193

15th November, 1928

PERSONAL AND CONFIDENTIAL

My dear Prime Minister,

The British press, having indulged in a veritable orgy of publicity over the United States Elections, is publishing no information about the electoral situation in Australia. [1] One is, therefore, able to form very few impressions as to how things are going. When one recollects that everyone is agreed that the American Election was fought purely on internal questions and that a change of Government would have resulted in no alteration in either American Tariff or fiscal policy and when one further considers how markedly a change in Australia would affect the Imperial policy, the silence of the British press about the Australian Election would be surprising if one were not so accustomed to this sort of thing.

I shall be watching the tape on Saturday evening and the papers on Sunday morning with the very greatest interest to discover just how the Commonwealth results are going but I do not anticipate any very startling changes.

BRITISH POLITICAL SITUATION

In my last letter I enclosed copy of an article by Garvin [2] and I gave an analysis of a statistical basis of the prospects of the Conservative Party. Since I wrote three developments have occurred which may be of importance.

First of all Baldwin [3] has very effectively dealt with the charges against the Government of unsatisfactory Foreign Policy and his reply to the indictment by Lloyd George [4] appears to be generally regarded as having been excellent. No doubt Casey [5] keeps you fully informed on all such matters and I am not forwarding any cuttings on that aspect.

The second development is apparently the sudden determination on the part of Lords Rothermere [6] and Beaverbrook [7] to attack the Government's De-Rating Proposals. [8] Rothermere, as is typical of the man, is appealing to the self-interest of the non-industrial parts of the country against proposals designed to assist British industry and agriculture. Beaverbrook's line is that the De-Rating Proposals are so unwieldy and complicated that they cannot become an effective platform for the coming General Election and should, therefore, be dropped.

How far these two attacks will embarrass the Government and affect the Constituencies is impossible to judge at the present time. One notices, however, an absurd confusion of thought among a good number of Members of Parliament, who insist on regarding the De- Rating Proposals as an alternative to safeguarding and praise or blame the De-Rating Proposals according to whether they believe that a more vigorous safeguarding policy will assist or embarrass the Party.

Among sober-minded people it is, I think, generally agreed that the Government's De-Rating Proposals, although involving very difficult and complicated adjustments with Local Authorities, are a quite useful step in the right direction and represent the first solid piece of work on behalf of producers that any Government has undertaken in this country for many years.

I do not myself believe that it will be possible to make this move really popular but at the same time I see no reason why the Government should not receive a certain amount of credit for what is proposed. Fortunately the proposals are in efficient hands, for Neville Chamberlain [9] has a reputation of being the most efficient member of the Cabinet and he, together with Winston Churchill [10], ought to be able to defend the measure effectively.

The third development is in regard to Safeguarding. A really important Debate occurred yesterday in the House of Commons and I am enclosing a marked copy of 'Hansard'. [11] The Debate, however, is so interesting that I would strongly recommend you to look through most of the speeches. Unfortunately the Labour Party did not really completely develop their idea of protecting industries through an International Convention for the boycott of goods produced under unsuitable conditions. Nevertheless this subject was ventilated to quite a considerable extent but what was perhaps more interesting was that the idea that Elliot [12] and I have been discussing of the possibility of attaching to the safeguarding of any industry which is a raw material of other industries a condition under which the duty would be removed in the event of prices rising above world parity became quite an important feature of the Debate.

I am enclosing two statements-one on each subject-which I prepared and gave to Elliot to use among some of his friends. It will be extremely interesting to watch and see whether this Debate has any effect on Government Safeguarding Policy.

ECONOMIC RESEARCH IN AUSTRALIA

Last night I devoted a couple of hours to the making of some notes on the economic research in Australia and I am enclosing a copy of my memorandum. I hope that some of the points on which I have touched may prove of some assistance to you and to those with whom you are discussing this question. I am sending a copy of these notes to Julius [13], Rivett [14], Gepp [15] and Wickens. [16] I have made no attempt to cover the immense field of economic research but have merely made certain suggestions on some definite points and have particularly drawn attention to the need that any Economic Research Organization would undoubtedly feel for investigations into the economic conditions of industries in countries other than Australia, in order to afford a real basis for comparison.

I have also drawn attention to the possibility of useful work being done should it be decided to attach to my office a couple of post-graduate economic students. [17] I do not know whether there is a serious dearth of intelligent young men trained in economics in Australia. Should that prove to be the case, it would not be very difficult to get hold of one or two suitable men on this side of the world-men who would probably like to settle in Australia later.

THE EMPIRE MARKETING BOARD

I had an opportunity the other day of studying the reception which the press of the whole Empire gave to the Second Report on the Work of the Empire Marketing Board [18] and I have prepared a brief note on this subject for you. It is particularly satisfactory to find that the press of Canada and South Africa were uniformly favorable. It is also a little disappointing to find that in Australia less attention was given to this report than in most of the other Dominions.

One of the reasons why the reception in the Canadian press was so satisfactory was because Ryan [19], the officer of the Board who looks after press matters, has recently been over to Canada and established personal contact with all the more important papers.

Ryan is a young Balliol man, of very good type and I am thinking of suggesting that he should visit Australia, New Zealand and India in the near future in order that he may make contacts with the press.

At each of the Empire Marketing Board meetings we have so long an agenda that no opportunity for a real discussion on policy presents itself I suggested sonic time ago that a special meeting of the Board to discuss policy should be held. Amery [20] agreed and we are having this special meeting on the 28th November and I shall try to let you have a complete precis of what takes place. I do not think that there is much doubt that the Board is doing good work but it needs to be even better.

Yours sincerely, F. L. MCDOUGALL

1 A General Election was to be held on 17 November.

2 J. L. Garvin, Editor of the Observer.

3 Stanley Baldwin, Prime Minister.

4 David Lloyd George, Prime Minister 1916-22. For his attack on the Anglo-French Compromise (see note 14 to Letter 186) and Britain's failure to pursue a disarmament policy, and Baldwin's reply, see House of Commons, Parliamentary Debates, fifth series, vol. 222, cols 721-755.

5 R. G. Casey, Commonwealth Government's Liaison Officer in London.

6 Chief Proprietor of the Daily Mail, Daily Mirror and London Evening News.

7 Chief Proprietor of the Daily Express, Sunday Express and Evening Standard.

8 See note 15 to Letter 173.

9 Minister of Health.

10 Chancellor of the Exchequer.

11 House of Commons, Parliamentary Debates, fifth series, vol.

222, cols 921-1038.

12 Walter Elliot, Parliamentary Under-Secretary for Scotland.

13 George Julius, Chairman of the Commonwealth Council for Scientific and Industrial Research.

14 David Rivett, Deputy Chairman and Chief Executive Officer of the Commonwealth Council for Scientific and Industrial Research.

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

16 C. H. Wickens, Commonwealth Statistician.

17 See a fuller account of this suggestion in Letter 168.

18 Empire Marketing Board, May 1927 to May 1928, E.M.B. 9, 1928.

19 A. Ryan.

20 Leopold Amery, Secretary for the Colonies and for Dominion Affairs; Chairman of the Empire Marketing Board.