At¹ the close of the meeting of the High Commissioners today (which forms the subject of a separate report of even date)² Mr. Walter Elliot took me on one side to say that Mr. Thomas had acquainted him with the proposal for an exchange of commodities. He said that at the moment he was compelled reluctantly to tell me that he could not see what case he could make out either to the home producer or to the external producer for taking additional cattle from the Free State. The announcement which had just been read out of the stoppage of Australian shipments, and, further, the acceptance by New Zealand of restrictions, obviously made it all the harder to increase meat imports from one particular supplier. I suggested that none of these suppliers were in the same position as An Saorstát. We could, without question, get our coal from the Continent and if he increased our quota it would be for a quid pro quo which British conditions made greatly desirable; also it might well be in complete accordance with his policy of helping his home farmer to take additional cattle from us since they would be at the end of their grass in this country in the middle of November and might not come on as early as they thought in 1935. But in any event the proposal was put to them in case they were interested. How far such a plan would fit in to their own economy they alone could say.

Mr. Elliot said the proposal was being very carefully examined in his Department and he would see me in the course of a few days.