My dear Prime Minister,

SIR HUGO HIRST [1]

Yesterday I saw Sir Hugo Hirst and had quite an interesting talk.

Everything connected with the Business Mission convinces me that
your move in arranging for its occurrence was a really brilliant
one and one which may be expected to lead to the very substantial
advantage of Australia for a number of years.

I was very delighted to hear from Hirst that you had asked the
Mission to keep together and meet from time to time so as to form
a nucleus for the discussion of problems connected with Australian
development between now and the coming Imperial Conference.

Hirst is, of course, greatly absorbed by his controversy with his
American shareholders [2] but his enthusiasm about things
'Australian' is obviously very great.

Duckham [3] has not yet returned but is expected back during the
weekend.

EMPIRE MARKETING BOARD

My address to the Imperial Affairs Committee of the Conservatives,
which I referred to in my letter of the 27th February [4], was
postponed until last Thursday. I enclose a copy of a paper which I
circulated to members present. The discussion which occurred was
very keen and I was especially asked by several members and by
Amery [5], who was in the Chair, to prepare a short statement as
to the importance of Empire markets to British trade for the year
1928. I was asked to make this very brief and just in the form of
a series of striking points which could be used by speakers. I
enclose a copy of this statement, of which I am sending copies to
all the Members of Parliament that I know, irrespective of Party.

I think you will agree that the table on page 3 would afford
speakers a series of effective points.

After the meeting, Amery detained me for a while and told me that
he had in mind the possibility of getting the Cabinet to agree to
a proposal that the Empire Marketing Board should, in addition to
the 1,000,000 a year grant, definitely be associated with a
scheme for the research and publicity throughout the Empire on
behalf of Empire manufactured goods, for which the British
Government should make available to the Board an additional sum of
somewhere between 1,000,000 and 2,000,000 a year. He further
said that he wanted to get a promise from the Cabinet to make
available another 2,000,000 a year for what he described as
Colonial developmental purposes, the money to be used for meeting
part of the interest charges on development loans for the
Colonies.

I said to Amery that I assumed that what he had in mind was
proposals which would be considered at the Imperial Conference. He
said that what he really had in mind was some immediate promise by
the Government to enlarge the scope of the Empire Marketing Board
in these directions if returned to power after the Elections.

We did not have time for any long discussion of these ideas. I
should rather doubt the political wisdom of an eleventh hour
promise by the Government to do more in this direction when they
have done so little for Empire development during the last four
years, apart from the work that has been done through the E.M.B.,
which is, of course, considerable. I am also more than doubtful
whether Amery will succeed in obtaining his colleagues' consent to
a proposal of this sort.

SIR EDWARD HILTON YOUNG [6]

Last night Hilton Young addressed in the House of Commons the
Compatriots Club, of which I am a member, on his East Africa
report. [7] He spoke extremely well and once again confirmed to my
mind the impression of his marked ability.

As I think you know, he is one of the men in the House of Commons
who is intensely keen about Empire matters. I had a short talk
with him afterwards about the next Imperial Conference and we
agreed that, as soon as the Election is over, we should spend a
couple of hours together really going into some of the economic
questions. Baldwin [8] is supposed to have a very high regard for
Hilton Young and it occurred to me that, through Hilton Young, one
might do a good deal of useful preparatory work. [9]

LLOYD GEORGE [10] AND THE ELECTION

You will have seen from the cables that Lloyd George made a
sensational speech in which he promised that, if returned to
power, he would reduce unemployment to normal proportions in a
single year without adding one penny to national or local
taxation. [11] Following this speech, a pamphlet has been issued
by the Liberal Party indicating the action which the Liberal Party
would take to make good this pledge. I enclose a copy of the
pamphlet. I think the general feeling is as follows:-

Firstly that Lloyd George was perfectly safe in making the pledge
because by no conceivable chance can the Liberals obtain power as
a result of the Election and, secondly, that the pledge might have
been a very effective electoral asset if it had been made about a
month before the Election but that the scheme is open to such
serious and obvious criticism that, having been made ten weeks
before the Election, it will, by the time the Election occurs, be
so heavily discounted as to cease to be an asset of any
appreciable value. It remains, however, true that Lloyd George's
strong intervention has sensibly heightened public interest in the
Election campaign. It is a thousand Pines that Lloyd George, with
his dynamic forces and executive ability, is not championing the
cause of Empire development, especially as I understand that he is
really quite keen about it but that he feels that to play that
card would quite definitely be to play the Tory game. If there is
any truth in the well founded rumour that Lloyd George returned to
England in the Autumn of 1923 prepared to make Empire development
the centre feature of his campaign and was merely forestalled in
doing so by Baldwin precipitating the 1923 Election issue [12], it
is perhaps one of the greatest disservices that Baldwin has done
to the Empire.

POLITICAL

This week the results of five by-elections will be published.

Henry Mond [13] has already been returned for Liverpool with a
severely reduced majority but on a very low percentage poll.

Midday today the result of the Eddisbury By-election became known-
a Liberal gain in a straight fight between a Liberal and a
Conservative. This must be regarded as an indication of increasing
Liberal voting strength and I cannot but regard it as being
somewhat sinister from a Governmental point of view.

EXTENSION OF WORK OF THE EMPIRE MARKETING BOARD

Last night in the House of Commons there occurred a brief debate
raised by Captain Cunningham Reid [14] on the extension of work of
the Empire Marketing Board. It was by no means an important debate
but Cunningham Reid's point that the scope of the Board should be
extended was supported from the Labour side. It may be worth your
while to glance through what was said. I am, therefore, enclosing
a copy of the Hansard with the portion marked.

Yours sincerely,
F. L. MCDOUGALL