46

7th January, 1926

CONFIDENTIAL

(Due to arrive Melbourne-6.2.26)

My dear P.M.,

I would like to draw your attention to a despatch from Berlin (C.15928/459/18) that I send by this mail. It is of no immediate importance, but is an interesting and penetrating analysis of the German mentality by Addison [1], who is Counsellor at our Berlin Embassy under D'Abernon. [2] You will find it a good print to enclose in your week-end batch. Addison is one of the Cinderellas of the Diplomatic Service, in that he is apparently under a cloud for some reason. He is spoken of as one of the people who are very clever, rather shamefaced and bedraggled in appearance, and who never get beyond a certain stage in their careers. But he can write, as you will admit, a very polished despatch when he likes.

2. I spent my Chrismas leave by having two days in Paris, six in Coblenz, and a day each in Cologne and Essen. At Coblenz, I stayed with Rupert Ryan (son of Sir Charles Ryan) who is Deputy Commissioner of the Rhineland High Commission and an old friend of mine. [3]

Germany is apparently going through a very bad time industrially, as a reaction after her inflation and subsequent deflation. All her industries (except those few with a flourishing export trade, such as the electrical manufacturing industry) are short of money and are finding difficulty in financing their activities, let alone providing long-term credits. Even such hugh concerns as Krupp's (which I visited) and the Badische Analin Fabrik are very hard hit. Credit is available only at absurd rates such as 10-14 per cent. First mortgages bring similar returns. I understand that very little English or American money is coming into the country even with baits like this to attract it, as the conditions of taxation are stringent and there is no fluidity-i.e. if you foreclose you have the collateral security on your hands and no ready market for it. I was told on good authority that a widespread financial reconstruction and writing down will have to take place in German industry before long, together with the introduction of more attractive conditions for the entry of foreign capital.

3. I am addressing a re-cyphered despatch to you by this mail on a subject of great secrecy and, I think, importance. The subject is rather an unsavoury one, but I don't think we can afford to let any opportunity go by that promises to throw light on certain activities.

4. I would draw attention to Amery's [4] paper (which I enclose with another letter by this mail) on the next Imperial Conference.

5. It looks as if the Imperial Conference was destined to be in October, as I am telegraphing you today. It is just humanly possible that the Preparatory Disarmament Commission of the League may have got far enough ahead with its work to justify the Disarmament Conference being held before the end of 1926. This is pure surmise; the F.O. can't even guess if the Disarmament Conference will take place in six months' time-or at all. But it would be a very well worth while trip for you if you could combine an Imperial Conference, League Assembly and the Disarmament Conference.

America's probable participation in the meeting of the Preparatory Disarmament Commission at Geneva in February is a surprise to people here. It has become the thing to say that opinion in America is swinging round towards greater sympathy with Europe in this last six months. Personally I think that any slight alteration in the American outlook as regards Europe is explained by Belgium and Italy having fixed up their debts-coupled possibly with Locarno.

6. I met Gordon Canning [5] in London about six months ago. He has come into the limelight lately owing to his having been the vehicle and mouthpiece for Abd el Krim's 'peace' terms to the French. [6] He has a shifty eye and is, I think, not altogether a disinterested peacemaker. At a small Group meeting at the British Institute of International Affairs, I saw a very heated exchange of words about Morocco between Canning and Sir Malcolm Robertson [7], who had just come back from being H.M.'s diplomatic representative at Tangier. Canning combines journalism with gentlemanly adventure-he hasn't any major virtues or vices to recommend him, probably a reasonable mental equipment, certainly not an outstanding fellow.

7. Beaverbrook's [8] small book 'Politicians and the Press' was published at Christmas. The numerous reviews echoed one's own impression that he very much over-rates the political importance and influence of the Daily Express. The Punch comic review of it is quite entertaining, after you have read or looked through the book itself.

I am, Yours sincerely, R. G. CASEY

1 Replete with French and English literary allusions, the dispatch of 14 December 1925 (in PRO:FO371/10747) assured Chamberlain of majority German support for Locarno, observing that 'it [should] be a subject of congratulation and some surprise that the major part of the nation should be found on the side of common sense'.

Joseph Addison was appointed Minister to Latvia in 1927, Minister to Czechoslovakia in 1930 and was promoted K.C.M.G. in 1933.

2 Lord D'Abernon, Ambassador to Germany 1920-26.

3 See notes 10 and 11 to Letter 34.

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

5 Captain R. Gordon Canning acted as a private individual and not on behalf of the British Government, and was accused by the French press of working for personal profit, though this was never substantiated.

6 In 1921 Abd el Krim, a Riff chieftain, had defeated Spanish forces at Anual in Spanish Morocco. Subsequently he came into conflict with French forces pushing into the Riff of French Morocco and it was only when Marshal Petain was sent to take command that in 1926 he was defeated by a joint Franco-Spanish campaign.

7 British Agent and Consul-General at Tangiers 1901-25. In 1925 he went to Argentina as Minister, becoming Ambassador in 1927.

8 Lord Beaverbrook, proprietor of the Daily Express, the Sunday Express and the Evening Standard. His book was Politicians and the Press, Hutchinson, London, 1925.