51

27th January, 1926

PERSONAL & CONFIDENTIAL

Dear Mr. Bruce,

IMPERIAL CONFERENCE

After the long screed that I inflicted upon you last week on this subject, I feel some diffidence in starting again, but my interest in the subject must be my excuse. I am under the impression that, although the regular discussion of political problems at Imperial Conferences is necessary and important, there can be no rapid progress towards closer Imperial union on political questions, and that the best policy on the political side of Empire is 'festina lente'. With Imperial Economic Development, on the other hand, I feel that every year, nearly every month is of great importance and that if we use the present years wisely, we shall be taking the surest steps towards solving the political questions. Holding these views as strongly as I do, I was particularly struck by words used by Mr. Amery [1] last night at an Empire Press dinner.

He said: 'The main questions discussed at last year's Conference were Empire trade and settlement. If these two questions were rightly solved, they would have solved every social and political problem with which the next generation had to cope. They would have solved the problem of unemployment and the standard of living in this country. If they solved rightly the problem of Empire co- operation in development and trade they would solve automatically the cognate problems of Empire security and Empire co-operation in external policy'.

This is, from my view point, an entirely true and satisfactory statement but when one realises that H.M. Government have done practically nothing to further development and trade and do not appear to be likely to do anything in the near future, one feels rather inclined to despair. My purpose, however, in quoting Amery is to reinforce the point that an Imperial Economic Conference would serve the most useful purpose and be more fruitful, at any rate in the long run, than the political conference.

I am hoping that, in the forthcoming Imperial Economic Committee Report, it will be possible to establish a case for special treatment of the products of close settlement. I have already mentioned this hope to you several times but I have now worked out some interesting data on the subject. If wheat and meat are placed in one category as essential foodstuffs and the products of mixed farming and fruit growing (Dairy products, pig products, fruit and wine) in another, a number of interesting facts can be deduced.

It is probably roughly accurate to assume that wheat growing in Australia gives permanent employment to from 2 to 4 men per square mile. In Canada perhaps one or two more. The pastoral industry employs far less per unit of area. On the other hand mixed farming and fruit employ from 20 to 40 men per square mile in rainfall districts and up to say 60 in irrigation districts. The density of population in the best wheat districts of the Canadian prairie provinces is from 5 to 15 per square mile, while in the fruit and mixed farming areas of Ontario from 40 to 60. In Australia a comparison could be made between say the Wimmera and Mildura. It seems to follow that if Great Britain could guarantee markets for the products of the orchard, vineyard and mixed farm, immediate progress on a large scale could be made in land settlement, and at the same time the decay of agriculture in Great Britain could be arrested.

I wonder whether, if a Conference is to be held in October, it would be possible for you to have any estimates prepared as to what progress could be made with migration if Great Britain could guarantee markets for these products? This would, I suppose, involve consultation with the States and that might present some difficulties. People here are very disturbed over the poor progress of migration and I feel sure that if you could come over here with propositions for a real, progressive migration policy based upon secured markets, the effect would be great.

I am to see Mr. Amery on Monday and hope to be able to show him how very unsatisfactory is the present state of affairs on Empire economics. I feel that he has been so absorbed first with Ireland [2], then Mosul [3], that he has not had the leisure to give economic questions the attention which they urgently require.

I enclose an interesting leader from the 'Times Trade Supplement' on the Imperial Conference. [4]

IMPERIAL ECONOMIC COMMITTEE

There is no further news to report. The Drafting Committee is working hard, meeting three or four times a week and the whole of Saturdays; the other Sub-Committees have nearly completed their sectional reports.

STATE OF TRADE IN GREAT BRITAIN

Once again as the New Year comes in we are having the usual burst of optimistic eloquence from the Chairmen of the Big Five Banks.

[5] The last three years have seen the same thing happen. About November papers begin to talk optimistically and to decry the pessimist; in January, the Bankers join the chorus. Politicians and business men join in, and the year starts with high hopes. In 1924 this spirit lasted until May, in 1925 only till March. I hope this year's events may justify a much more prolonged burst of optimism but frankly I do not quite see the justification as yet.

The coal subsidy has stimulated the coal and iron and steel trades, and perhaps the restraining influence of the return to the gold standard is decreasing but the December export trade figures were still profoundly depressing, I have written an article about British trade and Empire markets, a copy of which I will forward next mail, in case you find time to read it. I do not know whether I shall make any use of it but writing a thing down helps to clear one's own mind.

THE 'TIMES' AND EMPIRE TRADE

I had Brumwell [6] of the 'Times' to lunch today. He is, as I believe I have mentioned, NO. 2 on the 'Times' and takes charge when Dawson [7] is away. He is an extremely keen man on the subject of Empire trade. He told me that the 'Times' is prepared to undertake a really strong and sustained campaign to convince the Government, Parliament and its readers, of the urgency of strong action on Empire development. I had been urging this on the 'Times'. Brumwell, however, said that the question for the 'Times' to decide was when to act. He felt that the Government and people cannot think and act on two big things at one time. At present and until the report of the Coal Commission [8] has been issued and digested, he did not think the time ripe for a strong effort towards action. I naturally told him that he was the best judge of 'when' but that so far as I could see, the matter was urgent especially if an Imperial Conference was to be held in October. He seemed to think that either April, before the Budget came up, or else about a fortnight after the Budget, would be the time to act.

He urged me to do everything possible to engage the keen interest of Members as soon as Parliament reassembled.

AUSTRALIAN WINE

You will be interested to hear that Australian Sweet Red Wine is being freely retailed here at 2/6d. per bottle. Some of the stuff is far from bad. I was at Travers (the biggest wholesale grocers) last week and they showed me their brand Of 2/6d. Australian Sweet Red. I suggested to them that they should send you two or three bottles just to give you an idea of the type of wine that is being now sold freely.

Travers are very much impressed by the growth of the demand. The price is naturally dependent upon both the 4/- export bounty and the 4/preference but if they can be maintained, I think a very large trade can be established. The wine is both better in flavour and much stronger in alcohol than Tarragona.

Yours sincerely, F. L. MCDOUGALL

1 Leopold Amery, Secretary for the Colonies and for Dominion Affairs.

2 See note 4 to Letter 48 3 See note 8 to Letter 34.

4 Times Imperial and Foreign Trade and Engineering Supplement, 23 January. The editorial deplored the Government's failure to act on the recommendations of the Imperial Economic Committee and its failure to 'redeem its pledges of 1923'.

5 The 'Big Five' banks were Barclays, the Midland, the Westminster, Lloyds and the National Provincial.

6 George Brumwell, Assistant Editor of the Times.

7 Geoffrey Dawson, Editor of the Times.

8 See note 3 to Letter 27.