83

5th August, 1926

PERSONAL & CONFIDENTIAL

Dear Mr. Bruce,

IMPERIAL ECONOMIC COMMITTEE

I had hoped to have been able to have posted you the completed draft of the Dairy Produce Report by this mail. Twice during the last week the Committee have sat until the early hours of the morning and last night the Report was signed by most of the Members but we sat from 11 a.m. until 2 a.m. this morning and so many alterations were made in the draft that it was finally decided that the Chairman [1], Mr. Wilson [2], the Canadian Representative, and myself should be responsible for the re- drafting of certain paragraphs. I therefore feel that to send you the mutilated draft would merely be to waste your time.

The report may be printed in time to send a copy to you at Colombo but if that is not the case, I will send you a revised draft at Colombo and take care to see that a printed copy reaches you at Port Said on September 22nd.

I think there is little doubt that it is a good report. In the Fruit Report the chief emphasis was thrown upon marketing. In this report we have felt that the chief emphasis should be upon production.

Immediately the section dealing with Export Control legislation was agreed by the Committee, I consulted with Mr. Clifford [3] and sent you the following cable:-

Dairy Produce Report of Imperial Economic Committee will be signed next week. Section dealing with Control Boards important. Report will recognise justification for Boards but will urge moderation in use of statutory powers. Will commend methods practised by Australian Board and its London Agency but will severely criticise methods adopted by New Zealand Factories and which the New Zealand Board is reputed to have favoured namely storage butter in United Kingdom for long periods in order hold for problematic high prices with consequent deterioration thus damaging reputation New Zealand Butter throughout trade including retailers.

Mr. Clifford and I decided on this action because we felt that it was very desirable that you should be in early possession of this information, as Mr. Clifford has told me that there are members of the Australian Dairy Produce Export Control Board who are rather inclined towards the adoption of the New Zealand methods which have certainly caused the New Zealand Dairy Produce Board to become extremely unpopular with the trade in this country.

I think you will agree that the Export Control Section is satisfactory from an Australian standpoint. As this section of the report was finally passed last night with only slight amendment, I am enclosing a copy for your information.

Had the Chairman been prepared to have carefully read the various drafts of the report prepared by the Secretary [4] and to have done some work on them, the Committee would have been able to have completed its work yesterday quite easily without rush and without the necessity of leaving a good deal of work over for re-drafting.

I propose to write to you fully about the future of the Imperial Economic Committee by the mail leaving here on the 26th August, in order to catch your boat at Colombo.

EMPIRE MARKETING BOARD

You will be receiving by this mail the first report on the work of the Empire Marketing Board. I arranged with the Secretary [5] that he should send you a copy addressed to the 'Mooltan' at Fremantle.

At the present moment a very difficult situation has arisen as regards the Empire Marketing Board and press advertising. The Treasury objects to paying 10% on all monies expended on press advertising to the Advertising Agents. With one exception, the Publicity Committee of the Empire Marketing Board agrees with the Treasury's point of view but the Advertising Agents have formed a ring and are declining to accept work except upon the 10% basis.

Just how this will develop is a little difficult to say at the moment but the Publicity Committee does not feel that press advertising is very urgent and are quite prepared to go ahead on a Poster Campaign and leave themselves time fully to explore the newspaper situation.

We hope to make a start on the Poster Campaign about the middle of October and to have a sufficient number of specimens of the work which we propose to use later in order to give the Imperial Conference a good idea of what we have in mind.

RELATIONSHIP OF IMPERIAL ECONOMIC COMMITTEE AND THE EMPIRE MARKETING BOARD

You will remember that I sent you a memorandum on this subject a few weeks ago. I am now enclosing copy of a letter which I received from Major Walter Elliot, the Under-Secretary of State for Scotland, in answer to my memorandum [6].

PARLIAMENTARY QUESTIONS

I enclose certain Parliamentary questions which you will find of interest. I am particularly anxious to draw your attention to a question asked by Sir Fredric Wise [7] in the House of Commons on the 26th of July. This question I have specially marked. Sir Fredric Wise is a member who regards himself as a great authority on financial matters and who keeps in very close touch with the Treasury.

Mr. Ormsby-Gore [8] informs me confidentially that there is no doubt that in asking this particular question, Sir Fredric Wise was sounding the position on behalf of the Treasury itself Mr.

Ormsby-Gore further feels that it would be of considerable value if you took very definite cognizance of this question and commented on the idea of a suspension of the Trustee Act, either at the Imperial Conference or on some other public occasion in Great Britain.

Some years ago I think I told you that, in a conversation with Mr.

A. M. Samuel, M.P., Parliamentary Secretary of the Department of Overseas Trade, he stated that if ever he was Chancellor of the Exchequer, the first thing he would do would be to try to repeal this Trustee Act.

There is a general feeling among Members of Parliament who are very keen on Empire Development, that the Treasury and its Chief, Mr. Winston Churchill [9], are bitterly opposed to any policy of Empire Development which involves expenditure and that they would infinitely rather pledge the credit of Great Britain in order to re-establish the currencies of Europe than to spend comparatively small sums or give guarantees to press forward schemes of Empire Development.

You will notice that Mr. Amery [10] dealt well and faithfully with Sir Fredric Wise's question and that Mr. Thomas [11], on behalf of the Labour Party, promptly disassociated the Party from Wise's point of view. At the same time if, as indicated above, Wise's question may be regarded as symptomatic of the Treasury viewpoint, it deserves your close attention.

EMPIRE DEBATE

As you know the Opposition Parties have the right of deciding which votes shall come up for debate in the House of Commons.

During the session which has just closed, neither the Labour nor the Liberal Parties would bring forward the Dominion or Colonial Office Vote for discussion and therefore the only definite debate on Empire subjects occurred on the Appropriation Bill on the 29th of July. It was, however, a very interesting discussion and I am enclosing the whole text of the debate which I think you would like to read on board ship.

I would like to draw your special attention to certain sections of this debate and particularly to the speeches of Mr. Johnston [12] and Mr. Boothby [13], both of whom followed Mr. Amery. Boothby, in an otherwise excellent speech, made slighting references to the Australian and New Zealand Navies. [14] This point did not receive any publicity in the press so I wrote to Boothby and received from him a reply, a copy of which I enclose.

EMPIRE PARLIAMENTARY DELEGATION

I suggested to Mr. Amery that it would be very desirable for the Parliamentary Delegation about to visit Australia if its Members could receive sound information about the coming activities of the Empire Marketing Board. As a result, Mr. Amery asked Mr. Ormsby- Gore M.P., Major Elliot M.P. and myself, to meet the Delegation and to describe the present and contemplated work of the Board.

This meeting occurred last Monday week and was quite successful. I was asked to open the discussion, which I did very briefly and was followed by Ormsby-Gore, who gave an excellent general account of the constitution of the Empire Marketing Board and of its proposed publicity work and then Major Elliot gave a similar short discussion on its research work.

I have also arranged that the Secretary of the Empire Marketing Board should prepare a statement for the Members of the Delegation so that they will have something from which they can talk when in Australia.

I have also made a point of meeting a number of the delegates and discussing their trip with them and giving them useful information about the aspects of Australian economic life in which they are personally interested.

AGRICULTURAL DINNER

Mr. F. N. Blundell [15] M.P. asked me yesterday to remind you next time I was writing about this dinner on the 9th December and just to state that an official invitation to you had been sent to the High Commissioner [16] and that the Governing Body, of which he was Chairman, was extremely anxious to have you as their guest.

It is a good number of months since I heard from you and at the moment I have no idea whether you desire me to be officially connected with the Australian Delegation to the Imperial Conference. I should, of course, be glad to know somewhat in advance any plans that you may have in this direction if only for the reason that being forewarned is to some extent being forearmed.

I am eagerly looking forward to the opportunity of discussing a number of problems with you.

In conclusion I hope that both Mrs. Bruce and yourself will have a pleasant and restful trip and that your visit to England may be

even more successful than in 1923.

Yours sincerely, F. L. MCDOUGALL

1 Sir Halford Mackinder.

2 W. A. Wilson.

3 W. H. Clifford, General Manager of the North Coast Co-operative Company Ltd, N.S.W.; representative of the Co-operative Butter and Cheese Factories on the Australian Dairy Produce Control Board;

Australian representative on the Imperial Economic Committee.

4 H. Broadley.

5 S. G. Tallents, formerly Imperial Secretary, Northern Ireland.

6 See Letter 80. Elliot was Chairman of the Research Committee of the Empire Marketing Board.

7 Conservative M.P.; stockbroker and company director. He asked whether the forthcoming Imperial Conference might consider suspension for three years of the Trustee Act 1900, as regards Dominion loans, since the British Government's large conversion loans would fall due in that period. This Act permitted Dominion governments to borrow at the low rates of interest demanded for trustee securities. Its suspension would thus oblige Dominion governments to pay higher interest rates. Anthony Eden, Conservative M.P., interjected that 'this suggestion might have a very injurious effect on future Empire development generally'. See House of Commons, Parliamentary Debates, fifth series, vol. 198,

cols 1674-5 8 William Ormsby-Gore, Parliamentary Under-Secretary for the Colonies; Vice-Chairman of the Empire Marketing Board.

9 Chancellor of the Exchequer.

10 See note 7. Leopold Amery, Secretary for the Colonies and for Dominion Affairs, immediately responded 'Certainly not'.

11 J. H. Thomas, Colonial Secretary 1924, asked Amery to emphasise that the suggestion had not come from the Labour Party, to which Amery replied that he would be 'very glad to credit the Labour Party with that'.

12 Tom Johnston, Scottish Labour M.P.; editor of Forward, a Glasgow labour paper. See House of Commons, Parliamentary Debates, fifth series, vol. 198, cols 2420-5.

13 R. J. G. Boothby, Parliamentary Private Secretary to the Chancellor of the Exchequer. See House of Commons, Parliamentary Debates, fifth series, vol. 198, cols 2425-32.

14 'The Australian Navy and New Zealand Navy, as such, are not the slightest use; they make no sort of adequate grant to the British Exchequer in proportion to the amount of safety they receive.' 15 Conservative M.P.; President of the Central and Associated Chambers of Agriculture.

16 Sir Joseph Cook.