241

26th June, 1929

PERSONAL AND CONFIDENTIAL

My dear Prime Minister,

IMPERIAL CONFERENCE

Since last mail I have had interesting and very favorable reactions to my article [1] about Labour's Opportunities and the imperial Conference from Margaret Bondfield, the new Minister of Labour, and Mr. George Lansbury. [2] I have also had my first interview with Willie Graham, President of the Board of Trade.

Graham gave me the impression of being already a trifle overburdened with the cares of office. He is only 41 years of age but he certainly looked as though he were over 50. We had a fairly long conversation in which, however, he made me do the bulk of the talking. He seemed to appreciate the possibilities latent in the Imperial Conference and I came away not dissatisfied with the discussion.

Yesterday I lunched with Sir Sydney Chapman [3] who was very anxious to talk about what practical measures could be taken to benefit Empire trade, having regard to the political complexion of the Party in office.

I was rather amused by the way in which he started the discussion.

He said that my article on Labour's Opportunity had been sent to him by a friend with a request to know whether he had seen the attack upon himself He, of course, referred to my remark that the 'preparation for previous Imperial Conferences had left almost everything to be desired'.

We discussed the possibility of bulk purchase schemes based not on State trading but on the creation of some super trading organization which might, with Government backing, purchase for a period of years the whole of the output of the Empire in some commodity. I was interested to find that Chapman, who is both timid and cautious, regarded the exploration of possibilities along these lines as being very well worthwhile. He said that he had been particularly interested in my suggestion of roping in the Trade Unions but was not quite sure whether it would prove to be practical politics.

Chapman said that he thought that, by the Imperial Conference the time might well have arrived when the whole scope and work of the Imperial Economic Committee might be reconsidered. He reminded me that it was only due to Canada's objections that the I.E.C. had been so limited in its scope. He felt that what was really necessary was that the I.E.C. should become a really effective general Economic Consultative Committee for the British Empire with at least one member from each Overseas Delegation in close and intimate touch with his own Government and with the whole of that Government's economic policy.

I was particularly interested to get this suggestion from Chapman, coming as it did without any hint in that direction from myself. I told Chapman that if such an arrangement was to be made, it would be quite essential to substitute some more effective Chairman than Sir Halford Mackinder. Mackinder has certainly improved since Chadwick [4] took charge but, even in his improved form, he is not the man to inspire confidence in a really important Body. What I should suggest would be that Mackinder should retain the Chairmanship of the Imperial Shipping Committee and that the I.E.C. should have some other Chairman. There are two men that, at the moment, I should think very well worth considering for that post-Hilton Young [5] or Ormsby-Gore. [6] On the other hand it might be better not to have a politician at all.

27.6.29

AMERICAN TARIFF AND EMPIRE TRADE

During the last few days the papers have contained a good number of references to the effect which the new American Tariff Proposals [7] are having upon Canadian opinion. The 'Financial News' republished the notes sent by the Commonwealth Government to the Government of the United States of America and, unfortunately, drew special attention to the rather unhappy word 'fear'. You will, I have no doubt, be very well aware of the way in which that word was used. It was that the 'Commonwealth Government feared that the new American tariff proposals might force Australia more into Imperial trade and less into American'.

A representative of the 'Financial News' came to see me and I suggested that he should work out the balance of American trade with the more important parts of the British Empire. He has done this and concluded his article with a brief anonymous interview with me. I am enclosing a copy of this article. I imagine that you will agree with my suggestion that an Ad Hoc Imperial Economic Conference to discuss the effect of the American tariff proposals would be most undesirable and likely to prejudice the hopeful negotiations about to start for Naval Agreement [8] and Disarmament generally.

IMPERIAL ECONOMIC COMMITTEE

During the months of May and June there have been no meetings of the Main Committee of the Imperial Economic Committee. This has been due to two causes: firstly to the very formidable mass of work which had to be carried out on the preparation of the draft report on Pig Products and, secondly, owing to illness depleting Chadwick's staff. In all the preliminary work on the report Chadwick receives no assistance from Mackinder, who reserves himself for actually presiding at meetings and putting in a considerable amount of work on the final drafts of the report.

The draft of the Pig Report is now completed and I am rather horrified to find that it runs into some 530 paragraphs. We are most anxious to get the report completed by the end of July and this is going to mean a great deal of work in the coming month.

The report has to be fully discussed by the Main Committee, it will then be sent to a Drafting Committee, on which I am sure to be asked to serve, and, after re-drafting, will have to be finally approved by the Main Committee.

EMPIRE MARKETING BOARD

No meetings of the Empire Marketing Board or of its Main Committees have yet been held since the new Government came into office. I am looking forward, with considerable interest, to the first meeting which will be presided over by Lord Passfield [9]-a name which effectively disguises our old friend Sidney Webb. He has decided to ask Dr. Drummond Shiels, the Under-Secretary of State for India, to become the Chairman of the Research Grants Committee, and to ask Lunn [10], the Under-Secretary of State for the Colonies, to be Chairman of the Publicity Committee.

Drummond Shiels should prove a good appointment. He is very keen on Empire development, was a member of the Commission on the Constitution of Ceylon and, although no flyer, should do quite well. I am going to urge at the first meeting of the Board that a great deal more attention should be given to marketing than has been the case in the past.

Yours sincerely, F. L. MCDOUGALL

1 See Letter 239.

2 First Commissioner of Works.

3 Economic Adviser to the British Government; Permanent Secretary at the Board of Trade 1920-27.

4 Sir David Chadwick, Secretary to the Imperial Economic Committee.

5 Sir Edward Hilton Young, Conservative M.P.; Editor-in-Chief of the Financial News.

6 William Ormsby-Gore, Conservative M.P.; Parliamentary Under- Secretary for the Colonies 1922-24 and 1924-29; Vice-Chairman of the Empire Marketing Board 1926-29.

7 See note 15 to Letter 223.

8 Anglo-American discussions, mainly concerning parity in cruiser strengths, held as a prelude to the five-power London Naval Conference 1930 9 Secretary for the Colonies and for Dominion Affairs.

10 William Lunn.