My dear P.M.,
Sir Hugh Denison  came to see me at this office this morning and, in the course of conversation, disclosed what was in his mind about our representation in America.
He is firmly of opinion that Australia should establish a Legation at Washington, and supports his contention by opinions that he quotes of Sir Esme Howard , Mr. Vincent Massey , and others.
He proposes to make strong representations to you on these lines on his return to Australia. 
He has discussed the cost of such diplomatic representation with Vincent Massey, who has supplied him with figures that shew the cost of the Canadian Legation as approximately 20,000 a year.
However, as this is based on a salary of 5,000 a year for the Minister, 1,400 a year for First Secretary, 1,200 a year for Second Secretary, 1,000 a year for Third Secretary and proportionate amounts for the rest of the staff, it is my impression that the very considerable extra living-allowances which would be essential to make up amounts on which these officers could live have not been included. The 20,000 may be the bare figure for salaries and office expenses, but it is inconceivable to me, from a knowledge of what the staff of the British Embassy are paid, that this could be an inclusive figure.
Sir Hugh tells me confidentially that his period in America cost him at the rate of 9,000 a year, in addition to his salary and allowances, and admits that an Australian Minister would have to have a considerable private fortune to be able to accept the projected post at Washington at a salary of 5,000 a year, if he were to do the requisite amount of entertaining that would be called for.
He says that Sir Esme Howard was so impressed with the arguments that he had to put forward that he offered to look out for a suitable building for us for a Legation in Washington.
Sir Hugh said that Mr. Louw , the South African Trade Commissioner in New York, told him that his country was anxious to get diplomatic status for him, but they could not afford a Legation and so were turning to the idea of making their Trade Commissioner into a Consul-General. He quoted, as a possible way round the difficulty, the method that he said was adopted by Esthonia, which was to arrange with the American Government to accept an Esthonian Minister but not to appoint one, and to ask the United States Government to accept their Consul-General in New York as Charge d'affaires ad interim-a state of affairs which Sir Hugh says has been allowed to continue, and which enables the Consul-General to function as such and to have the advantage of diplomatic status.
With regard to this latter statement about the Esthonian representative, the American Department of the Foreign Office tell me that it is inherently improbable that the Americans would concur in such an arrangement for any length of time, especially if the Esthonians did not maintain an office in Washington.
I am, Yours sincerely, R.G. CASEY