177

28th February, 1929

PERSONAL AND CONFIDENTIAL

(Due to arrive Canberra 29.3.29)

My dear P.M.,

I was very pleased to get your many letters written in the middle of January. [1]

I appreciate what you say about Ryan. [2] It is possible he may go out to Australia on a trip in any event. I will know about this in about a fortnight, and if he decides to go, I will telegraph you suggesting that you postpone a decision in the matter until you have seen and talked to him. If he does go as a private individual, I will see that he carries official letters of introduction from Mr. Amery [3] and possibly from Sir Austen Chamberlain [4] that would accredit him to you and formally state his experience and qualifications for the work of the type that you have in mind.

I will certainly look forward with the greatest pleasure to getting periodical letters on what is going on in Australia behind the scenes. This has been rather a disability in the past and it has meant a lot of dull reading of press cuttings to try and reconstruct in one's mind what is happening. [5]

I have read the Economic Mission's Report [6] and am to see Sir Hugo Hirst [7] tomorrow. Generally speaking the impression that the report gives one is that they do not think we have been very clever with our nation planning in the past.

Their remarks about 15% to 20% of loans raised in England being absorbed through our Tariff as Revenue is a new point to me, and seems a real one. I cannot believe, however, that such a fundamental point has escaped the Commonwealth Treasury.

I hope that the necessity for economy in public expenditure, especially as regards new developmental railway construction, will give a fillip to Australian interest in the development of the 100-ton tracked train. As I have said, I look on this as a most important potential help to us in the back country districts and in North Australia.

Would it not be possible to maintain some sort of connection between Australia and the personnel of the Big Four [8] now that they are back in England? They have been intensively cultivated in Australian affairs, and presumably have a good taste in their mouths. Would it not be a good thing to try and maintain their interest in Australian affairs so that they could be used as a sort of informal consultative body? Possibly this could be regularised by asking one or two of them to become directors of the Commonwealth Bank in London, should you decide to create an effective Board here. Now that we have got our claws into men of this type on this side, it seems a pity to let their interest evaporate.

In case McDougall [9] does not tell you the story-He met one of the ladies of the Big Four yesterday who was most enthusiastic about everything and everybody Australian, except-rather reluctantly-she found the 'smart set' in Melbourne and Sydney exceedingly trying!

I sent Alexander Shaw [10] (P. & O.) a collection of Australian press cuttings on the shipping freights question. In his note in reply he says:-

I had a few words with one of the most important of the shipowners in the Australian trade yesterday, and found that he takes a somewhat gloomy view of the future of shipping to Australia if what he calls the 'political element' interferes with ordinary economic factors. I pointed out to him that the circumstances of the present case were exceptional, and that the hostile attitude of a large part of the Australian public and Press towards shipowners, founded, as it must be, upon an entire misconception of the situation, formed a most important element which we must all consider very seriously; and that the best way to turn darkness into light, and hostility into understanding was by pursuing the course which Mr. Bruce had recommended at the present critical time.

I enclose copy of an interesting circular with regard to British taxation of Dominion visitors, issued by the Inland Revenue authorities in this last week. It is short, authoritative and easily understood. I have sent a copy to Australia House and possibly it may also be of interest to your Treasury Department.

As I have peevishly reiterated in the past, it appears to me evident that Sir Esme Howard is too old and too lacking in ability to be other than rather a nuisance as British Ambassador at Washington. He is obsessed to the exclusion of almost everything else with the question of Belligerent Rights and draws pictures of the intense domestic interest in the U.S. on this subject, which even the Foreign Office are beginning to suspect are too highly coloured. He writes Chamberlain weekly personal letters on the subject-and of great length.

In conversation with Lord Thomson (Secretary of State for Air in the late Labour Government) lately, I asked him what he was going to do if his party had to form a Government. He said that he wasn't sure whether they would want him to go back to Air-or to go abroad. I did not press this other than to say that I thought the latter would be congenial to him as he already knew the country well!-meaning to infer that he meant the United States, where he goes each year to lecture. He smiled but wouldn't say any more-but I should think it probable that he has Washington in mind. He is a great friend of Ramsay MacDonald [11] and is quite able, although I do not think he is ambassadorial timber.

Hankey [12] thinks that H.A.L. Fisher [13] would be the man for Washington-as a man of the type of Lord Bryce. [14] I have also heard Eric Drummond [15] spoken of. [16]

The Radium Sub-Committee of the Committee of Civil Research has been at work for six months and has analysed the position. They started from the standpoint that increased supplies of cheaper radium were essential for medical treatment. The result of the enquiry seems to be that there are but faint hopes that the Empire (so far as it has been prospected) holds any radium supplies of any importance at all. Of a very poor lot, the Mount Painter and Radium Hill deposits in South Australia show some mild promise, but are very low grade. The recommendations of the Radium Sub- Committee are mainly directed towards the provision of a central Government-controlled supply of Radium, from which the needs of hospitals and institutions would be met by temporary loan. This central body would be run by a Board of Trustees on which the Government and the medical profession would be represented.

The Radium Report is still in draft form and liable to alteration.

I will send you copy of the final report.

A scheme is being hatched very much behind the scenes to organise a strong Industrial Mission to the Argentine, and possibly other South American Republics, as a counterblast to Hoover's [17] progress in South America. After Hoover's long interview with Irigoyen, the new President of the Argentine (a Liberal dictator of great strength), Sir Malcolm Robertson, British Ambassador at Buenos Aires, was privately acquainted by a confidant of the President with the gist of the interview. It appears that Hoover painted a rosy picture of the increasing degree to which the U.S.

would take Argentine products (mainly meat) in the coming years, and generally made a strong plea for reciprocity. Irigoyen was courteous, but does not desire to become too closely dependent on American trade. He wants British trade to maintain at least its proportion of Argentine business, and I understand that the proposal for the visit of a British business delegation actually originated with Irigoyen. It was at first thought that Lord Melchett [18] would be the best man to lead such a Mission but opinion has swung round to D'Abernon [19], who, I understand, is being approached.

Both Admiral Sir Charles E. Madden [20] and Sir Hugh Trenchard [21]two out of the three Chiefs of Staff-are due to retire on 21st December, 1929. As it would obviously mean a break in the continuity, Hankey is trying to arrange that Madden stays on for another three months. Madden's successor will be chosen from Admiral Sir Osmond de Beauvoir Brock [22], Admiral Sir Frederick L. Field [23] and Admiral Sir Roger Keyes. [24] Churchill [25] is a friend of Keyes and is running him for the job, but I think it is generally agreed that Field is the best of the three although his health is not very good. Also Brock and Keyes are rather anti- air, whereas Field is as open-minded on the subject as a sailor can be. [26]

Hankey told me in private conversation recently that during the Peace Conference Lloyd George [27] offered him the alternative between a Baronetcy and a G.C.B.-and he chose the latter owing to the fact that he did not have any private means. Presumably he could get a baronetcy now or at some future time if he felt in need of it.

I send in another letter by this mail a summary of a Cabinet Paper on the relative 'Air' expenditures of this and other countries.

After summarising the paper, I showed it to the Air Ministry, who have no objection to it going to Australia as long as its circulation is limited and discreet. It shows how little this country is spending on Air as compared with European nations and America.

Any current estimates of Probable party strengths in the new Parliament, I think the mean would be about as follows:-

Reasonable Conservative opinion............ Conservative - 320 Labour - 240 Liberal - 60 and reasonable Opposition opinion.......... Conservative - 250 Labour - 300 Liberal - 70 The strengths in the present Parliament are:-

Conservative - 388 Labour - 157 Liberal - 42 Various - 28

Forecasting is a dangerous game but reasonable people seem to think that the strengths in the next Parliament will represent not very far from a deadlock [28]-which always carries with it the possibility of a second General Election within a comparatively short time. My reason for referring to these domestic matters is that it occurs to me that a second General Election would possibly affect the date of the next Imperial Conference.

I enclose 'Times' report of Mr. Baldwin's [29] first real electioneering speech.

I will not bother you here with Antarctic matters-other than to say that it would appear that both Byrd [30] (in claiming 'Marie Byrd Land' for the United States) and the 'Norvegia' (in claiming Peter I Island) have stolen a march on us.

I am sending you a telegram tonight hoping you will agree to make our Antarctic Expedition a two years' one. The additional expense would be small (Mawson [31] estimates �10,000 or �12,000 at most) and we would get the job done properly instead of cursorily.

Sir Austen Chamberlain is ill again but at present it is not known how seriously. If he has to leave the Foreign Office, I suppose Cushendun [32] Will fill his place again until the Election, although I do not think he would be substantively appointed by this Government if it gets back to power again. There are, of course, several who aspire to the Foreign Office, according to well-informed rumour-I have heard Hoare [33] and Eustace Percy [34] mentioned lately as being keen, but I cannot see either of them filling the job adequately. As I have said before, there is no one on the Conservative side that I can think of who is outstandingly fitted for the Foreign Office.

In measuring up candidates for this or similar Cabinet appointments, Hankey has come to use the yardstick of their 'soundness' on the question of Belligerent Rights! Cushendun is in a minority of one against our standing out for high Belligerent Rights, and for this and other reasons Hankey writes him off as a total loss.

There is increasing evidence of the determination of the United States to build up a paramount merchant marine-I have sent many instances of this in my letters-the most recent by this mail. I presume that the External Affairs Department is keeping the proper Commonwealth Department informed, so that Australian interests are not sacrificed.

The immense labours of the Belligerent Rights Sub-Committee of the Committee of Imperial Defence are coming to an end. The net result in short is that we must maintain 'high' Belligerent Rights at all costs and that we must, if possible, avoid a Conference on the subject. The attitude to be taken towards the Anglo-American Arbitration Treaty is not yet certain, as the Cabinet is divided on the subject.

I enclose 'Times' cuttings re Board of Trade estimate of a net favourable balance of trade of about �150 millions for the year.

This compares with past years as follows:-

1925 1926 1927 1928 Millions............. + �54 - �7 + �96 + �149

I submit that I am not to blame for the length of this letter. It is the direct result of your encouraging remarks.

I am, Yours sincerely, R.G. CASEY

1 With the federal elections of November 1928 behind him, Bruce after a long interval had acknowledged a batch of Casey's letters.

His letter to Casey of 18 January 1929 is on file AA:A1420.

2 Colonel Rupert Ryan, Casey's brother-in-law, and suggested by Casey as a suitable head for the External Affairs Department in Canberra; Bruce had regarded the suggestion as entirely appropriate in terms of merit but politically impossible. See Letter 164.

3 Leopold Amery, Secretary for the Colonies and for Dominion Affairs.

4 Foreign Secretary.

5 Bruce had decided that his office should keep Casey up to date with developments in Australia rather as Casey kept him up to date on developments in Britain. His letter to Casey of 18 January 1929 is on file AA:A1420.

6 See Report of the British Economic Mission to Australia in Commonwealth Parliamentary Papers, 1929 session, Vol. II, pp.

1231-72.

7 Chairman and Managing Director of the General Electric Co. Ltd, and a member of the Mission.

8 Current term for the Mission members: Sir Arthur Duckham, Sir Hugo Hirst, Sir Ernest Clark and Dougal Malcolm.

9 F.L. McDougall, Economic Adviser to the Australian High Commissioner.

10 Deputy Chairman of the P. & 0. Line. See Letter 168.

11 At the time Leader of the Opposition; he became Prime Minister after the election in May 1929.

12 Sir Maurice Hankey, Secretary to the Cabinet.

13 Liberal historian, warden of New College, Oxford; President of the Board of Education 1916-22.

14 Barrister, academic and Liberal minister, Lord Bryce had been a highly successful Ambassador to the United States 1907-13.

15 Sir Eric Drummond, Secretary-General of the League of Nations, later (as Lord Perth from 1937) Ambassador to Italy 1933-39.

16 The Washington embassy went in 1930 to Sir Ronald Lindsay, Permanent Under-Secretary at the Foreign Office.

17 Herbert Hoover, U.S. President.

18 Formerly Sir Alfred Mond, Chairman of, inter alia, Imperial Chemical Industries Ltd.

19 Lord D'Abernon, Ambassador to Germany 1920-26, now retired.

20 First Sea Lord.

21 Chief of the Air Staff.

22 Commander-in-Chief, Portsmouth Command.

23 Commander-in-Chief, Mediterranean Fleet.

24 Commander-in-Chief, Mediterranean Fleet 1925-28. He subsequently entered Parliament as a Conservative.

25 Winston Churchill, Chancellor of the Exchequer.

26 The appointment went to Field.

27 David Lloyd George, Prime Minister 1916-22.

28 In fact, at elections on 30 May 1929, Labour was returned with 288 seats, enough to allow Ramsay MacDonald to form a minority Labour Government.

29 Stanley Baldwin, Prime Minister.

30 Commander R. E. Byrd, U.S.N., leader of a United States expedition to the Antarctic.

31 Sir Douglas Mawson, leader of the British, Australian and New Zealand Antarctic Research Expedition of 1929-31. See note 13 to Letter 146.

32 Lord Cushendun, Chancellor of the Duchy of Lancaster.

33 Sir Samuel Hoare, Secretary for Air.

34 Lord Eustace Percy, President of the Board of Education.