The Imperial Conference of 1923 met in London in the autumn of 1923, the first attended by the new Irish Free State. While named the Imperial Economic Conference, the principal activity concerned the rights of the Dominions in regards to determining their own foreign policy.
Where previous Imperial Conferences were held in public session, the 1923 conference allowing for in camera discussion with a resolution "that at meetings of this nature, where questions of high policy and of the greatest consequence to all parts of the British Commonwealth are surveyed and dealt with, it was of the first importance that the representatives present should feel able to speak among themselves with the utmost freedom and in a spirit of complete confidence."
The conference occurred in the wake of several important developments in Empire diplomacy. The Chanak Crisis of 1922 was a threatened military conflict between the newly formed Republic of Turkey and the United Kingdom. During the crisis, the British cabinet issued a communiqué threatening to declare war against Turkey on behalf of the UK and the Dominions. British Prime Minister David Lloyd George had not consulted the Dominions and Canada disavowed the British ultimatum: when Canadian Prime Minister William Lyon Mackenzie King referred the issue to the Canadian parliament, it declared that it alone had the authority to declare war on behalf of Canada. The other Dominion prime ministers failed to support Lloyd George's action. When a new peace treaty, the Treaty of Lausanne, was negotiated with Turkey in 1923, the Dominion governments did not participate in the negotiations or sign and they declared that Britain acted only for itself and not on behalf of the Dominions.
In addition, prior to the Imperial Conference, Canada negotiated the Halibut Treaty with the United States and did so without involving the United Kingdom or allowing the British government to sign on Canada's behalf. This was a departure from earlier practice in which Britain had sole responsible for Imperial foreign affairs and a constitutional right to conduct foreign policy on behalf of the dominions, including signing treaties on their behalf.
The British, Australian, and New Zealand governments wished the conference to adopt a broad common foreign policy statement however Canadian Prime Minister William Lyon Mackenzie King and South African Prime Minister J. B. M. Hertzog argued that allowing the conference to make decisions that were binding on the dominions would encroach on their autonomy and that foreign policy of each Dominion should be determined by that Dominion's parliament (henceforth referred to as the King-Hertzog principle).
The Conference affirmed the Canadian position that dominions had the right to pursue their own foreign policy autonomously from Britain and the Empire and could negotiate and sign treaties on their own behalf. It was also recognised that each member of the Empire was obliged to avoid taking any action that would injure another member and that neither the Dominion governments nor the British government could commit another to an action without its consent.
The conference's final report affirmed the Canadian and South African position and thus was a step away from the concept of a centralised British Empire in favour of a more decentralised British Commonwealth of Nations without central authority, subsequently affirmed by the Balfour Declaration of 1926 and the Statute of Westminster 1931.
On the issue of trade, Australian prime minister Stanley Bruce lobbied hard and consistently for the Conservative government of Stanley Baldwin to make changes to Great Britain's trading arrangements to give preference to Dominion products over imports from elsewhere. Bruce argued for Empire-wide economic trading arrangements that would see domestic demands filled by production from member states before seeking supplemental imports from other countries and empires. Baldwin and the Conservatives would attempt to introduce such a scheme in Britain; however, the British public feared higher prices for basic products (particularly food), and this fear was a factor in the Conservative government's defeat in the election of December 1923. Baldwin's successor Ramsay MacDonald repudiated the plan and it would not see fruition until the British Empire Economic Conference of 1932.
The conference attempted to coordinate industrial research for the purposes of promoting intra-empire trade and this was largely successful, with Departments of Scientific and Industrial Research being founded in the UK, New Zealand and India, and the Commonwealth Institute of Science and Industry being restructured in Australia.