My dear P.M.,
I had a long conversation with Sir Hugh Trenchard  this week.
He regards his struggle with the Admiralty quite philosophically.
He doesn't think he can win any definite and dramatic battle with the Admiralty on the question of air power versus ships or fixed coast defences, as they would never admit defeat. Also the Navy are politically much more powerful than the 'upstart' Air Ministry, and the country and Parliament would never let the Navy be worsted. But he does think that he can push the Air case slowly and surely. He had a partial victory over Singapore. He has had what he refers to as a distinct victory over the defence of Aden, which has now been handed over to him in its entirety. The fact that his statement on the value of aircraft in coast defences is to be sent officially to South Africa, together with the 'routine' remarks of the Admiralty and the War Office, he regards as an advance. He thinks that the force of his remarks will be acknowledged in South Africa, even although he cannot get them admitted here.
To quote him on an important subject: 'I don't say I can replace the fleet, but I do say that I could show how Australia could be defended principally by aircraft-and I'd give a great deal to be able to demonstrate it.'
He is delighted that you have asked for a Senior Air Officer to be sent to you on a visit.  For domestic reasons it is apparently very difficult for him to spare Sir Geoffrey Salmond , Sir Edward Ellington  or Vice-Marshal Tom Webb Bowen , but he hopes that his Secretary of State  will let Sir John Salmond go. He is at present commanding the Air Defence of Great Britain, is a great name and a great figure in the Air Force, and I should think would do you as well, if not better, than the others. Hoare is away for a week but a decision will be come to on his return.
On the whole question of Air power versus ships and versus fixed gun defences, I think that there is a great deal more to be said for the Air point of view than the departmental loyalty of the Admiralty and War Office will let them admit. But it is a question that does not lend itself to convincing proof either way, in peace time, so that it necessitates the gradual and slow accumulation of experience as to what the Air are likely to be able to accomplish, in order to alter, with economic benefit, the proportion of responsibility that each of the three arms has to carry in its particular sphere.
It does not appear to be worth while staging any sort of competitive physical demonstration under peace conditions, as one side would never be convinced by the other, and it would merely lead to more undignified wrangling and argument as to how far short the demonstration was of war conditions.
We-all of us, I think-have our blind spots-inherited or preconceived ideas on which we brook no argument-mental Monroe doctrines -'Keep off or be blown off'. We illogically see red when they are questioned and we lose our sense of humour and our judgment.
However, as far as we are concerned in Australia, it would seem that we are so remote from a war in which the Empire will be engaged, and in any event so remote from anything more than raiding, that we can afford to wait at least five years before we spend much money on our coast defences. And by that time the position of Air versus the rest may be clarified a little.
Hankey  is still pursuing the question of our belligerent rights at sea. It seems now quite certain that for some reason or other Chamberlain  experienced a volte face in his opinions on this subject. Hankey himself is tending more and more to thinking that it would be a mistake to make any advances whatever on the subject to the Americans, and he thinks it possible that this point of view may prevail.
I send you in another letter this week copy of the 'Gillman' Report on the Defences of Singapore. All that you really need know about this is that Lieut.-General Sir Webb Gillman, with two other officers, was sent out to Singapore last year to review the scale of defences decided on by the Committee of Imperial Defence.
Gillman now reports that, in his opinion, the proposed scale of defence is more than is necessary: in other words, that we would be over-defending the Base if we went on with it on the C.I.D.
scale. The C.I.D. scale of defence, of course, was based on the Admiralty's assertion as to the possible scale of attack by the Japanese, and, therefore, it is really this scale of attack that Gillman criticises. The C.I.D. are to re-consider the whole matter next week and, if the Admiralty are still firm in their convictions that the Japanese may possibly risk everything in a full scale attack with warships-then, of course, the present proposed scale of defence will probably remain as it is. There is no need for you to read the document itself, as it is typically tough and dull.
Hankey lunched recently with Sir John Cadman, the Chairman of the Anglo-Persian Oil Company, and was much impressed by the enormous scale of the Company's business. They employ 17,000 men in and about their oilfields in South-Western Persia and have an office in London like a small Government Department. The real skeleton in their cupboard is the fact that their concession only has 35 years more to run, after which the whole business under the present agreement becomes the property of the Persian Government. It is an immensely valuable field and its life is far beyond the 35 years of their concession. Their policy is that they are awaiting the first really favourable opportunity, when they will make efforts to induce the Persian Government to review the agreement and give them a much longer term. Cadman confirmed what I told you recently that a wonderful oil-producing field has been discovered in Iraq.
The Anglo-Persian Company have a considerable interest in the Turkish Petroleum Company which is exploiting this area.
The arrangements for the equating of supply and demand of material in a war in which the Empire may be engaged has been a major occupation of the Committee of Imperial Defence for some years. We have a committee in Australia which is studying the subject from the Australian point of view. I send copies this mail of a most useful lecture on the subject by Major Ismay  (who deals with it on the C.I.D.) to the Imperial Defence College. It is a very dull, but important, subject. If you want to know anything about it, which I doubt, you might glance through this paper. In any event I am sure the paper will be of value to the Defence Committee that has this subject under research.
Ships' libraries are usually of the same order as ships' doctors.
Would it not be a good thing for the Commonwealth Government to ask the Professors of History and English Literature in the Universities of Sydney and Melbourne to collaborate in the production of a list of (say) 50 books to embrace all important aspects of Australian life-and then to forward this list to all the shipping companies carrying passengers to and from Australia, with the suggestion that such of these books as are not already in their ships' libraries should be added to them? Let the list include historical novels, brief histories of Australia, topical books descriptive of the life and industry of the country, as well as Government publications-the latter being supplied free of charge in suitable binders. Let the shipping companies paste inside each book a slip saying that the book is one of a series of representative Australian books selected by competent authorities under the auspices of the Commonwealth Government. Many thousands of intelligent travellers would bless you-and you would give our industries and the country a little advertisement that might well do some good.
A doctor, who is a friend of mine, tells me that the ex-Kaiser took the Voronoff treatment (grafting of monkey gland) last year.
He tells me that it has a remarkable rejuvenating effect but that the patient usually burns himself out in a very few years. New wine into old bottles.
A rather weird story comes from Budapest in this connection-of a man who underwent the Voronoff gland grafting after taking out an annuity policy with an insurance company. The company refused payment of the annuity on the ground that he had undergone an operation which had made him definitely younger than he was when he entered into the annuity contract with them. The case is being heard-the man's plea being that everyone must be expected to take advantage of every discovery tending to prolong life.
There isn't much to say about the sale of the 'Daily Telegraph' by Lord Burnham to the Berry group. I have heard it said that he wanted to divest himself of the paper so that he could with greater freedom be available for a Governor-Generalship, but I don't know that this is at all reliable. He has certainly been interesting himself more deeply in public affairs these last several years. In other quarters one hears merely that he was offered such a large sum for his paper that he couldn't refuse it.
I hear that pressure is steadily being kept on the Prince of Wales with regard to his marriage. There is some little anxiety, I believe, with regard to the amount of heart that he would find himself able to put into it-as it would, of course, be a mariage de convenance. A subsequent scandal would be almost as bad as if he had never married.
There have been no developments yet regarding the question of the coordination of intelligence in the Far East. I will let you know as soon as there is anything to say. I am not particularly impressed with the organisation of our intelligence throughout the world. The scheme is pretty thin in most places, I think.
I talked yesterday to the Director of Plans at the Admiralty. You may remember that you said to me before I left that you were rather mystified that the Admiralty had shifted their enthusiasm from Port Darwin to Albany. Captain Egerton says that this is not so as far as they are concerned. Darwin remains in their minds the essential complementary opposite number to Singapore from the naval anchorage and oiling point of view. Albany they consider only of interest from the point of view of a useful rendezvous anchorage for convoys, transports and merchant vessels in time of war.
Egerton thinks that the threatened American big naval construction programme will not eventuate to any extent. He foresees another Naval Disarmament Conference in the next few years, the agenda of which will be much more thoroughly thrashed out through diplomatic channels beforehand. He thinks that this is the way to do it-you can't discuss these big questions in public.
I have been looking for an opportunity for some time to write a personal letter to Sir William Glasgow -this occurred last week. I made mention of the controversial question of air power versus fixed coast defences and referred to the forthcoming South African Coast Defence Report. I then went on to say what the letter was really about-which was the question of my concerning myself here with Defence matters. There are, as you know, the three Australian service liaison officers here, who keep touch with the three fighting service departments.  They do not, however, except in isolated instances, see C.I.D. documents, nor really, I imagine, hear anything of the high policy of Imperial Defence. On the other hand, I see all these documents and can and do talk to Hankey, and at times the service departments, about them. The high policy of defence works in very closely with foreign policy and I consider it is part of my job to keep touch with defence to this extent. However, I don't want to tread on the toes of the Commonwealth Defence Department or of the three liaison officers in London. So I wrote to Sir William to explain to him the extent to which I deal in Defence matters.
Amongst the Communist papers going to you this week, there is a copy of a letter marked 'C', with regard to wages and conditions in the coal mining industry in Australia, that I think you should read personally, as it sums up the position authoritatively and well.
Mackenzie King  recently made a public denial of the statement that his Government were in course of negotiation with the Japanese for the mutual exchange of Legations to each other's capitals. His point-blank diplomatic lie surprised those who knew the facts and, most of all, the Japanese. He is negotiating hard to bring about the exchange of Legations but up to the present the Japanese have not shown themselves particularly keen-they demur a little on the score of expense. 
It seems to me that the establishment of direct diplomatic machinery between Canada on the one hand, and France, Japan and America on the other, cannot but alter the status of Canada vis-a- vis the Dominions Office. Is not the next move likely to be that Canada will want to talk direct to the Foreign Secretary and the Foreign Office on Foreign Affairs, and not through the interpretership of the Dominions Office? I flung this off at Tyrrell  this morning with the result that he made a grimace and asked me to lunch next week!
The American draft of the proposed renewal of the Anglo-American Arbitration Treaty goes to you amongst the Foreign Office print this mail. It is a dull document and I should not worry about it at this stage.
I am, Yours sincerely, R. G. CASEY