My dear P.M.,
The Cabinet yesterday briefly and tentatively considered the Anglo-American Arbitration Treaty  and the proposed American 'Universal Renunciation of War' Pact.  Chamberlain  told the Cabinet that the preliminary investigations by the Foreign Office shewed that the Renunciation of War Pact does not provide for our position in Egypt, nor does it take into account our commitments under the Covenant or under the Locarno Treaties , nor our ancient engagements to Portugal. Chamberlain considers that the peace of Europe depends more than anything else on good Anglo- French relations and then on good relations with Germany, and he holds that we must do nothing by way of any treaty with America to upset these essentials.
Chamberlain is to discuss the matter at length with the French Ambassador  this week and is also putting Sir Cecil Hurst  in touch with Fromageot, the legal adviser at the Quai d'Orsay. He is asking Stresemann  not to reply officially to the Americans until he hears from him.
Chamberlain is obviously rather perplexed.
Lord Balfour , whose reflections are always interesting and original, thinks that this Renunciation of War business would be quite possible and probably desirable in the form of a gentlemen's agreement, but as a Treaty he thinks it would always be too full of holes.
Soviet Russia is going through probably the worst financial crisis that she has experienced, caused in the main by the refusal of the peasants to be bled. Germany has decided that an economic rapprochement with Russia is, for her, essentially sound but the practical application of the principle has been found to be impossible under present conditions, by reason of the fact that arrangements for credits to Russia have merely resulted in Moscow opening its mouth wider and wider. So that Germany at the moment is closing down on Russian advances.
I sent all the 'Bowles' papers on Blockade  to Captain Bellairs, Director of Plans at the Admiralty , and have had the enclosed appreciative note from him, which is satisfactory.
George Wilkins'  polar flight is happily ended. I hope and expect that he used the aerial compass that I gave him before he started and which he said he would give back to me if he got through. He is a man I have a great regard for-a serious adventurer, a bit of a mystic, and a very stout-hearted fellow.
I am afraid that this flight will hearten him for the Antarctic flight that he has been dreaming of these last four years-from King Edward VII Land to Graham Land. The Admiralty people, to whom I introduced him two years ago, told him that it was madness-but 'mad' things are being done these days, and he knows more about the possibilities and the dangers of such a flight than the Admiralty, so I fully imagine that he will now have a run at it.
 If he decides to do so, I sincerely hope he will get the support that he wants in Australia and not have to go elsewhere to get the comparatively small financial backing necessary for a flight which, if successful, will add something to our claims for extended Antarctic suzerainty.
The defences of Singapore have again been exercising the minds of the Chiefs of Staff and the Cabinet. The following extract from a covering letter that I have written you by this mail will give you the position, shorn of detail, as it is today:
Originally the Naval Base and the Land Defences were both to have been completed by 1935, work on the Base going ahead uniformly and the construction of the Defences to have been completed in two stages, the first of which was to have been ready by 1930.
Now the Base is to be completed by 1937 and the first stage of the Defences by 1932. The first stage of the defences includes two 15"
guns and certain 9.2" and 6" guns. The armament constituting the first stage of the construction of the Defences is now determined and it is known what will be in place by 1932. The date of completion, and the detail of the actual Defences that will constitute the second and final stage, have not yet been decided.
The part that the Air Arm is to play has been mainly responsible for this state of indecision as to the final schedule of fixed land defences.
I write by this mail on the subject of Australian co-operation in Far Eastern Intelligence. Unfortunately, Colonel Blaker's  scheme, about which I wrote you from Singapore, for the establishment of a combined Far Eastern Intelligence Bureau at Singapore, has been turned down. So that the remaining possibilities for us to co-operate, and get some real first-hand knowledge of what is going on at our back door, consist in (1) putting a man into the existing small Intelligence Department in Singapore, (2) attaching a man to the Peking Legation, or (3) attaching a language officer to the Tokyo Embassy. All three are desirable enough if money were no object. I am inclined to think that a man at Singapore would be best value for us at present.
Mond  has been away or so rushed when in town that I couldn't get to see him personally, so that I haven't been able to get much inside information about his new enormous Finance Company. I send some bread and butter particulars in another letter.
I have worked out quite an interesting sheet of figures regarding the percentage of their total budgets that the countries of the world spend on armaments and defence. It would interest you to look at, I think.
It shows clearly what an economic benefit some measure of limitation of armaments would be.
Bowles is producing a shilling edition of his 'Strength of England' and is hoping for a wide circulation.  I am trying to induce him to give attention to its proper circulation in Australia, and will probably write you again later in this regard.
I send by this mail a letter giving some particulars of the interaction of the United States, Canada and Great Britain in the West Indies and the Caribbean generally. Canada has been working for years to attract West Indian trade to herself and away from the United States, with the approval of Great Britain.
There is a parallel, I think, between the position of Australia and the Western Pacific Island Groups and Canada and the West Indies. Canada has had American competition to fight whereas we have had no such spur. Canada has arranged tariff reciprocity and subsidised shipping lines with the West Indies, whereas we have, I understand, done little to ingratiate ourselves with the British island colonies at our doors.
In the course of a walk from his house to his office with Amery  yesterday, I mentioned the contents of my letter about Canada and the West Indies. He agreed that the parallel that I mention above was a good one, and went on mildly to deplore the fact that tariff preference was not universal and reciprocal throughout the Empire.
I give you the outline in another letter by this mail of the most important Civil Servants' case which resulted in an acknowledged mistake being made by the Judicial Committee of the Privy Council.
I will not repeat it here. It cannot but have a bad effect on the Dominions. Mr. Latham  will be interested in this, I expect.
By the way, in conversation with Amery recently, speaking of the proposal to amalgamate the judicial functions of the House of Lords and the Privy Council, he said that he advocated transferring the Judicial Committee of the Lords to the Privy Council, and not the reverse as I told you in a recent letter  had been suggested in some quarters. The Privy Council would remain geographically in its present location, the Judicial Committee would be strengthened, and they would hear appeals from courts both in this country and in Dominions.
I am, Yours sincerely, R.G. CASEY