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151

1st March, 1928
PERSONAL & CONFIDENTIAL


My dear Prime Minister,

BUSINESS DELEGATION

In my last letter I briefly mentioned this matter. Last Friday I
saw Lovat [1], who said that he was feeling much happier on the
subject of the Delegation and thought that there was a reasonable
prospect of his having now secured the team, which was to consist
of Sir Harry McGowan [2], Sir Hugo Hirst [3], Sir Ernest Clark [4]
and, possibly, Sir Arthur Duckham. [5] In regard to Sir Ernest
Clark, Lovat said that he had received from Lord Ashfield [6] and
also from Sir Hugo Hirst, most favorable accounts of his
competency and ability for the type of task. He told me that Sir
Ernest Clark had said that it would be rather difficult for him to
leave for a six months' tour without pay and that, when this
information came to Sir Hugo Hirst, Sir Hugo himself offered to
pay 1,000 to Sir Ernest Clark because he felt that his presence
on the Delegation would be so extremely useful. This rather
munificent offer, which I believe is characteristic of Hirst, was,
however, unnecessary because Lord Ashfield, on behalf of the
Underground Combine, promised to make such financial arrangements
with Sir Ernest Clark as to make it possible for him cheerfully to
accept.
With regard to Duckham, who is in America at the moment, Lovat
told me that he had been so strongly pressed by other members of
the Delegation to secure Duckhams's services that he had sent
several cables to Duckham urging him to accept provisionally and
stating that if, at a date nearer the actual time of departure,
Duckham found it really impossible to get away, he would undertake
to see that you thoroughly understood the reasons which might
impel Duckham to take such a decision.
Lovat told me that when the Delegation was definitely fixed, he
was going to arrange for a small private dinner at his house at
which he would like to get the members of the Delegation to meet
Todhunter [7], one of the Directors of the Imperial Chemical
Industries, and myself. He was good enough to say that he thought
that Todhunter and I could give the Delegation a better idea of
the dynamic possibilities of Australia than any other men in
London.
Lovat also told me that he intended to urge on Amery [8] that the
Prime Minister [9] himself should give instructions to Sir Warren
Fisher [10] that two of the very best available Civil Servants
should be attached to the Delegation as Secretaries.
I certainly feel that Lovat has done everything in his power to
push the idea of a Delegation to a successful conclusion and
whether he is successful or not, we are certainly somewhat in his
debt.

PRESS ARTICLES

I am enclosing a copy of an article which I contributed to the
'Times Trade Supplement' reviewing the directions of British trade
in 1927. I have illustrated this with a series of graphs somewhat
on the same basis as those which I prepared a year ago. I am quite
sure that if you have time to read this article and to study the
graphs, you will find it quite interesting. I have sent about 50
copies to Members of Parliament and have already received a number
of interesting replies. Philip Snowden [11] writes to express his
interest and surprise at the figures: Page Croft [12] to
congratulate Australia House on its broadmindedness in dealing
with the Empire as a whole rather than in exploiting one Dominion.
The Empire Marketing Board is having moo copies of this article
printed off by the 'Times' for them as a pamphlet for distribution
to lecturers employed by the Board.
I am also enclosing a copy of the 'National Review' for March, in
which you will find two articles which may interest you. The first
is one by myself entitled 'Mutual Trade', in which I have very
briefly stated the case for complementary rather than for
competitive trade. I should particularly like to draw your
attention to the reference to Disraeli's question in the House of
Commons in 1838. [13] I hope you will read this article.
The other article in the 'National Review' is by Sir George
Buchanan on Transport problems in Australia. [14] This is rather
pessimistic but I am quite sure you will like to see what he has
to say.

AUSTRALIAN FISHERIES

Following up the Fish Report of the Imperial Economic Committee, I
am finding it necessary to devote a good deal of time to fisheries
questions in order to supply the Development & Migration
Commission with the type of information that they require.
I spent Monday last at Lowestoft with Sir William Hardy [15], the
Scientist, and Moss Blundell, the Chief Inspector of Fisheries,
inspecting the British Experimental Trawler 'The George Bligh' and
discussing, in the evening, with the Ministry's Biologist and with
Hardy and Blundell the most suitable type of experimental vessel
for Australian purposes.
I am inclined to the view that if Australia is to develop a great
fishery industry, it will be necessary, having regard to the high
cost of living in Australia, to base the industry upon two
principal ideas:
firstly, the utmost economy in the use of labour, which means the
adoption of the most up-to-date fishing units equipped with labour
saving machinery for treatment of the fish; and
secondly, the complete utilisation of all parts of the fish-in
other words the development of a fishmeal industry, the extraction
of oil from the livers and intestines, and, quite probably, the
utilisation of fish skins for leather.
There is a very interesting development of what is called a super
trawler, which may be just the thing that Australia would need. It
is quite in embryo at the present time but very ingenious machines
for killing and splitting fish, for filleting and even for
skinning, are already on the market. Unfortunately, however, they
are of German origin but this, I think, cannot be helped.

CIVIL SERVANTS CASE

Casey [16] tells me that he is sending you the full 'Times'
account of the report of the Warren Fisher Committee on the
Gregory case. [17] It was an intensely interesting document which
I have no doubt you will want to read carefully. [18] I am
particularly interested in it because of the revival of the
question of the Zinoviev letter. [19] The Labour Back Benchers are
pressing extremely vigorously for a judicial enquiry into the
whole circumstances of the publication of this letter.
I imagine that Ramsay MacDonald and some of the members of the
Labour Front Bench are by no means keen that this enquiry should
take place, because under any circumstances Ramsay MacDonald
cannot figure in a very favorable light in connection with this
historic epistle.
Baldwin has promised half a Parliamentary day for this discussion
and it will be very interesting to see what happens.

CINEMATOGRAPH FILMS

I do not know to what extent you are interesting yourself on the
subject of Empire Film developments. Gepp [20] had recently asked
me to consult with Colonel Manning [21] as to the utilisation of
D. & M. films in England. This, together with work on the Empire
Marketing Board, has brought me into contact, to a certain extent,
with the Empire Film movement.
Major Glyn [22] M.P. called to see me the other day to discuss a
commercial proposition in which he is interested and he has sent
me a letter on the subject, of which I am enclosing a copy. I
shall be keeping in touch with this in order to advise Gepp.
Perhaps you would be good enough to let me know whether you desire
me to forward any of such information. [23]

BUSINESS DELEGATION (FURTHER)

I have just had lunch with Casey and he was telling me of an
interview that he had with J. H. Thomas [24], in which Thomas had
urged the importance of including a Labour Representative with the
Business Delegation. He had said that it was now rather late to
secure the right sort of man owing to the preoccupation of the
Labour Party with the next General Election. This reminded me very
forcibly of the fact that, when I first heard of the Business
Delegation at the end of the last Imperial Conference, I very
strongly urged on Gepp that the opportunity to include one really
firstclass Labour man who, on his return, would have an
educational effect on the British Labour Party, was too good to be
missed. I still feel that this is the case and that if a man who
is really influential in the Labour Party could be taken to
Australia, it would be very much to the good [25]

Yours sincerely,
F. L. MCDOUGALL

1 Lord Lovat, Parliamentary Under-Secretary at the Dominions
Office.
2 Company director; President and Deputy Chairman of Imperial
Chemical Industries Ltd.
3 Chairman and Managing Director of General Electric Company Ltd.
4 Company director; Permanent Secretary of the Treasury of
Northern Ireland 1922-25.
5 Chemical engineer prominent in the coal industry.
6 Chairman and Managing Director of the Underground Group of
Companies; a director of Imperial Chemical Industries Ltd. Clark's
directorships also included the Underground Group.
7 Benjamin Todhunter, the director responsible for Australian and
South African interests.
8 Leopold Amery, Secretary for the Colonies and for Dominion
Affairs.
9 Stanley Baldwin.
10 Permanent Secretary of the Treasury and Head of the Civil
Service.
11 Labour M.P.; free trader; Chancellor of the Exchequer 1924
12 Sir Henry Page Croft, Conservative M.P.; Chairman of the
Executive of the Empire Industries Association.
13 The National Review, vol. 151, no. 541, March 1928, pp. 85-9.
Benjamin Disraeli, Prime Minister 1868 and 1874-80, asked, 'Does
the Right Hon. Gentleman imagine that the nations of Europe will
be content to allow this country to remain the workshop of the
world?'.
14 ibid., pp. 147-54; Consulting engineer specialising in harbour
and transport work and author of 'Transport in Australia, with
Special Reference to Port and Harbour Facilities' (in Commonwealth
Parliamentary Papers 1926-27-28, V, pp. 81 ff. and 241 ff). The
account of his findings concluded with a statement that an
'amazing improvement' would take place if politicians gave a free
hand to the 'able and patriotic men of affairs in Australia'.
15 Director of Food Investigation, Department of Scientific and
Industrial Research; Fellow of Gonville and Caius College,
Cambridge.
16 R. G. Casey, Commonwealth Government's Liaison Officer in
London.
17 The Committee, set up to investigate statements affecting civil
servants mentioned in the case Ironmonger and Co. v. Dyne found
that J. D. Gregory, Assistant Under-Secretary at the Foreign
Office, had engaged in speculative transactions in foreign
currency in a manner inconsistent with his obligations as a civil
servant. Gregory was dismissed from his position in 1928.
18 Bruce considered that the obligations and standards of conduct
of civil servants, as outlined by the Warren Fisher Committee,
also applied to his own Ministers of the Crown, particularly the
necessity for them to sever all business connections. See his
letter dated 14 April on file AA:M111, 1928.
19 During the election campaign in October 1924, the Foreign
Office came into possession of a letter purported to be addressed
to the British Communist Party from Grigory Zinoviev, President of
the Comintern. It contained advice on the conduct of revolutionary
propaganda in Britain and seemed to compromise the Labour
Government's policy of improving relations with the U.S.S.R. The
then Prime Minister, Ramsay MacDonald, ordered a check on its
authenticity and a protest to the Soviet Mission in London. J. D.
Gregory, among others, signed the protest, although it was the
Permanent Under-Secretary, Sir Eyre Crowe, who ordered it and the
letter to be sent to the press for publication. They were
published four days before the General Election in which Labour
suffered heavy losses. MacDonald believed that Gregory was party
to deception in the matter, but this was never proved.
20 H. W. Gepp, Chairman of the Commonwealth Development and
Migration Commission.
21 C. H. Manning, Director of Migration and Settlement,
Commonwealth of Australia.
22 R. G. C. Glyn, Conservative M.P.
23 Bruce commented (in the letter cited in note 18) that Glyn's
letter did not impress him and that it would be a long time before
a 'great British film industry' would be established.
24 Labour M.P.; Colonial Secretary 1924.
25 Bruce replied (in the letter cited in note 18) that it was too
late to include a Labour representative and that, in any case, he
did not 'quite see how, a Labour mark would have fitted into the
picture'.





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