I enclose herewith a record of a long conversation which I had
with, the, Prime Minister  on Tuesday last  with regard to
the rearmament position in Great Britain. Attached to the record
are the notes I made before my interview.  While I did not use
these notes in my conversation they were so clearly in my head
that I more or less followed them. I did not give to the Prime
Minister all the figures which appear in the Notes I gave him
rather more of them than appears from the record of the
conversation, and in every case even if I did not give him the
exact figures I gave him percentages or the proportional
relationship to other countries. This point is of importance
because the Prime Minister in no way challenged any of the figures
which I had used. This, of course, does not mean that he accepted
them all, as no doubt they were not all in his head but I am quite
clear that the position was broadly known to him and that he was
aware that it was approximately as I indicated even if not
I have no doubt that the facts will be a considerable shock to
you. They are certainly not known outside a very limited circle in
this country. The general public is under the impression that now
we have set our hand to rearmament we are rapidly making up our
deficiencies and overtaking other countries. They have, I fear, a
comfortable feeling that if the trouble can only be staved off for
another year or so that we shall then be in a position to cope
with any trouble that might arise.
The question which must inevitably arise in your mind after
reading the enclosures is what step should the Australian
Government take in the matter. My own view is that for the moment
you should do nothing. As I say in the comment at the end of the
record of my conversation with the Prime Minister, I am fairly
clear that he does now grasp the seriousness of the position and
he will probably immediately go into the matter himself. If he
does I think we may anticipate immediate results.
The position here is a very different one since the change over
from Baldwin.  In Baldwin's day everything was allowed to drift
and there was no directing mind with regard to the Government's
policy. With the advent of the new Prime Minister all this has
been changed and he is personally playing a very active part with
regard to all major questions. He has already taken a firm grip
with regard to Foreign policy and our relations with other
countries and it is the Prime Minister himself who is behind the
moves which have recently taken place in the International sphere.
Up to date with the many other preoccupations which he has had, I
do not think he has had time to take a hold of the rearmament
question. I also feel that he had not realised the seriousness of
the situation and the necessity for some accelerated action. I
think he now quite clearly appreciates the position and I
anticipate he will immediately take a hold of the problem himself.
If he does so I feel fairly happy that we shall see a very marked
improvement in the situation so far as Air Defence is concerned,
by which I mean the more rapid production of the necessary A.A.
guns and other defence requirements. This is a problem that his
practical mind is well fitted to deal with and provided I am right
in my impression that he is now alive to the necessity for action,
I would regard the Prime Minister as probably the best conceivable
person to deal with the situation.
With regard to the other equally necessary action, namely in
connection with Air Protection, I am doubtful whether the Prime
Minister is the right man to deal with the situation. To bring
about a great acceleration here will need drive, imagination and a
power of public appeal. These qualities are not the ones with
which the Prime Minister is preeminently endowed. I feel here,
however, we must wait to see what happens.
The Minister mainly responsible would be Sam Hoare, as Home
Secretary. He is tremendously ambitious and is working strenuously
to obtain for himself the succession to the Prime Ministership.
Action in connection with Air Raid precautions would afford him a
great opportunity and possibly he may take advantage of it, but
again, he has hardly the qualities which are necessary for the
The answer to the question I have put above, namely what should
the Commonwealth Government do, is, I suggest for the moment,
nothing. It is necessary to wait and see what results from my
conversation with the Prime Minister. if, however, by the time you
have received this letter, which will not be until the later part
of January owing to the necessity of my sending it by sea, there
appears to me that any useful action could be taken, either by a
direct communication from yourself, or by my seeing the Prime
Minister on your behalf, I will cable to you.
There is no need for me to stress to you how confidential and even
explosive the information is which I am sending in this letter. I
would strongly urge that you should not disclose it save to
perhaps one or two of your colleagues such as Menzies and Casey.
 In regard to the latter it is desirable that he should know
the facts as I indicated to him in one of my telephone
conversations that it appeared to me possible that Australia might
have to go even further than she has with regard to her Defence
expenditures but when telling him this I indicated that the
reasons for my view were of such a confidential character that I
could not communicate them to him over the telephone.
S. M. BRUCE