145

2nd August, 1928

PERSONAL AND CONFIDENTIAL

My dear P.M.,

There has been some stirring of the Conservative conscience lately on the subject of 'safeguarding', the domestic euphemism for protection. A deputation of 200 Conservative M.P.s approached the Prime Minister [1] on the subject. Then both Amery [2] and Joynson-Hicks [3] have made speeches favouring an increase of safeguarding. Jix said in a speech that has had wide publicity that 'the Conservative party would have to consider seriously the extension of the policy of safeguarding to include the iron and steel industries'. To this the Prime Minister will not agree although he is fundamentally a protectionist, because of his pledges at the last election. The subject has the added complication for Baldwin that he is an important shareholder in the iron and steel industry and his personal financial position would be very much improved by 'safeguarding' the industry.

I believe that the policy of the Government is to encourage by all available means the policy of amalgamation and rationalisation in the iron and steel and coal industries, so as to enable them to produce more economically. They will let these industries be exposed to the cold blast of foreign competition for another couple of years so as to force this on. If they were to shield and protect them now, this policy would probably be retarded. The Government's policy will entail hardship to the extent of letting the inefficient firms go to the wall, but this automatic pruning of the dead and dying wood in these industries is considered inevitable. After they have purged themselves, the question of safeguarding may be more sympathetically considered.

I hear that Joynson-Hicks has aspirations to be the Prime Minister designate if anything should happen to Baldwin. He has been trying to pose as the big man of the Government for some time, but all he does in reality is make himself ridiculous. His indiscretions are proverbial. Low [4] has had not a little to do with making the public regard him as a clown.

I cannot gather that there are going to be any startling changes in the Cabinet if this Government gets back at the next election.

I hear that Worthington-Evans (Secretary for War) has had enough of the War Office and wants to go to the Board of Trade. It is possible that Bridgeman [5] may resign. Balfour [6] may drop out through age, and I hear that Salisbury [7] may go out of political life. I expect that Ormsby-Gore [8] will get a move up. There may be other changes in contemplation but I have not heard of them.

[9]

One of the most interesting domestic developments lately has been the voluntary scaling down of wages and salaries throughout all the railway systems of Great Britain by 2 1/2%. This applies from Directors' fees downwards. it seems to me that the Directors might have given a better lead than this and have docked themselves of 5% or 10% of their fees. I believe the movement was initiated owing to the activities of J. H. Thomas [10] and Sir Josiah Stamp.

[11]

I see that Mark Sheldon [12] has added his voice to those of the other prophets with regard to the urgent necessity for economy in the Commonwealth. I refer to his speech at the annual meeting of the Australian Bank of Commerce when he criticised railway expenditure. I suppose these Delphic utterances do some good in drawing public attention to the larger aspects of public policy, but they are meant for domestic consumption and unfortunately have a wider audience.

I imagine that a not inconsiderable part of your difficulties lies in the fact that you have but the slenderest of constitutional opportunities for impressing on the States the urgent necessity for economy in public works, especially those of a non- reproductive nature. And amongst these the majority of developmental railways must be placed, at least in their early stages.

I met the Archbishop of York [13] at lunch with Geoffrey Dawson [14] a few weeks ago. He is to become Archbishop of Canterbury towards the end of the year. He is a kindly man, who likes social intercourse and dislikes York in consequence. He has not the intellectual capacity nor, I should think, the character or personality of the present Archbishop of Canterbury [15], but he will be, I should think, adequate.

Hastie [16] (of J.B. Were & Son) leaves this week to return to Australia. I have ventured to give him a personal note of introduction to you. He is a young, active-minded, well-balanced fellow and I think he will appeal to you. He is rapidly getting a very good knowledge of the world's finance.

In conversation with Tom Jones [17] today I heard something more about the 'safeguarding' stir in the Cabinet and Conservative Party. At today's Cabinet the Prime Minister is to deliver a thoroughgoing homily on the corporate responsibility of the Cabinet and the dangers of ill-timed and ill-considered speeches of the type that Amery and Joynson-Hicks indulged in lately.

Apart from the fact that this Government holds its mandate from the electors by virtue of Baldwin's pledge that no further protectionist adventures are to be considered in the life of this Parliament, there is a grave danger that the Amery-Jix 'safeguarding' speeches may give Lloyd George [18] the cry that he is looking for and that he may start to stamp the country waving the old banner with the dragon of 'dear food' on it. Because it is held that you can't 'safeguard' iron and steel without doing the same for agriculture, which is in much the same plight. These 'safeguarding' speeches might be all right on the eve of the election campaign, as they would sound out the temper of the country and perhaps pave the way to the Conservative Party going to the country with its limbs freed from the shackles that now encumber it as regards a moderate extension of protection.

The Prime Minister goes to Aix on 11th August and will be there until 20th September. Mackenzie King [19] is going to the League Assembly at Geneva this September and will visit Baldwin at Aix (40 miles away). Baldwin hopes to take up with him then the question of Canada taking an increased number of British migrants, in the terms of the Report of the Industrial Transference Board.

It is possible that it may be proposed to create some sort of joint British-Canadian Commission to facilitate and promote increased migration to Canada.

I am, Yours sincerely, R.G. CASEY

1 Stanley Baldwin.

2 Leopold Amery, Secretary for the Colonies and for Dominion Affairs.

3 Sir William Joynson-Hicks, Home Secretary, known as 'Jix'.

4 David Low, newspaper cartoonist.

5 William Bridgeman, First Lord of the Admiralty.

6 Lord Balfour, Lord President of the Council.

7 Lord Salisbury, Leader of the House of Lords.

8 William Ormsby-Gore, Parliamentary Under-Secretary of State for the Colonies.

9 In fact, the Labour Party led by Ramsay MacDonald was returned in the 1929 election.

10 General Secretary of the National Union of Railwaymen.

11 Chairman of the London, Midland and Scottish Railway and a Director of the Bank of England.

12 Sir Mark Sheldon, Chairman of the Australian Bank of Commerce Ltd. He had been Australian Commissioner in the United States 1919-22.

13 Most Rev. Cosmo Lang.

14 Editor of The Times.

15 Most Rev. Randall Davidson.

16 Thomas Hastie. See Letter 129.

17 Deputy Secretary to the Cabinet.

18 David Lloyd George, Prime Minister 1916-22.

19 William Mackenzie King, Canadian Prime Minister.