relations between the two were desirable.

13 Probably part of an investigation, then in progress, into the practicability of establishing a League radio-telegraphic station to ensure means of international communication in times of crisis.

14 Sir Eric Drummond.

15 Bruce mentioned, in the letter cited in note 12, that he was not aware of any report of the message being received in Australia.