189

11th April, 1929

PERSONAL AND CONFIDENTIAL

(Due to arrive Canberra 10.5.29)

My dear P M.,

I gather from the Commonwealth Hansards that you have a new and promising young firebrand in the House in the person of Beasley.

[1]

The Antarctic Expedition arrangements are going ahead fairly satisfactorily, although with the inevitable squabbles between your Committee in Australia and Mawson and myself here. [2] However, we seem to be prevailing. I like Mawson much better on further acquaintance, but he unfortunately has not the gift of clearness of thought or expression which a scientific training usually engenders. And, like most of us, he thinks he is a heaven- sent business man, which I'm beginning to think is as common a delusion as the widespread conviction that one has a unique sense of humour.

According to an apparently inspired 'leak' from Washington, we are to be faced by a lack of recognition by the Americans of some at least of our Antarctic claims. This is rather worrying, but until one knows more it is no use speculating about it.

I have always thought that this Australian Expedition should be a two years' one-and I can only believe that it is the cost that is frightening your Antarctic Committee in Australia. Actually, I shall be surprised if the Commonwealth Government have to find much more than 10,000 as their share of the first year's work, and probably not more than 2,000 to 4,000 for the second year.

I am glad Wilkins [3] has given up his idea of his submarine polar enterprise for this year at least. I have just had a long letter from him in which he sets out his reasons for thinking that it is a practical possibility and justified by the scientific results that would accrue. However, his most useful role in the coming Antarctic season is to try and complete his contemplated flight from Graham Land to the Ross Sea-and to do so before Byrd [4] can do it in the reverse direction.

He has written a most extraordinary article in one of the Hearst [5] papers, in which he queries the validity of Antarctic claims in general-ridicules the idea of anyone claiming territory by having flown over it-and generally seems to have forgotten that he accepted with enthusiasm the formal authority of H.M.G. to drop flags and claim territory in the name of the King, prior to his past season's enterprise.

He is coming to London shortly and I will have to have it out with him and see where he stands before we suggest his being entrusted with such a formal commission again.

The early stages of the election campaign are well under way. As you will have seen, Lloyd George got in early with his panacea for unemployment and it has, without doubt, created a great deal of interest and attention and has apparently improved the outlook for the Liberal Party. [6] By taking the floor with such a bold gesture, he has put the other parties on the defensive and the major part of the time and attention of Conservatives and Labour have been directed towards exposing the fallacy of his proposals.

The 'Times' in particular, has devoted a number of leading articles to this end (two of which I enclose).

Lord Grey [7] has given a qualified approval of Lloyd George's 'Pledge' [8]and I enclose his restrained and sober speech.

It is thought, however, in some quarters that Lloyd George sprung his mine rather too early and that his thesis may be shot rather too full of holes for comfort by the time of the election. Baldwin [9] has rather held back and is not showing his hand for another week yet. I understand that he does not propose to attempt to produce such a succulent and attractive bait as Lloyd George-his appeal will probably be more sober and less spectacular.

Some indication of the popular estimate can be had from the fact that whereas about a month ago the Stock Exchange 'quotations' were-Conservative 274, Labour 260, Liberal 62, they are now 280, 251, 85.

In looking through the Liberal Party's ambitious compilation 'Britain's Industrial Future', I think I have found the source of inspiration of Davenport & Cooke's last critical pamphlet. [10] The general tone of the Liberal Party's remarks on 'Imperial Development' is very much the same as that of Davenport & Cooke.

The Liberal Party production says:-

It is often contended that by means of an enlightened policy of Imperial Development we might find within the British Empire full compensation for our trade losses in the rest of the world.

But it is necessary to guard against exaggeration. The above is, in fact, a dangerous over-statement. Valuable as the Empire markets are, their capacity for any greatly increased absorption of British goods is limited in the case of the Dominions by their small population.

Our trade with the Empire constitutes about one-third of our total external trade. It is impossible for us to adopt any method of Empire development which would involve placing barriers in the way of the other two-thirds of our trade ... We still use the greater part of our exported capital for Imperial development and this is greatly encouraged by the privilege of having their stocks treated as trustee securities which the Empire governments enjoy. In view of the stringency of capital supply and our needs for home development, the use of British capital for this purpose ought to be supervised by a 'Board of National Investment'.

We cannot adopt any effective system of preferences without greatly increasing the cost of living of our people and putting obstacles in the way of our foreign trade; moreover, such a system would mainly benefit the Dominions, not India or the other parts of the Empire.

I see that S. Russell Cooke sat on some of the Committees of the Liberal Industrial Enquiry that was responsible for the publication of 'Britain's Industrial Future'.

You may remember that you wrote a letter to Mr. Baldwin when I was in Australia asking if I might have facilities for approaching all appropriate departments of H.M.G. in an effort to bring up to date our knowledge of the Netherlands East Indies, and the Pacific Island groups to the north-east of Australia. I have been thrusting at this big subject for the last twelve months and have sent out a good deal to fill gaps in our knowledge and files. I have lately been attempting the much more ambitious task of committing all the salient intelligence of this big area to map form, and have had the cooperation of individuals in several departments in the task. I hope to have a series of maps ready to send out within a month. If, when they arrive, you could say a few words to Henderson [11] as to their value as the basis of a system of island intelligence, it would help things along. I will mention in a personal letter when I am sending them.

There is no doubt but that this Intelligence side cannot be regarded as satisfactory until the Defence Department gets to Canberra, and there is close co-operation between the External Affairs Department and the Intelligence Branches of the Army and Navy. The External Affairs Department should be the father and mother of all Intelligence-and the three offices should live in each other's pockets.

Although I find myself almost continually submerged by work of one sort and another (mostly inevitable but partly self-imposed) there is not really very much of importance going on at present, and I don't suppose there will be much this side of the election.

I enclose the 'Financial Times' summary of the terms of transfer of interests of share holders of subsidiary companies to the Merger Company. [12] I have a personal letter from Mr. Justice Rich [13] by this mail. For your most personal information, he is, I think, a little grieved that he has not yet been ennobled!-he says- Two of our members have received the K.C.M.G., Isaacs [14] in July last and Duffy [15] this month. When in London I was amused to hear from Duffy his congratulations to Isaacs: 'It should have been all or none, the omission of the rest of us is a slight'-but circumstances alter cases! Duffy, Powers [16] and I were appointed in the same year within a month or two of one another, but I have had the longer service as I was translated from the N.S.W. Supreme Court after two years' service. [17]

Montagu Norman [18] gave a very confidential address to a select audience of twenty or so men at the Foreign Office recently on British financial and trade conditions. I hear that he assured them that British banking and the 'money' trades were in good order, but he drew a rather pessimistic picture of British industry-as lacking imagination and drive. I hear from other sources that he thinks that financially this is going to be a disturbed year.

I enclose 'Times' report (10th April) of Duckham's [19] address to the Royal Empire Society (ex-Royal Colonial Institute) on Australia.

Cosgrave's Government is carrying on with a very small majority in the Irish Free State, with the risk of an adverse vote at any moment. [20] An election means the distinct possibility of de Valera coming back with a majority. It is thought in some interested quarters in Whitehall that the policy of pinpricks on constitutional questions that the present I.F.S. Government has adopted latterly towards H.M.G. springs from the initiative of I.F.S. civil servants who see their way to killing two birds with one stone-by providing ammunition which is not unwelcome politically to the present I.F.S. Government, and by originating material which would ingratiate them with a de Valera Government if it came in, by showing their anti-British tone.

No one can tell, of course, what line a de Valera Government would take. If they chose to have no dealings with H.M.G. but to abide by the provisions of the Anglo-Irish Treaty, then no great harm would be done-but if they went so far as to deny the Treaty, then presumably H.M.G. must take steps to enforce its performance.

I am, Yours sincerely R.G. CASEY

1 J.A. Beasley, Labour M.P. from New South Wales 1928-46, was a supporter of New South Wales Labor Premier J.T. Lang and was to help bring down the Scullin Federal Labor Government in 1931.

2 See note 13 to Letter 146 and note 17 to Letter 186.

3 Sir Hubert Wilkins.

4 Commander R.E. Byrd, U.S.N., leader of a United States expedition to the Antarctic.

5 William Randolph Hearst, owner of newspapers in San Francisco, Chicago, Boston and New York.

6 David Lloyd George, Prime Minister 1916-22, urged use of the unemployed on public works.

7 Liberal Foreign Secretary 1905-16.

8 The 'pledge' was Lloyd George's undertaking that a Liberal government would reduce unemployment to normal levels within a year and without increased taxation, by means of public works, especially road building.

9 Stanley Baldwin, Prime Minister.

10 See Letters 76 and 178.

11 Dr Walter Henderson, Head of the External Affairs Branch.

12 See note 2 to Letter 170.

13 George Rich, a Justice of the High Court of Australia.

14 Sir Isaac Isaacs, Member of the Judicial Committee of the Privy Council and a Justice of the High Court of Australia.

15 Sir Frank Gavan Duffy, a Justice of the High Court of Australia.

16 Charles Powers, a Justice of the High Court of Australia.

17 Gavan Duffy was appointed to the High Court bench in February 1913, Powers in March, Rich in April. Rich was made K.C.M.G. in 1932.

18 Governor of the Bank of England.

19 Sir Arthur Duckham, a member of the Economic Mission to Australia in 1928. In his address, Duckham asserted that there was a basis for true prosperity in Australia. However, before such prosperity was enjoyed certain fundamental problems must be overcome. The Economic Mission had identified the need for stronger Federal control over the States, a more unified approach to Australia's role in the Empire, a revision of tariff barriers, more harmonious industrial relations and a rationalisation of production and marketing of primary products.

20 In fact the government led by William Cosgrave lasted until the 1932 elections which saw Eamon de Valera's Fianna Fail party win sufficient seats to govern with Labour support.