Confidential Report from John W. Dulanty to Joseph P. Walshe (Dublin)
(Secret and Confidential)

I have already reported on the telephone the substance of what I heard in the House of Lords on the second reading debate on the Statute of Westminster Bill. There was an extremely sparse attendance and neither the speeches for the Bill nor against it drew any applause. I had to leave the House of Lords Gallery, in order to attend the complimentary birthday dinner to the Prime Minister, before Lord Lloyd had finished his criticisms and of course before the subsequent speakers, including Lord Hailsham, but I am as usual sending copies of the official report of the debate.

My main reason for this report is to mention that I sat in the Gallery next to the Canadian Prime Minister, Mr. R.B. Bennett. He told me that the night before he had spoken both to the Marquis of Salisbury and to Lord Danesfort, and he thought that the President's letter had dispelled a good deal of their misgivings. He further informed me that Lord Londonderry had written to Lord Craigavon in the interests of the Statute of Westminster Bill, and had received from Lord Craigavon a letter which was written with the purpose of assuring the Tory Peers that he, Lord Craigavon, had no fears about the Bill. This letter Lord Londonderry had shown to a number of his fellow peers and it had had the desired effect.

I asked him whether he had any information as to the real intention of the British Government about the Dominion Preference. He replied by saying that he had been in close touch with a number of people over here and his opinion was that the Cabinet were frightened of doing anything that might affect the cost of living, but that the pressure from the enthusiastically protectionist rank and file in the House of Commons was so great that probably they would have to do something. He was not however too optimistic and he said he based this on some remarks which the Dominions Secretary had made to the High Commissioner for Canada. This conversation Mr. Thomas had already described to me. He said that Mr. Ferguson had been trying to 'jockey' him into a premature declaration. Mr. Thomas had replied that he wanted to see for himself what Canada was going to do about a number of economic matters before he gave any decision about preference. He said 'I told Ferguson that I wanted to know what they were going to do about the large quantities of American stuff that was going across the border into Canada, being held there for a short period, and shipped to Britain as Canadian, in order to get through the Dumping Regulations'. Mr. Thomas said that he and Mr. Ferguson got to rather high words about it and I suspect that Mr. Bennett's misgivings may be rather coloured by his High Commissioner's report of the conversation just mentioned.

I think it would be, nevertheless, a good plan for me to have a preliminary conversation with Mr. Thomas in order to ascertain whether there is anything sufficiently matured in the mind of the British Government, and if there is, then it might be useful for Mr. McGilligan and Mr. Hogan to have a purely informal conversation with Mr. Thomas before he makes the declaration he promised me he would try and make. The visit need not appear to be specially made for this purpose.