1. Sir George Pearce, Minister for External Affairs, to Mr J. A. Lyons, Prime Minister

Letter MELBOURNE, 26 January 1937, PERSONAL AND SECRET

Herewith I forward three copies of a memorandum that I have drafted re the proposal for a Dominions capital ship based on Singapore. I thought that perhaps you might wish to send a copy to Parkhill and Casey. [1] I have not mentioned the matter to Parkhill, but some time ago when Casey was speaking to me about the U.K. Govt proposed Defence Loan and the possibility of our sharing in it for Defence purposes, I mentioned the matter to him.

I have not dwelt on the strategic value of a capital ship at Singapore as that is so obvious from our point of view. The presence of the battle cruiser Australia with 12" guns in our waters at the outbreak of the Great War drove the German Pacific Fleet with 8" guns away from our shores.

G.F.PEARCE

I leave Melbourne for WA on Feb 3rd and will remain in WA until after the Referendum campaign is over.

G.F.P.

1 Copies of the memorandum were sent to Sir Archdale Parkhill, Minister for Defence, and R. G. Casey, Treasurer. In an undated acknowledgment of this letter, Prime Minister Lyons said that he would 'take an early opportunity of discussing this matter with them' (AA: CP 290/6, bundle 1, item 28).

Enclosure

Memorandum by Sir George Pearce, Minister for External Affairs

MELBOURNE, 26 January 1937

SECRET AND CONFIDENTIAL

In 1934 just before the visit of Sir Maurice Hankey [1] and while still Minister for Defence, I proposed to the Prime Minister that we should sound the other Dominion Governments on the proposal of a joint contribution towards a capital ship in the British Fleet, the ship to be based on Singapore.

The reasons I then set out were that in an emergency, it would take some time, probably twenty-eight days, for a capital ship or ships to reach Singapore from the Mediterranean. Furthermore, there was always the danger of the Suez being blocked at a time of emergency. But with a capital ship present at Singapore any threat in the Pacific would be considerably lessened.

On Sir Maurice Hankey coming out to Australia, I obtained the approval of the Prime Minister to sound Sir Maurice on this proposition. Sir Maurice quite approved of the strategic value of the proposal and said he had little doubt that the British Government would approve. The Prime Minister subsequently agreed that I should accompany Sir Maurice Hankey to New Zealand to discuss defence matters in general and the above proposal in particular, with the New Zealand Government.

When in Wellington, this proposal was discussed with Mr Forbes [2], Mr Coates [3] and Mr Cobbe (Minister for Defence) [4], with Sir Maurice Hankey present. The New Zealand Ministers were generally favorable to the proposal.

At this time it was contemplated that there was to be an Imperial Conference in 1935 or 1936 and it was suggested that the other Dominions should be approached with a view to the matter being discussed at the Imperial Conference. The death of the late King led to the postponement of the proposed Imperial Conference and when Sir Maurice Hankey passed through Canada on his way to the United Kingdom the disturbed state of Canadian politics made it inadvisable for him to broach the subject there.

When in Australia, Sir Maurice expressed the opinion that South Africa was greatly concerned at the world situation and was desirous of improving her defence position. He thought the proposal which I had made was one which would appeal to the South African Government. The world situation today is much more serious than in 1934 when I first made the proposal. The German Navy is much stronger and there is some sort of agreement existing between Germany and Japan, although just how far the agreement goes is unknown. The Army and Navy factions in Japan are becoming more aggressive and, as is shown by the fall of the Hirota Cabinet, are dominating the political situation. A civil war in Spain has created a situation in Europe which may have serious repercussions in the Mediterranean and the withdrawal of British capital ships from the North Sea and the Mediterranean becomes every day more difficult.

The recent increase by over one million pounds of the expenditure by Canada on defence shows that that Dominion is awaking to a realization of the dangers of the situation. The matter is one which should be considered at the forthcoming Imperial Conference.

The proposal in brief is that a capital ship, probably costing from eight to ten million pounds, especially adapted for service in the Pacific and based on Singapore should be contributed by the Dominions, the British Government to be responsible for manning the ship and for its maintenance. It might be considered whether the Dominions should not also contribute to the maintenance of the ship. I would suggest that the cost should be shared by the Dominions on a population basis except in the case of India where some other basis might be agreed to if India desired to be included with the Dominions in this contribution.

G.F.PEARCE

[AA : CP 290/6, BUNDLE 1, ITEM 28]

1 The Secretary of the Committee of Imperial Defence, Sir Maurice Hankey, visited Australia during the Victorian Centenary Celebrations in November 1934 and held general discussions on defence questions. He also visited New Zealand and Canada during his tour.

2 George W. Forbes, New Zealand Prime Minister and Minister for External Affairs 1930-35.

3 Joseph G. Coates, New Zealand Minister for Transport 1931-35, for Finance 1933-35, and for Customs 1933-35

4 John G. Cobbe, New Zealand Minister for Defence 1928-35.

[AA : CP 290/6, BUNDLE 1, ITEM 28]