115

13th March, 1928

PERSONAL AND CONFIDENTIAL

My dear P.M.,

AMERICAN CAPITAL IN GREAT BRITAIN

It may interest you to know that His Majesty's Government has under consideration the problem arising out of the fact that American capital is becoming increasingly interested in the acquisition of electrical undertakings in this country.

Already a large number of electric supply companies in the southern half of England have come into the hands of the Greater London and Counties Trust Limited, which is the medium through which purchases are made on behalf of the American financial houses interested. It is also said that the General Electric Company of New York has taken over the Vickers holding in the Metropolitan-Vickers Electrical Company.

This invasion of American capital into an important public utility is causing some concern in the municipalities and the matter has come before Cabinet, through the proper channels. It will probably be referred to the Committee of Civil Research. I will write you again on this subject when it has been looked into by the latter body.

The search for outlets for American capital is apparently so intense that it is possible that something on the same lines as the above may be going on in Australia. It is for this reason that I send you this letter on a domestic question. [1]

I am, Yours very truly, R.G. CASEY

1 Bruce replied in a letter of 30 April 1928 (on file AA:A1420):

'Canada, of course, has not only been invaded, but has been conquered, and there is very little doubt that we will have a similar problem to face in Australia. The present position here, of course, is that it is so desirable that our industries should be expanded and the country developed that we cannot, at the present time, be so much concerned about the source from which the capital comes. It is true that the capital draws its dividends out of the country, but, on the other hand, the country where the capital is invested gets the greatest benefit because of the development and employment which it provides.'