92

10th February, 1927

PERSONAL & CONFIDENTIAL

My dear Prime Minister,

Yesterday I received a cable in cypher from you, of which the text read as follows:-

Please convey following as personal private message from me to Amery [1] begins: If the economic cooperation with Britain in development of Australia to be brought about and British trade in Australia maintained essential proposed visit from first class British business and financial brains should take place early as possible to consult with Government Development Commission and Leaders Commerce and Industry here. America is becoming increasingly interested in Australia and is sending constant stream first class people out here to investigate possibilities of initiating large projects with American capital and brains and also to stimulate consumption American products Australia to assist them in their problem of finding oversea markets for increased production. Unless immediate counter steps are taken it is inevitable that somewhat similar position will arise here to that existing in Canada where bulk large developments are being financed with American money and controlled by Americans. This can only be countered by visit of really first class people such as is contemplated and I strongly urge earliest possible steps should be taken-Bruce.

I immediately got in touch with Mr. Amery's Private Secretary and tried to arrange an appointment. Unfortunately the Secretary of State was so crowded with important engagements that I cannot see him until tomorrow (Friday) at 11.30 a.m. I therefore forwarded a copy of your cable to him together with a personal and confidential letter. I shall see him tomorrow and will cable you immediately after my interview.

DELEGATION TO AUSTRALIA

I have heard a number of criticisms of the idea of a delegation from this country to Australia. They are mostly based on the assumption that no man, however eminent, would be able to obtain a really useful idea of Australian problems in three or four months and would, therefore, not be in a position to offer very sound advice.

The view has been expressed to me that, under these circumstances, to despatch a delegation would be a waste of public money. It has been quite easy to immediately counter any such argument by reference to the immense importance to Great Britain of securing cooperation between this country and Australia.

Under the circumstances I regret that I was not more fully informed while you and Mr. Gepp [2] were in London just exactly what you had in your mind in reference to this delegation. Mr.

Gepp did discuss the idea with me on two or three occasions and I made one or two suggestions which he seemed to think well of but you will remember I was not present at the conference held the day before you left London between yourself and Mr. Amery in your room at Australia House and I have had no information as regards the final form which you desire this delegation to take.

When I discussed the matter with Gepp, I strongly suggested to him that any delegation despatched by the British Government to consider development and migration should include one prominent member of the Labour Party. To this idea he warmly agreed.

I further suggested that he should try to arrange with the British Government that any delegation that went to Australia should, on its return from Australia, be constituted as an Advisory Committee on Australian developmental problems and that it should meet at regular, perhaps monthy, intervals, with myself and a representative of the Oversea Settlement Committee [3] present, in order to continue to keep in touch with Australian developmental problems and to advise on any point which the D. & M. Commission might desire advice upon, To this idea Mr. Gepp also agreed.

It seems to me that if the idea of this delegation is to be given real weight and significance, it will be necessary to make it clear that it is not merely a visit to Australia for three or four months' consultation on our developmental problems but the definite first move towards the economic cooperation between Great Britain and Australia and therefore the delegates on their return should be prepared to continue to act in an advisory capacity.

I feel so confident of your agreement with this point of view that I shall make this suggestion to Mr. Amery tomorrow not, of course, as coming from you but as my own idea of the real significance of this delegation. I shall in fact try to make Mr. Amery fully realise the immense possibilities which this idea of the delegation gives to an important move in the direction of inter- Imperial economic Cooperation. [4]

Australia is today the one Dominion really ready for economic cooperation with Great Britain-the one Dominion that is in fact asking Great Britain to cooperate. If immediate action can be taken to give effect to cooperation between Great Britain and Australia during the three years that must elapse before the next imperial Conference, cooperation between Great Britain and Australia should provide an object lesson to the rest of the Empire as to the advantages of such work and this should lay the basis for a very important economic development at the next Imperial Conference.

DELEGATION FROM MOTOR MANUFACTURERS

Col. Hacking [5], the Secretary of the Society of Motor Manufacturers & Traders Ltd., called on me today to discuss the plans of the delegation. We had a useful talk and he has invited me to lunch with the other two members of the Delegation for a further discussion of points. I think that Col. Hacking is getting a pretty good grasp of the situation. I shall spare no pains to convince the delegation that they have a wonderful opportunity if they are prepared to make proper use of it. I hope that they will go to Australia fully charged with the importance of associating their plans so as to secure the fullest possible cooperation of the Commonwealth Government.

I have tried to give Hacking some idea of how to put a case in such a way as not to conflict with Australian national sentiment.

'LONDON WEEKLY'

I enclose copy of the 'London Weekly' dated 5th February, 1927.

CABLE COMMUNICATIONS

With reference to the cable which I received from you yesterday and to the method which I shall have to adopt in reply, you will of course realise that it is a somewhat delicate matter for me to cable through the ordinary Australia House channels on a subject such as this without consulting the High Commissioner. [6] The fact that you sent this message to me to be conveyed to Mr. Amery as a personal and private message shows that you did not intend me to consult the High Commissioner on the matter.

I have, therefore, seen Casey [7] and have arranged with him that in such circumstances I can use his channel of communication in order to send a cable message to you.

I would suggest that it might be convenient that, if you had in future any similar personal cables to send to me, you might use the channels of communication through Casey's office. I understand from Casey that, after he leaves, he has made arrangements whereby the channels of communication will still be open. [8]

I am naturally anxious to maintain the friendliest possible relations with the High Commissioner and to obviate anything that might disturb this.

Yours sincerely, F. L. MCDOUGALL

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

2 H. W. Gepp, Chairman of the Commonwealth Development and Migration Commission.

3 See note 14 to Letter 90.

4 In a letter to McDougall dated 20 April, Bruce agreed that the delegation was 'the first move towards an increased co-operation between Australia and Great Britain'. He thought, however, that 'it would be a mistake to attempt to lay down any basis as to what is to happen after [the delegates] return until they have actually been here'. The letter is on file AA:M111, 1927.

5 Alfred Hacking.

6 Sir Joseph Cook.

7 R. G. Casey, Commonwealth Government's Liaison Officer in London. Casey's office was located in the United Kingdom Cabinet Office and his communications did not go through Australia House.

8 Casey returned to Australia and was away from London until December 1927. From April to October his position in London was filled by Dr Walter Henderson, his opposite number in the External Affairs Branch of the Prime Minister's Department.