62

8th April, 1926

PRIVATE & CONFIDENTIAL

Dear Mr. Bruce,

My last letter to you was written on the day before the Easter holidays. As I have had no spell since I returned to London in January 1925, I took a couple of extra days away from the office this week. On my return yesterday I found nothing of any importance awaiting me.

I have to acknowledge your letter about Major Greene. [1] I will certainly do what I can to place him in the way of getting the right type of information and of meeting men who will be useful to him.

BRITISH TRADE

In several recent letters I have drawn your attention to two points (1) that Bankers, Economists, and the President of the Board of Trade [2], strongly supported by the stunt press, have been forecasting a substantial improvement in trade this year.

(2) that so far the official trade figures not only do not support this optimism but, so far as exports go, actually make a worse showing than in 1925.

During the last fortnight a more chastened tone has been observable. I am afraid that once more the happenings of the last three years are to be repeated.

Each year, December and January, those in financial and official responsibility have declared that the worst is over and that there are grounds for a quiet optimism'. One year in the three this optimism lasted until May but normally it evaporates in March and I think that this year, in spite of the greater flourish of trumpets from Lombard Street and Whitehall, the month of April will see the end of any marked optimism.

Frankly I cannot see any reason why British trade should revive at the present time for the following reasons:

(1) the High Authorities attribute British depression mainly to world impoverishment consequent upon the war. The comparative figures of British and Foreign export trade developments, which I sent you with my letter of March 18th [3], go a long way to disproving this point of view.

(2) under-production by the workers is practised to a much greater extent in Great Britain than in any of the countries that are her commercial rivals.

(3) Great Britain has chosen (as has Australia to a far greater degree) to regard the social welfare of the worker as being a State responsibility to a greater extent than have most of her rivals. Whatever social advantages this policy gives, it must be a handicap under present conditions of labour. It seems to me that the obvious corollary to such a view point is the necessity for sheltered markets for the export trade of Great Britain. I wonder whether you would feel inclined to develop this idea in your speeches in this country in the Autumn. It could be done without in any way touching the question of internal protection.

(4) there are not wanting signs of an ending of the 'boom' in the United States. A slump may not eventuate there but if there is any serious falling off in the internal purchasing power of the United States of America, then we may well see a great effort at expansion of American export trade, with severe consequence to Great Britain in the South American and in other markets.

I am convinced that the one permanent road to British prosperity is through Empire Development, It will be a slow road but a sure one. If I am right in assuming that 1926 is going to be another year of overseas trade depression, then in October it will be easier to preach the necessity for a bold, sustained and comprehensive policy of Empire development.

The West African per capita purchases, which I have quoted to you before, are a most striking example of how Imperial schemes assist Great Britain. The 22,000,000 natives of the West African Colonies buy 12/per head from Great Britain, whereas the citizens of the U.S.A. only buy 8/8d.

While writing on this subject, I should like to say that I hope you will give me, at an early date, information as to what, if any, use you intend to make of me at the Imperial Conference. If there are any special points you desire investigated, data collected, etc., an early notification will make good work the more possible. I should very much appreciate hearing from you on this subject before long.

FUTURE OF THE IMPERIAL ECONOMIC COMMITTEE

I propose to send you such ideas as I may have on this subject from time to time and later to gather the various ideas together into a single memorandum which I will send to you some weeks before you sail from Australia.

I have one fresh idea to make today. I should like to see the Imperial Economic Committee become responsible for a Year Book on Empire Development. I do not mean a very heavy statistical volume, such as the official Dominion Yearbooks, but a survey of developments (a) undertaken; (b) proposed in each Dominion and Colony, and a yearly statement as to the progress of Empire trade both between Great Britain and the Empire and between the various parts of the Empire. I think such a Year Book, if well done, would arouse the greatest interest and receive a good 'press' throughout the Empire. It should have an excellent educational effect. Who in Australia knows what is being undertaken in East or West Africa, or indeed in South Africa? There is no publication which does anything of the sort I have in mind. I should like to know if you think well of the proposal.

My idea is that a Sub-Committee of the Imperial Economic Committee should be responsible for the Year Book. Needless to say I should like to serve on such a body. Perhaps you might feel inclined to sponsor this idea at the Imperial Conference.

AUSTRALIAN MARKETING IN LONDON

By this mail I received from the Commonwealth Dried Fruit Board a memorandum on the joint Publicity Scheme in which, inter alia, it was stated that your Government was preparing Export Control legislation for Canned Fruit, and was thought to be contemplating legislation for Meat, Wines and Fresh Fruit.

I am convinced that the joint Publicity Scheme is well conceived and ought to be both economical and effective.

I do, however, desire once again to draw your attention to the question of general policy for Australian marketing in London.

There now exist the London Agencies for Dried Fruits and for Dairy Produce; a Canned Fruit London Agency may soon be in existence.

[4] There is also the London office of the Australian Meat Council. I am convinced that we must have one London Office to control general policy. I have, I know, expressed this view to you already several times but the position becomes clearer as time goes on.

It seems to me that what we really require is something as follows:

(a) A technical representative for each type of commodity, who would undertake the day to day business of supervising the distribution of the commodity. He should be located in the heart of the trade. He would normally require one fully qualified Assistant and a small clerical staff He would correspond direct with Australia on questions of detail but copies of all his correspondence should be sent to the Central London Board.

(b) A Central Australian Marketing Office. Here there should be a Board charged with the duties of (1) settling general policy, such as questions affecting method of selling, use of Brokers, remuneration of Brokers, negotiations with Trade Organizations, with Railways, Dock Authorities, Cold Storage Corporations, etc. In addition the settlement of large questions of business policy, such as forcing sales or alternatively of holding produce back in anticipation of a better market. This latter question is one the determination of which really requires a wide general knowledge of the state of trade of this country.

(2) Publicity, as already arranged under the joint scheme.

(3) Educational propaganda, such as I undertake personally at present.

The Central Board should consist of a representative for each type of commodity, the Australian representative or representatives on the Imperial Economic Committee and a Government Chairman.

I feel that some such scheme would secure full coordination, would avoid the possibility of foolish action by one London Agency wrecking the prospects of another and would also prove a more economical method of running Australian Marketing.

If you have a series of independent London Agencies, it will prove difficult to (a) obtain the services of sufficient men of the right calibre to serve thereon; (b) to pay the members and chief officials sufficient remuneration to obtain the best type of services, a matter to which I venture to suggest Australia is not paying sufficient attention.

I feel fairly confident that you have in mind some such type of organization.

THE VALUE OF THE EMPIRE TO BRITISH INDUSTRIES

In my last letter I sent you schedules in regard to Birmingham and Leicester. Today I enclose particulars about Glasgow and Bradford.

PRESS CUTTINGS

I enclose two cuttings from the Manchester Guardian Commercial, one comment on the Annual Grant and one an adverse comment on the Merchandise Marks Bill.

Yours sincerely, F. L. MCDOUGALL

1 J. B. Greene, Sydney businessman; younger brother of Senator Sir Walter Massy Greene, several times a Minister in the Bruce and Lyons inter-war governments.

2 Sir Philip Cunliffe-Lister.

3 Letter 59.

4 The Canned Fruits Export Control Bill providing for the establishment of a Canned Fruits Control Board was introduced in the House of Representatives on 13 July and received assent on 16 August. The Act required that a majority of canners had to vote in favour of the proposed system of control before a Board could be established. A poll was accordingly held On 29 November and the proposal approved by a substantial majority.