72

25th May, 1926

PERSONAL & CONFIDENTIAL

Dear Mr. Bruce,

GENERAL STRIKE

After signing my last letter to you [1], I was able to add the words that the General Strike had just been called off. Last week there was no mail and to-day it is possible to get the happenings of the General Strike a little more in perspective. There can now be no doubt that the Trade Union Congress called off the strike unconditionally. This has become clear owing to the way in which the Left Wing has been attacking the Right Wing and the attitude of the miners to the Trade Union Congress.

Mr. Bevin [2] and two of the other leaders last week made a rather futile attempt to show that Sir Herbert Samuel [3] was really empowered by the Government to initiate negotiations for a settlement of the coal stoppage but this attempt broke down hopelessly.

Apart from Mr. MacDonald [4], who, since the strike, has described the Government as being incompetent to run even a Whelk Stall, it seems generally admitted that Mr. Baldwin [5] played his part extraordinarily well. In this connection I had a very interesting talk with Casey' some little time ago. He told me that the general impression in the Cabinet Secretariat was that the Prime Minister was not particularly able and not particularly energetic. In the two or three interviews that I have had with Mr. Baldwin, I have found him extremely nice but not very quick in the uptake and I have had no means of knowing as to whether he is really energetic or not. At any rate Mr. Baldwin did not create in my mind the impression of being a very big man. In the strike crisis there can, however, be no doubt that he acted as a real leader and in his case I feel that character has proved more important than great ability or even than energy.

During the last few days there has been a tendency in the press to compare Mr. Baldwin with Abraham Lincoln and when one remembers the way in which Lincoln was attacked during the first two years of the Civil War because he was not prepared to adopt a ruthless attitude, there may be something in the parallel.

I enclose a copy of the 'Times' report of the Debate in the House of Commons on the day following the calling off of the strike.

Probably there was more pessimism on May 13th than actually during the strike itself. All sorts of rumours were flying about as to employers adopting a reactionary policy but, fortunately, this did not prove to be the case and if you will read Mr. Baldwin's speech, it gives a very clear idea of the way in which he faced the situation. [7]

Unfortunately up to the present time no progress has been made towards a settlement of the coal dispute. Both the owners and the miners are adopting a recalcitrant attitude and both parties received, over the weekend, a severe public rebuke from the Prime Minister. There is so much bad spirit between the owners and the miners that, on this ground alone, some form of Government interference in the industry appears to be almost essential. The coal stoppage will have a very disturbing effect upon the course of British trade but it is important to note, as I am pointing out at every opportunity, that up to the end of April-that is before the beginning of the General Strike-1926 was creating a worse record than 1925.

COMMERCIAL EFFICIENCY AND INDUSTRIAL PEACE

With my letter of the 11th May [8] I forwarded a copy of a memorandum on this subject and informed you that I had sent a copy of it to Mr. Tom Jones [9] and had also shewn it to Mr. Ormsby- Gore. [10] Later I showed the memorandum to Mr. Amery [11], who expressed great interest and said that he would like to circulate the document to the Members of the Government. Mr. Amery also asked me to send copies to as many of my friends in the Conservative ranks of the House of Commons who I thought would take a sympathetic attitude. I, therefore, had the document roneoed and distributed about 50 copies. After the Whitsuntide recess, I propose to try and arrange for a meeting in the House of Commons to consider the memorandum and at this meeting I propose to talk about Empire Development and to get Mr. Francis Lloyd, one of the joint authors of 'The Secret of High Wages' [12], to talk about Industrial Reconstruction.

Having been urged by Mr. Amery to push these ideas for all I was worth, I discussed them with Lloyd and Austin [13] and also with the Editor of the 'Spectator' (a Mr. Adkins) who published a portion of the memorandum, omitting all reference to my name, in the 'Spectator' on 15th May. [14]

WEST INDIAN CONFERENCE

Some months ago the Colonial Office asked me if I would address the Conference of West Indian Legislators, which was to be held in London during May, on the subject of Agricultural Organization.

The Conference is meeting in a room in the House of Lords and, as you know, is considering the possibility of some federal development for the whole of the West Indies. The Colonial Office have felt that this provided an excellent opportunity of bringing home to a number of important West Indian people the significance of order rather than chaos in the marketing of West Indian goods.

I met the Conference on Friday last and spoke to them for about forty minutes and there followed a discussion lasting for about an hour and a half. I am enclosing a copy of the notes which I made for my address. If you have time to read these notes, you may find them a rather useful basis for showing the Australian producer how large a load of responsibility the new Merchandise Marks Bill [15] and the Publicity Campaign, which the Government is about to inaugurate, places on his shoulders so far as quality, regulation of supplies and orderly marketing are concerned.

MERCHANDISE MARKS BILL

I listened to Sir Philip Cunliffe-Lister's [16] second reading speech on this Bill in the House of Commons and to a considerable portion of the Debate that followed and, two or three days later, in the course of an interview with Mr. Amery, I asked him whether he had carefully considered the memorandum which the Imperial Economic Committee had submitted in which the Committee objected to a choice being given to the retailer as to whether he should mark goods with the name of the country of origin or with the words 'Empire' or 'Foreign'. Mr. Amery stated that the Government was perfectly aware of the Imperial Economic Committee's attitude but, unfortunately, the views of the Governments of the Empire had been solicited by cable and, on balance, the answers from the Governments indicated that they would prefer marking with the name of the country of origin. I told Mr. Amery that, in my opinion, there was some little confusion and I did not think that the Governments clearly distinguished between marking at the time of importation and the requirements for marking by the retailer. Mr.

Amery asked me to write him a letter on the subject, which I did and I enclose a copy herewith. I also decided to send a cable on the 15th May, of which the following is the text:

Merchandise Marks Bill. British Government under impression Empire Governments desire retailers to mark goods with name of country rather than as Empire or Foreign. Imperial Economic Committee attaches great importance to words 'Empire' and 'Foreign'. Please see your cable H.M. Government on this subject, Imperial Economic Committee's memorandum attached my letter 11th March and my letter 4th March. [17] If you agree with memorandum suggest you cable Government.

AUSTRALIAN WINE

Since my letter of the 3rd February last [18] I have had a long discussion with Sir Sydney Chapman [19] on Australian wines and I asked him to write fully the point of view of the British Government on the subject. I have just received a very lengthy letter from Sir Sydney traversing the whole of the ground. I think that you will find this letter quite useful to prepare your mind before the Imperial Conference and I therefore forward a copy herewith.

I am sending a copy of this communication to Major Oakley [20] as I have had two or three communications from him on the subject of wine.

In connection with Australian wines, I met Sir Park Goff, M.P., the Vice Chairman of the House of Commons Kitchen Committee, the other day and as a result of our conversation, I wrote him a letter to bring before the Kitchen Committee on the subject of Australian wines and the Wine Card of the restaurants in the House of Commons. I told him that on one occasion I was dining in the House and a series of divisions took all my hosts away for about a quarter of an hour or twenty minutes. To avoid boredom, I studied the Wine Card and, being statistically minded, counted the wines of foreign origin and the wines of Empire origin. I found 152 foreign wines, 3 South African and 1 Australian, the latter being of a particularly unrepresentative character. I told Sir Park Goff that Australia produced a certain quantity of really reputable wine which no one need be ashamed to drink at dinner. Sir Park Goff promised to bring the matter before the Kitchen Committee and I hope that, as a result, we shall be able to get several representative Australian wines on the Wine List.

My efforts to induce Clubs to stock good Australian wines have been seriously hampered by the very high prices asked by the Agents of the Australian companies. It is absurd to imagine that people will cheerfully pay 7/6d. a bottle for even a good Australian burgundy when they can get reputable Beaune for 5/- a bottle or a very fair Pommard for 6/-. I am glad to say that at least one Australian firm-Lindeman's-realising this difficulty, are taking steps to ship a good dry wine in casks and to arrange for bottling on this side of the world.

EMPIRE TRADE

In my letter of 29th April I referred to some articles published by Mr. W. T. Layton [21] in the 'Manchester Guardian' and told you that I was writing a letter to them on the subject. They published my letter on 30th April and I enclose a copy herewith. [22]

In the same letter I referred to Commdr. Hilton Young's [23] remarks on the Budget. I was so impressed with the excellence of his points, especially coming from such a quarter, that I drew the attention of the 'Times' to his speech and suggested that they might find it a useful peg on which to hang a leading article. The 'Times' published on 1st May the article which I suggested, of which I enclose a copy.

I also enclose a copy of the 9th article on the Economic Problems of the Empire from the 'Times Trade Supplement'. [24]

THE 'TIMES' EMPIRE DAY NUMBER

Yesterday the 'Times' published its Empire Day Supplement and I read with the greatest of interest your message. If you take the trouble to read the other messages from the Prime Ministers of the

Empire, you will notice that you alone have left the dull but safe ground of pious platitude and rubbed in the great importance of the economic issue. I wrote for this Supplement an article which I had intended should have been called 'Empire Trade 1923-26' but which the Sub-Editor dished up under the title of 'Trade under the Flag'. I enclose a copy of my article which I hope you will find of some interest. Apparently as I wrote it, the article was a little longer than would fit into the space allotted and, unfortunately, the Sub-Editing was far from intelligent, the paragraphs cut out just destroying the contrast between 1923 and 1926 which I had intended to make a special feature of the article. I am therefore attaching a copy of the article as I wrote it with the portions that have been omitted marked.

EXPORT CONTROL

On the 17th of May, on the Board of Trade Vote, Mr. A. V.

Alexander, a front bench Labour Member, who was the Parliamentary Secretary to the Board of Trade in the Labour Government, raised the question of the effect of New Zealand, and, to a less extent, Australian Export Control legislation on Great Britain and Sir Philip Cunliffe-Lister replied. I enclose the pages of the Hansard containing the report of this portion of the debate.

Mr. Alexander stated in his speech that he had, on an earlier date, asked the question without notice on this subject. After that question was asked, I wrote to Cunliffe-Lister giving him a brief account of the Australian point of view and enclosing a copy of the interview with Sir James Cooper [25], published in the 'Imperial Food journal', of which I sent you a copy with my letter of the 29th April. Cunliffe-Lister made quite an effective answer, except in the last sentences, in which he appears to have neglected the all important question of produce returning a price to the producer which will cover his cost of production.

IMPERIAL ECONOMIC COMMITTEE

On 19th May I cabled to you as follows:

Imperial Economic Committee commenced Dairy enquiry yesterday. It proposes to include Butter, Cheese and all milk products, Margarine and its raw materials, Eggs and Poultry in scope of Dairy Produce enquiry. First meeting Amery's spending body tomorrow. Clearly realised that body is temporary and subject to full consideration at Imperial Conference.

I cabled the proposed scope of the Dairying enquiry in order to give your Government an opportunity of suggesting any further addition or modification of the subjects which it was proposed to include under the general head of Dairy Produce.

At the first meeting, the London Agency of the New Zealand Dairy Produce Export Control Board attended as witnesses and Mr. Motion was closely cross-examined by Sir Thomas Allen (the representative of the Co-operative Wholesale Society) on the New Zealand Export Control methods. On the whole Mr. Motion impressed the Committee very favourably.

Since the first meeting, we have had two sittings, at which witnesses from the Irish Free State gave evidence. The Committee is sitting all day tomorrow taking further evidence from the Irish Free State and next Tuesday the London Agency of the Australian Dairy Produce Board will be in the witness chairs.

I have arranged with Major King [26] that he should give evidence on this occasion and that Sir James Cooper should be invited to give evidence at a later stage in the enquiry on general problems and particularly on the finance of the industry.

The Committee tentatively decided at the first informal meeting to set up 2 Sub-Committees, one to deal with Eggs and Poultry and the other to deal with Margarine and the edible oils and fats. South Africa, Ireland and New Zealand all desired to serve on the Eggs and Poultry Sub-Committee and I, therefore, arranged with Forsyth [27] of the New Zealand Delegation, with whom I would keep in close touch, to see that Australian egg interests receive due consideration in the work of the Sub-Committee and, on the strong request of the representatives of the Crown Colonies and India, I consented to serve on the Margarine Sub-Committee.

I have been anticipating that either Sir Mark Sheldon [28] would have been returning to London or else that you would have made some other temporary appointment on the Imperial Economic Committee for the Dairy Produce enquiry. I thought it possible, for instance, that you might have asked Mr. John Sanderson [29] to have served.

PERSONNEL OF COMMITTEE

I have already informed you that the Government have appointed Mr.

F. N. Blundell [30], M.P., to be the British representative of Agriculture on the Committee and told you that I considered this a most suitable appointment. Mr. Blundell attends accompanied by an advisor from the Minister of Agriculture.

I understand that Mr. W. S. Crawford, the Advertising specialist, is on the point of resigning from the Imperial Economic Committee as he has been asked to serve on the Empire Marketing Board. The Government will, I think, be glad to receive Mr. Crawford's resignation and will probably appoint a Member of Parliament- possibly Mr. WardlawMilne [31]-in his place.

It is also probable that Sir Algernon Firth [32] will resign at the end of the present enquiry and the name of Lord Lovat has been suggested as a very suitable leader to the British Delegation.

EMPIRE MARKETING BOARD

The first informal meeting of the Empire Marketing Board took place on the 20th of May. Mr. Amery was in the Chair and there were also present Mr. Ormsby-Gore, who has been appointed Vice- Chairman, Lord Bledisloe, Parliamentary Secretary to the Department of Agriculture, Major Elliot [33], Under-Secretary of State for Scotland, Sir William Clark, representing the Department of Overseas Trade and five Members of the Imperial Economic Committee. The Canadian Delegate [34] was not present nor was Sir Thomas Allen from the British Delegation.

Mr. Amery explained that he was making the first meeting informal as it had been represented to him that it was desirable that he should inform the Governments of the Empire of the proposed personnel before the names were published. I suggested to Mr.

Amery that in cabling to the Governments of the Empire, he should make it perfectly clear that the constitution of the Empire Marketing Board was purely of a temporary nature pending full discussion at the Imperial Conference and to lay especial emphasis on the fact that the members of the Board were serving in a purely advisory capacity, the whole of the responsibility resting upon the Secretary of State.

Mr. Amery agreed that this would be desirable. I felt that in this way the possible objections from South Africa and Canada would be over-come.

There was a most interesting discussion principally on the subject of Research, in which I took the opportunity of stressing as vigorously as I could the importance of the Empire Marketing Board making arrangements whereby the producers both in this country and particularly overseas should be made aware of the work that was being undertaken both as regards research and publicity on their behalf. I was very glad to see that both Mr. Amery and Mr. Ormsby- Gore strongly supported this point of view.

Towards the end of the sitting Lord Bledisloe, on behalf of British Agriculture, made a suggestion that a definite percentage of the Annual Grant should be allotted to British Agriculture. I pointed out that while I could raise no objection to such a course if it was considered desirable by the Secretary of State, yet the Imperial Economic Committee, after most careful thought, had come to the conclusion that any allocation of the Annual Grant in the form of percentages to the various Dominions and Colonies would prove a most hopeless and unwelcomed undertaking and that I very much hoped that Lord Bledisloe's suggestion would be most carefully weighed before the Board agreed. I was again pleased to find that Mr. Amery supported this point of view and was again strongly seconded by Mr. Ormsby-Gore.

Yours sincerely, F. L. MCDOUGALL

1 Letter 70 2 Ernest Bevin, General Secretary of the Transport and General Workers' Union.

3 Chairman of the Royal Commission on the Coal Industry 1925.

4 Ramsay MacDonald, Leader of the Labour Opposition.

5 Stanley Baldwin, Prime Minister.

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

7 Baldwin called for a resumption of work 'in a spirit of co- operation, putting behind us all malice and all vindictiveness'.

See the Times, 13 May, and House of Commons, Parliamentary Debates, fifth series, vol. 195, cols 877-8.

8 Letter 70.

9 Principal Assistant Secretary to the Cabinet.

10 William Ormsby-Gore, Parliamentary Under-Secretary for the Colonies.

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

12 See note 3 to Letter 60.

13 Co-author of The Secret of High Wages; engineer on the staff of Armstrong, Whitworth & Co.

14 Spectator, vol. 136, no. 5 107, 15 May 1926, P. 843. The memorandum outlined three essentials for improving the standard of living for British workers-industrial peace and industrial goodwill, reconstruction, and markets-and urged the Government to declare a policy along such lines.

15 See Letter 52.

16 President of the Board of Trade. For his speech see House of Commons, Parliamentary Debates, fifth series, vol. 195, cols 887- 93 17 See Letters 58 and 57. It is not clear to which cable from the Bruce Government McDougall refers. It may be the 'most helpful "hurry up" cable' mentioned in Letter 57. This cable, sent on 20 February in support of the recommendation of the Imperial Economic Committee, stressed that 'any [publicity] campaign launched in Britain should be on the basis of first preference to British producers, with Dominion and Colonial produce second'. The cable is on file AA:CP78/22, 224/1926.

18 Letter 52.

19 Permanent Secretary at the Board of Trade.

20 R. McK. Oakley, Commonwealth Comptroller-General of Customs 1923-27 21 Editor of the Economist.

22 See note 4 to Letter 68.

23 E. Hilton Young, Independent M.P.; Editor of the Financial News; Financial Secretary to the Treasury 1921-22; British representative at The Hague Conference on International Finance 1922.

24 'Economic Problems of the Empire. IX.-Transport and Communications', Times Imperial and Foreign Trade and Engineering Supplement, 22 May.

25 Company director; Chairman of the London Agencies of the Commonwealth Dried Fruits and Dairy Produce Control Boards.

26 J. R. King, member of the London Agency of the Commonwealth Dairy Produce Control Board; formerly London representative for the Coastal Farmers' Co-operative Society in New South Wales.

27 R. S. Forsyth.

28 Former senior Australian representative on the Imperial Economic Committee.

29 Director of the Australian Agricultural Company, the Bank of Australasia and the Australian Mercantile Land and Finance Company.

30 Conservative M.P.; President of the Central and Associated Chambers of Agriculture.

31 J. S. Wardlaw-Milne, Conservative M.P.; Vice-Chairman of the Conservative Imperial Affairs Committee.

32 United Kingdom representative on the Imperial Economic Committee.

33 Walter Elliot.

34 W. A. Wilson.