(Due to arrive Canberra 21.12.28)

My Dear P.M.,

I had half-an-hour with Sir Eric Geddes [1] today. He leaves here
on the 'Chitral' arriving at Adelaide on 2nd February, on Dunlop
Company business, and leaves Melbourne again on 12th February-a
bare nine days. Imperial Airways have asked him to retain the
Chairmanship of the Company until after his return from Australia
so that he can be in a position to discuss the projected extension
of the air route right through to Australia. He very much wants to
meet you and discuss with you, in particular, the last leg of the
air route from Singapore to Darwin. I advised him to write to you
(through me if he wished) in advance telling you where they stand
and what they propose, so that you could discuss it with your air
advisers and possibly with Cabinet prior to his arrival. This he
will do.

He hopes very much that you may find yourself in Melbourne while
he is there, as his time in Melbourne is limited to a week and the
main purpose of his visit is Dunlop's business. But if you find it
is impossible to be in Melbourne, he would, if necessary, go to
Canberra to meet you. I would suggest that, if you want to see
him, you should have a telegram sent to him to the ship at
Fremantle, telling him what is possible as regards your meeting.

The Vice-Chairman of Imperial Airways is in India, Burma and Malay
States now negotiating for the extension of the service to
Singapore-so they mean business.

Sir Eric tells me that they have great hopes of being able to pay
their way and make a profit within ten years.

He asked me if I had any indication of how you would look at the
problem, to which I answered that I knew he would find you
'airminded'. He asked if you were likely to consider a subsidy for
the route Singapore-Darwin for fast mails, but I said I had no
indication of your mind in that regard.

He has met you years ago, so he says. He is very stout and, I
should think, not a very good traveller. He talks, rather
curiously, with a slight American accent-but that may be the
result of his very recent visit to America! [2]

I see Sir Alan Anderson of the Orient Company [3] from time to
time. I went with him lately to a lecture on 'Air Transport' by
Major Mayo (technical adviser to Imperial Airways), and we all
dined together afterwards and discussed air matters. Anderson has
since written to me to say that his Company is becoming
increasingly interested in air transport and is beginning to feel
that the time is coming when they should do something about it-and
asking for ideas. He says that since Lord Inchcape's [4]
daughter's death trying to cross the Atlantic by air, he can't get
Inchcape to take any interest in air matters, whereas before the
accident he was quite amenable.

I don't quite see at the moment how the Orient Company can come
into the picture as Imperial Airways have in mind the completion
of the route London-Australia. However, I am getting Brearley [5]
(West Australian Airways) to meet Anderson at lunch and get the
latter a little closer to the realities of the business. At
present he is rather fired with the possibilities of the air
without really knowing anything about it.

When talking to individuals of any one of the Fighting Services
with regard to Coast Defence, I find that one has to listen to a
good deal of controversial matter before getting down to bedrock-
always preceded by the gratuitious statement that, of course, they
are on perfectly good terms with the others! The Services are
still very much at odds on such matters as Coast Defence and spend
a great deal of time in controverting each other's claims.

I don't know if I was wise at this long range to write last week
such a letter as the one with which I accompanied the Chiefs of
Staff Annual Review of Imperial Defence-and I only hope it will be
read as a conjecture, and to acquaint you (and possibly Defence)
with some of the adumbrations that are going on in intelligent
minds on this important subject.

I think I would be inclined to bring matters to a head by asking
H.M.G. officially, say in a year's time, for their advice in the
matter of Australian Coast Defence, i.e. a revision of C.I.D. 249-
C of 1925. This should enable the problem to be thoroughly worked
out before the Imperial Conference in 1930. I have suggested this
to Hankey [6] and he agrees that it would be a satisfactory
procedure.

I was interested to note the tone of comparative restraint in the
secret Part 2 of Salmond's report on the employment of the
R.A.A.F. in Commonwealth Defence. [7] Of course the dyed-in-the-
wool Admiralty criticism will be that the defence of Australia
lies in the defence of her trade routes and that, consequently,
the bulk of the available money should go into naval preparations.

My impression is that Salmond's visit has been a good thing. It
has shown you just where the Air Force stands, has exposed the
weaknesses and proposed remedies-and, moreover, will provide a
moral backing for Williams [8] that will go some way towards over
coming the weight of the two older and heavier Services. I see you
have approved the first three years' programme. If you eventually
swallow the rest you will be spending a much greater proportion on
Air as compared with Navy than is the case in this country.

Australia's coast defence problem is one peculiar to itself and
will have to be worked out on its own merits and not altogether by
deduction from what is accepted elsewhere.

Solution of Singapore Defence is not by any means the solution for
Australia-I mean as regards the relative responsibilities of air
and big guns. The quality and quantity of our coast defence will
be determined by the probable scale of attack, the remoteness of
our potential enemy's bases, and the possibility of rapid air
reinforcement of threatened areas.

I send you record of an interesting and, I think, useful
conversation with Dr. Mill [9] (an eminent Antarctic authority) on
the objects of any future Australian Antarctic expedition-other
than political.

The most important thing this week is the unfortunate fact that
you will have to decide in a bare three weeks whether you want the
'Discovery' or not. [10] I regret this urgency but there is
apparently no way out of it, as if you want the 'Discovery', they
will have to build another ship for themselves, as they can't find
a suitable ship to charter for the period during which you may
want the 'Discovery'. Every week after December 12th that you
delay replying as to whether you want the 'Discovery' or not,
means a week off the working season 1929/30 as far as the new ship
is concerned, as there is just time to get her built, equipped and
down to the southern ice by the start of the 1929/30 Antarctic
summer.

Affairs in the Persian Gulf and adjacent areas are preoccupying
people a good deal lately. Persia is going through one of the
waves of anti-British self-assertion that sweep over her from time
to time, and much thought has been given to just how to cope with
her and maintain ourselves in the Gulf. I have sent a lot of
papers out to you lately in this regard. I send this week papers
relating to a struggle on Trenchard's [11] part to get more power
for the Air in the Middle East. He is a wonderful fighter for his
own side and they will miss him, in spite of his shortcomings,
when he goes next year.

De-rating is causing a good deal of grief in the Conservative
Party. According to the best information I can get, it is a big
forward move in public administration, but it entails drastic
changes in the way things have been done for generations, and that
is never popular in this country. It helps some districts and it
imposes burdens on others-and a great wail is arising from the
latter. Neville Chamberlain (Minister of Health) is piloting the
Bill-I could not understand why until Tom Jones [12] explained to
me that the Ministry of Health evolved out of the Local Government
Board.

De-rating is not very popular in the Conservative Party as it is
not a good electioneering gambit, owing to its complicated nature
and the fact that it is hard to make out a simple case for the
benefits that will accrue.

The big bone in the throat of the Government is still
unemployment. They have found no solution and it is obvious to
everyone that they have only panaceas to put forward. Great play
will be made of the 1 1/4 million unemployed by the Opposition in
the coming election. But neither the Liberals nor Labour have any
constructive proposals-because, I think, the problem is as near
insoluble as can be, other than by a sudden and unexplained wave
of prosperity sweeping over the country.

Reform of the House of Lords is dead. The Prime Minister [13]
resists all attempts on the part of his own party to bring it up.

Lord Selborne [14] and quite a number of Conservatives are very
anxious to do something to forestall what they predict would
happen to the Lords in the hands of the Labour Party-but they
can't agree on what reforms are necessary and practical. Baldwin
doesn't want to touch it and, when faced with his promise to deal
with it, says that you can't get a quart into a pint pot and that
there isn't time in the remainder of the life of this Parliament.

I have seen something of Norman Angell lately, who wrote 'The
Great Illusion' before the war. [15] He has evolved a most
interesting card game which is designed to inculcate the basic
principles of economics and finance. [16] I have got together a
group of well diversified people to play it. We have met at lunch
and dinner at my house, have a quick meal and play afterwards for
an hour or so. The group consists of Norman Angell, Professor
Gregory [17] (Professor of Economics, London School of Economics),
a banker, a stockbroker, Tom Jones and Grigg [18] (Winston's [19]
Secretary). When I know more about it, I will send you the game,
which would interest you a good deal if you had time to play it,
which I doubt.

I enclose a 'Times' cutting of interest regarding South Africa.

Also a leading article from the 'Times' with regard to the
elections.

In conversation with Sir Ronald Lindsay [20] (Foreign Office)
today, he brought up the question of the training of men from the
Dominions for diplomatic work. The idea was discussed of getting a
man from the Australian External Affairs Department into the
Foreign Office for training for a year, followed by a year at an
Embassy abroad. He wants to think it over before proposing such a
scheme to us, even unofficially.

I am, Yours sincerely,
R.G. CASEY