7th June, 1928
PERSONAL AND CONFIDENTIAL
My dear P.M.,
Batterbee  rather surprised me by saying lately that he was very glad that Sir Harry McGowan  had dropped out of the Big Four.  He says that, in his opinion, Sir Harry McGowan, Sir Alfred Mond  and Sir Otto Niemeyer  all preach a dangerous financial doctrine from the Imperial point of view in that they think that 'as long as you get the money, it doesn't matter where it comes from'. It is rather an abstruse economic point, to my mind, to decide whether it is better to get (say) American money now for the development of Australian public works and industry, or to wait until such time as sufficient money is available from Imperial sources.
This brings me to a subject that I have often meant to ask you about. Would you welcome American money for the development (say) of Papua and the New Guinea mandate? Possibly you may say 'Yes, as long as it is not in an amount that would swamp our own endeavours'. But I can well imagine that unless it were tackled on a big scale the exploitation of this new and untrodden country would offer but little attraction to foreign or any other capital.
You probably will not want to answer this conundrum in explicit terms, but I would be interested to have your general reaction to it. Your reply, if you want to give one at all, will no doubt take into account the effect of such a move on the League of Nations Permanent Mandates Commission, as well as on domestic politics in Australia.
I have no reason in asking you this other than that it is a possible eventuality that one may come into contact with at some time or other.
I have brought forth my mouse in the shape of a letter to you on liaison. I give myself no little credit for restraint in having spelled it with a small 'l' throughout.
It will have achieved its purpose if it directs your mind for a short time to possible (I do not say probable) lacunae in our inter-departmental arrangements.
I have come across a curious case of dual interests lately in the person of Humbert Wolfe , who between the hours of 10 a.m. and 6 p.m. is an efficient, high official of the Ministry of Labour and deals most expeditiously and effectively with the very material problems of that office. For the rest of the 24 hours he is an obscurantist poet, well and favourably known throughout the literary world for his volumes of most obscure and, to me, unintelligible poetry. As I meet him, he has a clear mind, lucid speech and very long hair-but I toiled through one of his books of poems lately and came out the other end without having the least idea of what he was driving at-and I got Tom Jones  to admit the same thing too.
I have recently come across a most delightful book, 'The Practice of Diplomacy', being a translation of an old French book of 1716 called 'On the manner of negotiating with Princes', with a foreword by Sir Frederick Whyte.  I started to summarise its precepts for you, but gave it up as any such compression would be too bulky. I will send you copy by this or the next mail, and I think I can promise that you will enjoy an hour's reading of it.
It is, as the original author says, 'a sketch of the qualities and duties of the diplomatist'.
I had Sir William Clark, Hankey  and Harding  to meet Sir Charles Nathan  at lunch yesterday. Nathan pumped Australian 1932 Exhibition into Clark, who goes to Canada in September as British High Commissioner and who may be of use in securing Canadian co-operation. I thought it a good thing to have Hankey and Harding too as they may be of use to Nathan later in other connections.
Sir William Clark will communicate from Ottawa with His Majesty's Government through the Dominions Office. He hopes to have a staff of two -one man from each of the Dominions and Foreign Offices. He has, I am afraid, been rather too long a civil servant to shine at Ottawa, particularly vis-a-vis Phillips , the American Minister.
My dinner party for Sir Hugo Hirst  comes off in a few days.
It will consist of Amery , Hirst, Clark , Malcolm  and possibly Duckham  (to complete the Big Four), Nivison , Sanderson , Andrew Williamson , E. V. Reid (Dalgety's)  and Sir Charles Nathan.
Princess Ingrid  seems on short acquaintance to be an attractive and intelligent girl, but with all the naivete of 18.
We were at a dance at the Swedish Legation given for her lately.
Winston  is nimble-minded to a degree, but I suspect his latest shaft of wit being a prepared impromptu. In a debate on the Rating Scheme he was taken to task for including the Breweries in the list of industries that would get relief. He was asked the rather stupid question of whether the price of beer would be reduced in consequence. He replied that that depended on many things over which he had no control-whether the grade of beer was to be altered and whether more beer was drunk-'in fact on the gravity of the beer and the levity of the consumer'!
I asked Lord Cecil if I could call on him to talk about Dominion consultation. He had referred in the House of Lords to the unsatisfactory nature of the present system. I had a long talk to him this morning. When I arrived the first thing he said was 'Have you come to abuse me too?', rather in the aggrieved 'et tu Brute' manner! 
He talked freely and was quite interesting, although not particularly convincing. He said that now that he was out of office, he could be quite open and speak his mind to me. His ideas in brief are as follows. They were clothed in more delicate language but this is what was in his mind.
He thinks the present position of the British Government an intolerable one, whereby they cannot move a finger in international affairs without consulting the Dominions. And, to make it worse, the Dominions are apparently so indifferent to the necessities of the situation that they leave all the burden of consultation to H.M.G. They send indifferent High Commissioners and, on the whole, make but little effort to get to grips with the international situation so that they can give quick, effective replies. H.M.G. is continually being belittled in the eyes of the world by reason of the fact that before she can pronounce herself, she has to admit to the world that she has to go into consultation all round with the Dominions.
Australia and New Zealand, he admitted, were much the most helpful. Canada practically took the impossible attitude that she would not consult but she complained bitterly if she were not consulted. Ireland was of not much importance as she was not really an international entity.
His solution was a real recognition of the fact that the Dominions were international units in that they were independent and had to be brought round to H.M.G.'s point of view. They were therefore, he thought, capable of being regarded as countries with which Great Britain was in friendly diplomatic relations, and, as such, should be dealt with direct by the Foreign Office. He advocated the Dominions Office being taken over as a Department of the Foreign Office and looked after by an Assistant Minister for Foreign Affairs. But he said that he had been without any support in the Cabinet in these ideas. He thought it would come about eventually, but he did not think for some time.
A corollary to this must be a recognition on the part of the Dominions that they had a definite responsibility in the matter.
They really ought to send more effective representatives to London. He still thought that there should be a member of Dominion Cabinets in London, say for a tour of duty of two years at a time;
not on the principle of being able to consult their Governments, but as a more authoritative voice. The Foreign Secretary (or, under his scheme, the Assistant Foreign Secretary) should see them all at least once a week.
Another necessary function of his proposed Assistant Foreign Secretary would be to take charge of the Foreign Office when the Foreign Secretary was at Geneva, as he was for some many weeks out of each year, during which time, under the present arrangements, there was nobody of Ministerial responsibility in charge.
I went to a Government lunch today at which Sir Samuel Hoare  presided and Amery and 40 others were present, to do honour to Wilkins  and Eielson.  Wilkins gave a brief but very good and restrained account of the expedition. He is lunching with me next week to meet some people that he wants to get in touch with.
I have found out from Tokyo that Major Capes  is still persona ingrata to the Japanese Government. I wrote privately as it seemed to me that his part in the escapade was one that might conceivably be officially forgotten, but apparently not. He is one of the very few people we have who has most at least of the requisite qualifications for employment in the Far East.
I have written rather a long letter by this mail on the United States in relation to the problem of Naval Strength, which I think it would be worth while your reading.
I am, Yours sincerely, R.G. CASEY