206

11th July, 1929

PERSONAL AND CONFIDENTIAL

(Due to arrive Canberra 10.8.29)

My dear P.M.,

As I have said, the new Government are at present rather disinclined to take anyone into their confidence. I understand that this is the general attitude with a new Government, but it is more noticeable in these people, for obvious reasons. This attitude of mind applies also to the question of their telling the Dominions what they have in mind-but they are being coached and mildly scolded by their permanent officials, and will no doubt get better.

Lord Passfield [1], Hankey [2] and one or two others lunched with me this week to meet Mr. Bavin. [3] Amongst other things Passfield told us of his meeting with Trotsky a few months ago in Constantinople. He says that Trotsky is a most cultivated and courteous man, but that he has several important 'blind spots' which render his political judgment most doctrinaire and untrustworthy. And I should say that when Passfield labels someone as doctrinaire, then one knows fairly accurately how to place him! Trotsky bases his whole conception of the future on the statement that the world revolution is inevitable. When pressed for reasons, he says that it will be preceded, and made inevitable, by an Anglo-American conflict, which will follow an early economic crisis in the United States. If you accept these premises then discussion with Trotsky is possible (and, by the way, he says, most entertaining and interesting), but he will not listen to contradictory argument on his premises.

I had an hour's talk to Bavin this week-he leaves today for Australia via America. He has had an active and useful month here during which he has seen a large number of people-Ministers, Dominions Office people, bankers, Montagu Norman [4] and Harvey [5] at the Bank, and many others. He will give you his impressions on his return-but if I may steal his thunder a little in advance, he will probably tell you that he thinks something should be done to put the case for Australian finance on a better footing in London-as regards publicity, I mean. The Financial Times publishes almost weekly some telegram from their Australian correspondent which puts our finances in a bad light, and seldom anything to relieve the gloom; and he thinks (and I agree) that we ought to do something about it.

As regards a new Governor for New South Wales, he discussed with Harding [6] (Dominions Office) the necessity of getting an ex- soldier or sailor and not a political Labour nominee.

I found myself sitting next to Solly Joel [7] at a Mansion House dinner this week. As you know he started life by selling papers and is now credited with being worth anything between five and twenty-five millions. There seems little doubt in people's minds that the foundation of his fortune was laid in illicit diamond buying-and he is now engaged in defending himself most inadequately against a charge of what amounts to fraud on the grand scale, and against his friends and associates. With this in mind I entered into a conversation with him on a naive basis, and during a long dinner we pursued the search for the truth. At an appropriate stage I submitted the point of view that the limit of controllable and desirable wealth was two to three hundred thousand pounds-with which, to my surprise, he heartily agreed, and adorned my argument with many instances. His own case, he gave me to understand, was a pitiable one-he had great wealth and was obliged to spend large sums each year (40,000 a year on maintaining a yacht which he hardly ever used, etc.) and he was in consequence continually pursued and depressed by the wrongness and unfairness of the inadequate disposal of such wealth by one individual. Beaverbrook [8] was happy when he had a few hundred thousand-now he was miserable in his wealth, and hadn't a friend.

The classic case would be known to me of Andrew Mellon [9] who lost the world in his desire to become its richest man. And so on- really quite entertaining. He drinks nothing but champagne and on enquiry I found that he considers Clicquot and Bollinger to be the only drinkable wines-1919 or 1921, with 1923 as a possible next best for the future.

So that you see that my evening wasn't wasted.

I am rather tired of 'Jim Thomas' [10] stories, which are usually started by that gentleman himself, and hinge on (a) his appearance (b) his forcible use of language or (c) his familiar manner of address to those in high places. But one short passage of arms that I heard myself the other night is just worth repeating. Lord Hailsham [11] and Thomas arrived at the same time at the Mansion House-Hailsham greeted him 'Good evening to you, my Lord Privy Seal'-to which Thomas with a grin replied-'Goo' night Duggie'.

You may not have heard the comment that is going about-that J. H.

Thomas has been given the task by Ramsay MacDonald [12] of dealing with unemployment as a means of discrediting him, and eliminating him as a possible successor to himself (MacDonald)-in that he can at best have but a partial success in bringing down the unemployment figures.

I read your speech at the Premiers' Conference with the greatest interest. Unfortunately it isn't possible to make omelettes without breaking eggs. If you are constrained to speak the truth bluntly and plainly in Canberra, it is read in London with some alarm.

As I telegraphed you yesterday (and as I write in another letter today), through a curious set of circumstances it has been made clear that Sir Hubert Murray (Administrator [13] of Papua) has been in the habit of writing letters very critical of our administration of the ex-German New Guinea Mandate to his brother, Sir Gilbert Murray [14]-who is a friend of Lord Lugard (who is on the Mandates Commission at Geneva) and who evidently passed his brother's letters to Lord Lugard as they arrived. This information came through a disgruntled man in drink, but I have checked it up through sober and reliable sources, and there is no doubt in my mind that it is the correct explanation. I am further informed that Murray in Papua has been in the habit of sending to his brother press cuttings and other information that tends to put the administration of our Mandate in a bad light. As further disclosures may make themselves apparent through this source at any time I imagine you will take steps to stop the traffic. I don't of course know if Murray in Papua authorises his brother to inform Lugard, but it is my guess that this is so, as Murray was rather uncomplimentary to Wisdom's [15] administration in conversation with me here last year. [16]

I am told that Wedgwood Benn [17] is making a very good impression on the India Office.

I enclose 'Times' article (today) on the failure of nationalised industries in Queensland.

I write on the negotiations with the Egyptians for an Anglo- Egyptian Treaty, and on the subject of Lord Lugard's information about the New Guinea Mandate, in other letters by this mail.

I feel as if I should be able to tell you more of the intentions of the Labour Government-but I really think you know as much as anybody else. The King's Speech said a little, Snowden [18] has said a little more about tariffs and preference, you know what there is to know about Russia, the Optional Clause, Egypt, Singapore, Naval reductions, Reparations-and I can find no more that is useful to say. They are reserved about their policy and it is only the pressure of events that will make it evident.

McDougall [19] will be telling you his interpretation of the Government's intentions with regard to Imperial Preference. But Snowden exposed their intentions rather enigmatically and vaguely, I thought.

I am, Yours sincerely, R.G. CASEY

1 Secretary for the Colonies and for Dominion Affairs.

2 Sir Maurice Hankey, Secretary to the Cabinet.

3 Thomas Bavin, New South Wales Premier.

4 Governor of the Bank of England.

5 Sir Ernest Harvey, Comptroller of the Bank of England.

6 Sir Edward Harding, Assistant Under-Secretary at the Dominions Office.

7 Solomon Barnato, Joel, South African mining magnate.

8 Lord Beaverbrook, proprietor of the Daily Express, the Sunday Express and the Evening Standard.

9 U.S. Secretary of the Treasury and prominent financier.

10 Lord Privy Seal and Minister of Employment, General Secretary of the National Union of Railwaymen.

11 Lord Chancellor in the previous Conservative Government.

12 Prime Minister.

13 In fact, Lieutenant-Governor.

14 Regius Professor of Greek at Oxford.

15 Lt Gen Evan Wisdom, Administrator of New Guinea.

16 It might be noted that Sir Hubert Murray had sought unsuccessfully an administrative union of Papua with New Guinea, presumably with himself as administrator. Murray regarded the mandatory administration of New Guinea as excessively exploitative, and in Rabaul Murray's Papuan administration was seen as excessively protective of indigenes. In 1923 Sir Gilbert Murray had tried to obtain a seat for his brother on the League of Nations Permanent Mandates Commission.

17 Secretary for India.

18 Philip Snowden, Chancellor of the Exchequer.

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