My dear Prime Minister,
This morning has brought me your letter of the 11th July.  In your comments on my letter of the 11th May  you do not make it clear whether or not you feel that any especially advantageous purposes would be served by a visit of Loveday  to Australia. I rather take it from the tone of your comments that whereas you would welcome any decision on the part of the economic organisations of the League to send Mr. Loveday to visit Australia, you are not very likely to take the initiative in inviting him, or in providing any finance in connection with the visit.
I expect that under present circumstances the wisest line is simply to urge on Salter  and the Economic Committee of the League that it is quite insufficient for the Economic Staff of the League to understand Europe, and that it is necessary for them to have a lively understanding of conditions in the distant non- European countries. It will probably be better for the Director of the new Economic Research Bureau  to have been appointed, and to have settled down for six months to perhaps a year, before any active steps towards the arrangements for such a visit were taken in hand. This would mean that there would be an opportunity of discussing this point fully with you when you come over for the Imperial Conference.
I was particularly glad to receive your comments on the suggestion of the British Delegation to the Economic Consultative Committee of the League, which was later adopted by the Consultative Committee, that a conference of business men should be held.  I had, perhaps, not made it quite sufficiently clear that the British Delegation's idea was for a conference of business men in a given group of industries. I am very doubtful whether any really useful purpose would be achieved by any such conference, but at the same time, as you recognise, it is impossible entirely to block the development of such ideas, and one must therefore do everything possible to divert them into useful, or at least harmless channels.
I was rather interested to see your comments on Elliot's  articles, and I quite understand your feeling that they do not contribute anything very much of value, but I am not quite sure that I agree, because it is tremendously important to get a new and progressive spirit into Empire development and perhaps particularly Colonial development. The Colonial Office is probably the worst department in Whitehall, and presides with a spirit of obstruction, superiority and boredom over the fate of the Colonial Empire. These articles of Elliot's were regarded as pernicious, indeed subservient [sic], by the Colonial Office, but I feel they should make people think.
With regard to the formation of the group about which I wrote you on the 23rd May , several difficulties arose, with the result that the first meetings of this group have been postponed until the middle of October. Its membership is now, however, arranged, and will consist of Mackinder , Chadwick , Sir Basil Blackett , Philip Kerr , Sir Arthur Balfour , Sir William Larke  and myself I am arranging to meet Blackett before I leave for Geneva, as he has been appointed a Chairman of the new Colonial Development Fund , and that fund may overlap in certain directions with the Empire Marketing Board.
I travelled up last night from Aberdeen, where I spent three days in consultation with Dr. Orr  and his staff on a whole series of matters concerning animal nutrition, wool research etc. I think perhaps you will be amused to hear that I took two afternoons off for the purpose of playing golf. The last game I had-if you would call it a game-was when I went round the course at Frankston with you in 1924. With Orr I played on a delightful nine hole course at Kin Tor and to my intense amusement I found that Orr's game was considerably worse than my own. I think that the combined stimulus of the rounds at Frankston and Kin Tor will stimulate me towards taking golf up, because although in many ways I prefer walking, yet at the same time I do not think that walking provides the same mental relaxation as golf. At golf one's mind does become concentrated on the miserable ball, whereas when walking one is, of course, thinking the whole time.
I shall write to you by the next mail about several of the points discussed with Orr, as some of them were of considerable importance to Australia.
Yours sincerely, F. L. MCDOUGALL