198

16th May, 1929

PERSONAL AND CONFIDENTIAL

(Due to arrive Canberra 15.6.29)

My dear P.M.,

I am almost entirely immersed in a flood of business Connected with the Antarctic Expedition. J.K. Davis [1] is a pleasant fellow but he has left all the business to me, other than that connected with the outfitting of the ship. The negotiation of the press rights alone has involved my seeing a dozen people to learn my way about through the pitfalls.

I send another letter by this mail on Reparations. A good, brief summary of the position up to February of this year is given in the R.I.I.A. Journal for May, in the form of an address by the Hon. R. H. Brand. [2] This is on file in the External Affairs Department.

The practical position, as I see it, is as follows.

Apart from the inhuman proposal of Owen Young [3] that Great Britain should forego some part of her share under the Spa percentages [4], it appears to me that there has been rather an academic atmosphere about the Experts' meetings.

Until a year ago, America was lending money to Germany at a rate greater than Germany's reparation payments under the Dawes Plan.

[5] Hence no exchange difficulties with regard to transfers were met. American money practically ceased to enter Germany about a year ago, and Germany has had, in consequence, to export gold and to raise her Bank rate, and the mark began to tremble until outside support was sought.

No solution to the great difficulties of transfer, according to the people with whom I have talked, has yet been proposed, unless the functions of the proposed International Bank are to achieve this in some hitherto unknown manner.

The reason for the slackening off (and eventually practically ceasing) of American loan money to Germany is a matter for conjecture. It is probably a combination of domestic American reasons due to high money rates in New York, together with a certain uneasiness on the part of the United States as to the German position.

The letters and papers of Sir Joseph Banks, connected with the very early days in Australia, were sold for over 7,000 at Sotheby's this week. I found that the Mitchell Library and the Commonwealth had jointly sent a representative to London for the sale and he secured practically the whole lot. I only discovered this at the last moment, as I had discussed with J. M. Niall [6] the necessity, in the interests of the Commonwealth, that he should secure them in the absence of any accredited Commonwealth buyer. He was willing to do so but I was able to 'call him off' at the last moment. It was a big price to pay and I don't know where the bidding came from as the British Museum had generously agreed not to compete. I cannot imagine any other collection of a few dozen letters of only 120 years old that would have brought such a price.

The fortuitous coincidence of the Queensland election surprise and the launching of the Commonwealth-Queensland Loan in London was fortunate. [7]

I had to speak after Dougal Malcolm [8] at a private Dining Club dinner this week, on Australia-but he spoke for 1 1/2 hours and reduced everyone to pulp. He is rather humourless, although a pleasant fellow.

The question of the simplification of departmental control over the Middle and Near East is being investigated here. It has got rather broadcast, as the Foreign Office, Colonial Office, Air Ministry and India Office all have fingers in the pie, with the result that no one quite knows the limits of responsibility of each department.

Poliakoff ('Times' Diplomatic Correspondent) came to see me this week. His contribution of the moment towards the betterment of Angle-American relations and the naval situation is that Great Britain should voluntarily give up her naval bases in the Caribbean Sea. The suggestion of giving up anything more makes one, at first thought, rather hot under the collar, but on second thoughts it isn't so bad as it sounds. I haven't had time to think about the implications or talk to anyone-but just give it to you as the brainwave of the moment.

I enclose a short but delightful series of articles in the 'Times' (6th to 10th May) by Walter Elliot [9] on the Empire, in the Kipling manner. It may not be entirely fortuitous that he takes a colonial topic at this time.

I saw a good deal of Wilkins [10] while he was here, and, to my great surprise, was able to be instrumental in getting him a virtual promise of 10,000 from the 'Discovery' Committee [11] towards the funds for his coming season's operations in the Antarctic. Before I started work on them, I should have said that there wasn't a hope of squeezing anything appreciable out of them- but they fell for the idea, and morally committed themselves in quick time. This will mean that instead of doing the long flight (2,000 miles) from Graham Land to the Ross Sea in one jump and with no support, he will now be able to have a ship in the offing to come to his aid if necessary -in other words, he is able to assure himself of another chance of life.

Even if I were not so taken up with Antarctic work, there would not be much to tell you in this period, as the impending election has paralysed everybody and very little is going on otherwise.

I am, Yours sincerely, R.G. CASEY

1 Captain J.K. Davis, second-in-command under Sir Douglas Mawson of the British, Australian and New Zealand Antarctic Research Expedition of 1929-31.

2 Managing Director of Lazard Brothers and Co., merchant bankers, and company director. In his speech Brand called for an urgent reassessment of Allied debt claims as the crisis in Germany's currency and exchange system was threatening not only the payment of reparations but also international economic stability. See Journal of the Royal Institute of International Affairs, VIII 3, 1929, pp. 203-26.

3 Leading American representative on reparations questions.

4 It was agreed at a conference at Spa (Belgium) in 1920 that the major Allies would share in German reparations: France 52%;

British Empire 22%; Italy 10%; Belgium 8%. An international committee of experts chaired by Young in 1929 proposed a complicated formula whereby France in effect would receive more than 75%, mainly at Britain's expense.

5 In 1924 a committee of experts chaired by the United States' Brig Gen Charles Dawes provided a plan whereby the Allies would tend Germany 40 million and Germany would pay reparations at specified annual rates.

6 Managing Director of Goldsbrough, Mort & Co. Ltd.

7 Labour was defeated at Queensland State elections on 11 May 1929. The London money market had been disinclined to cooperate with the mildly socialist Queensland Labour governments, especially in the early 1920s.

8 Member of the Executive Committee of Directors of the British South Africa Co. and a member of the Economic Mission which visited Australia in 1928.

9 Parliamentary Under-Secretary for Scotland.

10 Sir Hubert Wilkins, Australian polar explorer.

11 See note 13 to Letter 146.