(Due to arrive Canberra 21.12.28)
My Dear P.M.,
I had half-an-hour with Sir Eric Geddes  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! 
I see Sir Alan Anderson of the Orient Company  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  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  (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  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.  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  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  (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.  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  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  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  resists all attempts on the part of his own party to bring it up.
Lord Selborne  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.  He has evolved a most interesting card game which is designed to inculcate the basic principles of economics and finance.  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  (Professor of Economics, London School of Economics), a banker, a stockbroker, Tom Jones and Grigg  (Winston's  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  (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