17th January, 1929


(Due to arrive Canberra 16.2.29)

My dear P.M.,

Re the shipping companies and freight rates-there is really nothing much more to say in addition to the telegrams that passed between us. I am most relieved for your sake that it has turned out reasonably satisfactorily in the end. [1] Richard Holt [2] was the stumbling block and gave in with a bad grace. When he was first informed of the position he said to Shaw [3] (P. & O.): 'For my part I'll see them damned-let the Bruce Government go smash and we'll see how we get on with the next crowd.' Shaw tells me that this isn't quite to be taken at face value, as Holt is the type that gives vent to quite unrestrained comment of that sort and then waits to be wheedled round. He is, I am told, a very pleasant fellow, but has rather an intolerant attitude to any opposition to, or curtailment of, his wishes. His forbears have sailed the seas successfully with their own ships for so many generations that they think the world is in their debt. Even when he was talked out of his completely intransigent attitude, Holt was still for trying to get a hard and fast quid pro quo out of you-to try and get you to tie yourself down to some action, legislative or otherwise, that would tend to benefit the situation of the shipping companies. He took the point of view that you had not gone an inch out of your way to meet them or to ease their situation. His final shot at the second meeting of the heads of the shipping companies was that he was forced to agree as he would lose business if he kept his rates up, but that if the situation had been that they wanted to put the rates up and he did not, then he would have held out against them and gone his own way.

Shaw tells me in confidence that all the companies trading to Australia have been losing money for some years-except the Orient, which makes a profit on its passenger business and which is not much concerned with the freight side. One company, he said, had lost 50,000 last year.

Shaw is a good fellow and has been the greatest help. His name is the Hon. Alexander Shaw, son of an old Scotch law Lord [4] who is still alive. He married one of Inchcape's daughters and is said to be the natural successor of Lord Inchcape as head of the P. & O.

He was a member of Parliament for some time and is a Director of the Bank of England. He is 46.

I wrote privately to both Shaw and Anderson [5] thanking them in your name for the efforts that they had made to get this freight business put right. They were both very grateful for your message.

Sir Alan Anderson had already arranged to leave London on February 2nd for Suez on one of his own ships on a semi-business trip, and it is possible that, if he is chosen as one of the delegates to Australia, he will go straight on. I think Sir Granville Ryrie [6] is going with him as far as Suez to get the benefit of the sea trip after his illness.

Anderson jotted down a draft of the sort of notification that you might make to the Press in Australia with regard to the freight business, and gave it to me on the evening of 15th January. I enclose it herewith. As it contained practically nothing that would not already be in your mind, I did not do anything about it.

There were, in my opinion, no 'plums' in it that I could abstract and I did not think it worth while to telegraph you the whole of it.

Some time in the near future you will be asked to consider the question of Belligerent Rights. The documentation is tremendous at this end, and I have not sent it to you as it would be impossible to get such a mass of detailed material considered. However, a milestone has now been reached and I send you, in another letter by this mail, copy of Hankey's [7] tentative (and as yet unofficial) draft Report of the Belligerent Rights Sub-Committee of the C.I.D., which gives a convenient summary of the arguments.

It would, I think, be as well to get someone going into the subject, so as to be ready with the Australian viewpoint when you are asked from this end.

Although I have not sent out the detailed minutes of the meetings of the B. R. Sub-Committee, I have sent out a good deal of material that is on the files of the External Affairs Department.

I gather that Keith Murdoch [8] is becoming a great power in the land through the rising value of the Herald group of papers as a property, and through the acquisition of interests in papers all over the Commonwealth. I hear that he has just organised a company to take over the Adelaide 'Advertiser' from Bonython. [9] He is, however, I think, a better influence in the country than some other of our press magnates.

The Sun-Herald Cable Service in London is very pleased at having secured the job of serving a big group of South African papers with cable news.

In conversation with Clive Baillieu [10] (the elder) who went as substitute delegate to the League Assembly last September, he gave me to understand that he would much like to go to Geneva as a delegate again in September of this year. He goes out to Australia in a fortnight but apparently intends returning for a trip to England later in the year.

Dunlops, as you will have seen, are going in for consolidation and rationalisation on the grand scale. The Far East and India and Canada are, I believe, controlled through the Tyre Investment Trust-and now Australia has merged what I imagine are all the important existing rubber companies.

Amery [11] returns from Switzerland today and I hope can be induced to bring the question of the free loan of the 'Discovery' before Cabinet at an early date. Although I have throughout maintained the attitude that, as far as my knowledge of your mind goes, the decision regarding the expedition depends on the free loan of the 'Discovery'-I hope that such is not actually the case, and that you would not be debarred from sending the expedition on this account. [12] I venture to hope that you would go on with it even if Australia had to finance the whole effort. There is not too much time and I only hope the matter is decided soon. I have a cable from Mawson from Perth saying he arrives here in mid- February and asking me to try and 'hold the Discovery'. My wife suggested that I should reply that I would do my best provided I had an assurance that he would name a new type of penguin after me!

I am, Yours sincerely, R.G. CASEY

1 On 12 January 1929 Bruce asked Casey to inform Lord Inchcape, Chairman of the P. & O. Lille and senior partner in other shipping lines, that recently announced rises in shipping freight rates outward to Australia to apply from 19 January would probably lead to the defeat of his government when federal Parliament met in February. The sale of the Commonwealth Line had been a major issue at the recent elections, and Bruce feared that W. M. Hughes and some others would vote with the Labor Opposition against what they would see as exploitation by the overseas conference lines. A subsequent election fought on the stranglehold of the shipping combine would certainly see the defeat of the Government. Bruce sought a stay in the rates rise and a conference between the Commonwealth and shipowners. The cable is on file AA:A1420. On 15 January, after strong argument from some lines, the British and Norwegian companies agreed to defer the freight rises, and other continental businesses were left without much choice but to follow suit. The Orient and P. & O. Lines had disapproved the rises in the first place and lobbied on Bruce's behalf Liverpool ship owner Richard Holt was the main antagonist.

2 Partner in Alfred Holt & Co. of Liverpool; Liberal M.P. 1907-18.

3 Alexander Shaw, Deputy Chairman of the P. & O. Line; Liberal M.P. 1915-23.

4 Lord Shaw, a life peer, was a Lord of Appeal.

5 Sir Alan Anderson, of Anderson Green & Co., managers of the Orient Line.

6 Australian High Commissioner.

7 Sir Maurice Hankey, Secretary to the Cabinet.

8 Keith Murdoch, Managing Director of the Herald and Weekly Times Ltd.

9 Sir Lavington Bonython.

10 Richard Percy Clive Baillieu (see note 3 to Letter 130). He was not appointed in 1929 or in subsequent years.

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

12 Australia was seeking to borrow the Scott expedition vessel Discovery to be used on an Antarctic expedition to be led by Sir Douglas Mawson in 1929-31 (see note 13 to Letter 146).