17

30th April, 1925

PERSONAL & CONFIDENTIAL

Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

Since my letter of April 23rd, the formation of the Sub-Committees or Panels has been fixed. There are 3 Panels:

Panel A General Purposes.

Panel B Meat.

Panel C Fruit.

Sir Mark Sheldon [1] and myself are members of Panel A; Sir Mark Sheldon takes Panel B, and I take Panel C. It is only in the case of Australian Representatives that both delegates are members of Panel A. This is due to the fact that the Chairman, Sir Halford Mackinder, expressed a desire to the imperial Economic Committee to have my services available on Panel A, in view of the general nature of its reference and of my special economic knowledge.

The first meetings of the 3 Panels were held on Tuesday and Wednesday of this week. The terms of reference were explored, immediate witnesses decided upon and a certain amount of progress made.

EDUCATIONAL WORK

I enclose a copy of an article which I wrote for the Times, and which they published in the form of a letter, on the value of the Empire to the British Cotton Industry. [2]

I am also enclosing the details of a suggestion which occurred to me in which the educational value of Wembley [3] as to the importance of the Empire to the people of Great Britain can be improved. I have discussed this suggestion with the High Commissioner [4] and agree with his view that it will be most effective if it is put up from a British source. I have therefore approached the Federation of British Industries and the Exhibition Authorities, the latter through Sir James Cooper [5], and am urging that the idea should be adopted. I think that you will agree that the cumulative effect of all British exhibitors shewing an effective form of the sample diagram, which I enclose, would be very considerable.

PREFERENCE

The preference proposals in the Budget which was introduced on Tuesday are only in one respect better than we had every reason to anticipate from Mr. Baldwin's speech of December 17th. [6] The 4 reasons which I informed you of in my letter of 19th March [7] and the proposals which I put forward to the British Government in regard to increased preference on Canned fruits and dry wine have not been adopted. The proposed duty on Hops with a third preferential rate is the only novel point. [8]

I have discussed this on a number of cases with the National Farmers Union, the Ministry of Agriculture, Mr. Amery [9] and with Sir Sydney Chapman of the Board of Trade, and had urged at least a 50% preference. However, the proposed preference will amount to about 2 7/8d per 1b. on Empire Hops and will be of very much greater assistance to the Tasmanian growers than the preferential clause under which the Hop Control operated. In actual practice the preference under the Control system was almost entirely illusory.

I have been much concerned owing to the date on which it is proposed that the new preferences should come into operation, namely July 1st. The new Australian and South African dried fruit crops are now arriving in this country. I enclose a brief memorandum on this subject which I prepared and submitted to the High Commissioner, the Colonial Office, Board of Trade and which Sir James Cooper has submitted to the Treasury. The difficulty in the way is that the old established Treasury procedure is to incorporate all deductions of Customs Duties in the Finance Bill and not in the Budget resolutions. The date July 1st has been fixed because it is anticipated that just prior to that date the Finance Bill will have received the royal assent.

I have pointed out to Mr. Ormsby-Gore [10] (Mr. Amery is away), to the Board of Trade and to Mr. Wardlaw-Milne [11], M.P., Vice- Chairman of the Unionist Imperial Affairs Committee of the House of Commons, that if they can find a method whereby the preferences can be brought into immediate operation, it will have a very good effect upon the Australian and South African dried fruit industry and will afford them an opportunity of making a small but exceedingly welcome gesture to Australia and South Africa which may be of incalculable importance at the present juncture.

MY POSITION

I am still not in receipt of any reply from you to my cable of April 16th. [12] Sir Mark Sheldon, however, has informed me that he received from you a cable in reference to this subject. Sir Mark asked me to show him the various cables that had passed from you and from myself on this subject. Under these circumstances I propose to postpone any further discussion on this matter until next mail.

Yours sincerely, F. L. MCDOUGALL

1 Senior Australian representative on the Imperial Economic Committee.

2 See note 8 to Letter 16.

3 The British Empire Exhibition at Wembley.

4 Sir Joseph Cook.

5 Company director; Financial Controller of the British Empire Exhibition; Chairman of the London Agencies of the Commonwealth Dried Fruits and Dairy Produce Control Boards.

6 Stanley Baldwin, Prime Minister, had stated in the House of Commons that his government would reintroduce the Resolutions, involving reductions of duty, promised at the 1923 Economic Conference but defeated in the House of Commons in June 1924.

7 Letter 14 does not mention the four reasons. No other letter of this date has been found.

8 Duties on Empire dried fruits were removed. The preference on tobacco was increased from one-sixth to one-quarter of the duty, on heavy wines from one-third to two-thirds, on sparkling wines from three-tenths to one-half The preference on sugar was restored to its pre-1924 level and was stabilised for ten years. See House of Commons, Parliamentary Debates, fifth series, Vol. 183, Cols 49-89.

9 Leopold Amery, Colonial Secretary.

10 William Ormsby-Gore, Parliamentary Under-Secretary for the Colonies.

11 J. S. Wardlaw-Milne.

12 See Letter 16.