193

25th April, 1929

PERSONAL AND CONFIDENTIAL

(Due to arrive Canberra 24.5.29)

My dear P.M.,

I enclose Baldwin's [1] policy speech from the 'Times' of April 19th. I am told by those who heard it delivered that it was done in his most nervous and 'affaire' manner-which doubtless was taken in many quarters as a sign of earnestness-but really, I think, was due to the fact that he was not very much impressed by what he was saying himself. The references to the Dominions were inconsiderable.

Snowden's outburst in Parliament [2] on 17th April, on the subject of the Balfour statement (we to accept from Europe only what we pay to U.S.) in regard to International War Debts, may possibly prove a useful election gambit for the Conservatives, in that they have some grounds for representing the Labour Party as sponsoring repudiation. But I hardly think it would be an effective battle- cry. I enclose rather voluminous cuttings in case you are interested.

Whilst I do not suppose, from what I know of affairs here, that any definite plans as to Cabinet reconstruction have been made by the Conservative Government in the event of their being again returned to power-yet I hear from a high quarter that the proposal to divide the control of the Dominions Office and the Colonial Office has recently been tentatively discussed on the lines of putting Dominion Affairs under the Lord President of the Council- and so effecting the divorce without creating a new ministerial portfolio. Presumably, in this event, Dominion Affairs would come rather more into Hankey's [3] province, in his capacity of Secretary (or 'Clerk') to the Privy Council, although he could not be expected to concern himself with the day-to-day affairs of an additional Department.

Lord Balfour, who is now Lord President of the Council, is retiring, and, as Amery's [4] stock is fairly low at present, there is likely to be a considerable re-shuffling, if the Conservatives come back.

The Lord Privy Seal (at present Lord Salisbury) has also been mentioned as a possible Minister-at present not overworked-who could attend to Dominion affairs.

I read your speech (14th March), introducing the Economic Research Bill, with great pleasure, and have circulated it to a number of people here who have been delighted with it. [5]

Most people who think at all have felt the necessity for digging below the surface in an attempt to lay bare the forces which, slowly working over a long period, are producing the surface phenomena, but people are constrained by the day-to-day necessity of keeping their particular ship on an even keel to treat symptoms as if they were basic causes-politicians and doctors and others all suffer from this disability.

Economics and the social and physical sciences, however, are beginning to show signs of asserting themselves or being recognised as the sharp and effective tools of those in power- political or otherwise.

But research is slow and Governments are ephemeral, and economic research may produce facts and evidences of tendencies that are politically unpalatable-so that progress on sound economic lines is liable to be slower than the progress of physical science-the 'lag' between discovery and implementation will be longer.

I don't suppose that the general trend of the economic history of Australia differs relatively very much from that of Canada, some of the South American States, or even of the United States-and possibly we could learn something on broad lines from their experience.

As you know, the Empire Marketing Board has been allowed to use 2,000 a year of its funds to endow a Chair of Imperial Economic Research in the London University. This is another good move and should have useful results in the course of time.

In your personal letter of 11th March you warned me off McDougall's [6] field in the matter of Australian overseas trade and financial figures. [7] You evidently thought that I was doing this without his knowledge. Actually I had told him all about it and had sent him a complete set of all the compilations and graphs that I had made. I put this material together over the course of several months for my own information and in order to have it on hand in graphic form if I ever required it. I sent a set out to the External Affairs Department solely for their information, as I am firmly of the opinion that they should not be without general information at least on this important subject-and the form in which I presented the information seemed to me a very appropriate one for their purposes. Far from treading on McDougall's toes, I work in very closely with him and we meet and discuss this and many other subjects each week.

The work that I put in on these world trade figures was mostly out of my ordinary office time and I employed an outside draughtsman to put the graphs into workmanlike form. I may say that I have been obliged through lack of sufficient assistance at this end to spend a good deal of my own money on getting work done that I think comes well within the province of this department.

Sir Hugo Hirst [8] has been obliged to withdraw his proposals for his new share issue to be virtually confined to British subjects.

I enclose cuttings from the 'Times'. He has been most worried about it all. I only hope that he does not feel that the situation arose through his being absent from this country.

I enclose 'Financial Times' cutting regarding the opening of the 'Industrial Peace' Conference.

You may be interested to know the final result of the 'Francs' case [9], in which four Foreign Office men were unfortunately involved. Gregory (who was most concerned) had to leave the service-and voluntarily exiled himself abroad. He has recently written a book of reminiscences in which he has decently avoided all reference to the incident. [10] The only hint of any feeling lies in the fact that he has studiously and obviously avoided all mention of Tyrrell's name in his book. Tyrrell was head of the Foreign Office when the Francs incident occurred [11] and is a fellow Roman Catholic.

O'Malley was suspended for 12 months [12], most of which time he spent as a personally paid Private Secretary to Winston Churchill [13], devilling material for his latest book, 'The Aftermath'.

Maxse [14] is still in the Foreign Office. G.H. Villiers, a senior Counsellor in the Foreign Office, was implicated to a minor extent but he was given to feel that any hope of promotion was gone, so, after lingering on for nine months, he has retired and gone to the City. [15] So ends an unhappy affair in which 'the punishment' seems to have outstripped 'the crime'. [16]

You will shortly be faced with the necessity of choosing someone to come to London for the Experts Conference on the Operation of Dominion Legislation which is to open on 8th October. As I recently telegraphed you, the Dominions Office think that appropriate representation would be a Minister and a Law Officer, as there will be political and legal aspects-but as no Minister that you will be able to send will care to commit the Commonwealth without frequent reference back to Cabinet by telegram, I cannot see the point of sending a Minister, when Garran [17] would do as well-I am assuming that you will send Garran. It may be necessary to send someone else as well with a knowledge of the legal side, as the Conference may divide itself into Sub-Committees sitting simultaneously. [18]

I see that you have chosen Marr [19] to lead the delegation to the League Assembly. I don't suppose you would consider sending him on afterwards to do the Conference on Operation of Dominion Legislation, as he is not a legal man, I understand, and nobody without considerable legal experience would be of any use at this Experts Conference.

I think you will like Dame Janet Campbell. [20] She is apparently very capable, both on the administrative and technical sides, and has managed to remain a human being through it all. She is unmarried but maintains her father, who is between 80 and 90. She is very highly thought of, and the Department of Health made me fully conscious of the privilege we were asking for in trying to get her. I was rather mystified for a moment when the head of the Department referred to her as 'M. and C.W.'-which turned out to be 'Maternity and Child Welfare'. Sir George Newman (Chief Medical Officer of Ministry of Health) is most anxious that she should not be asked to 'stump the country' in defence of whatever scheme she may put forward.

I enclose 'Times' article (24th April, 1929) on 'Industry in Australia'. If this is a true picture, I had not realised that things had come to such an abrupt state.

I write in another letter (which presumably you will pass to the External Affairs Department) on Disarmament, and the proposal that a British Cabinet Minister should visit America after the Election. It will interest you to know, in great confidence, that if this Government is returned, the present intention of Mr.

Baldwin is to go to America himself and to take Tom Jones [21] with him. This, I think, is quite a big idea, as Baldwin would probably go down very well with the Americans, particularly in the Middle West.

Baldwin's going to America would be good liaison. The Big Four to Australia [22], even apart from their mission and report, was good liaison. Possibly a Big Labour Four to Australia would be good liaison. [23] To my mind you can't have too much personal liaison in these days of complications. The one real way to break down misunderstandings is by personal contacts.

A very good example of this exists in the fact that Hartshorn (Postmaster-General in the Labour Government here in 1924) is coming back from India (member of the Simon Commission [24]) with entirely changed ideas about the relationship of Great Britain to India. He was previously in the habit of talking wildly and without personal knowledge about India, and the iniquity of this country not taking immediate steps to grant self-government and Dominion status to India. In a personal and confidential letter to a high quarter in London, he has the grace to cry shame on himself for having talked previously on hearsay evidence. He has come to see India in its proper light through personal contact, and presumably will have influence on his colleagues on his return.

A new departure appeared in the form of an advertisement in last Sunday's 'Observer', copy of which I enclose. It is a plea for investment within the Empire, inserted by Corporation and General Securities Ltd. The sentiment is admirable, and there does not seem to be any ulterior motive behind it.

I am, Yours sincerely, R.G. CASEY

1 Stanley Baldwin, Prime Minister.

2 Philip Snowden, Chancellor of the Exchequer in the Labour Government of 1924. He argued that although the Labour Party generally favoured an all-round cancellation of war debts and reparations, the Government retained the prerogative, if circumstances arose, to renegotiate with the United Kingdom's debtors.

3 Sir Maurice Hankey, Secretary to the Cabinet.

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

5 The Economic Research Act of 1929 provided for the creation of a Bureau of Economic Research to undertake research on problems of interest to Australian governments and to assist research conducted in other institutions.

6 F.L. McDougall, Economic Adviser to the Australian High Commissioner.

7 The tone had been kind, but Bruce had made clear his unhappiness at receiving a letter from Casey on overseas Australian trade, complete with figures and graphs. This was McDougall's field.

Bruce's letter is on file AA:A1420.

8 Chairman and Managing Director of the General Electric Co. Ltd and a member of the British Economic Mission to Australia in 1928.

9 A public scandal involving civil servants found to have been speculating in currency. See Letters 92 and 93.

10 J.D. Gregory, until the previous year Assistant Under-Secretary at the Foreign Office. His book was On the Edge of Diplomacy:

Rambles and Reflections 1902-1928, Hutchinson, London, 1929.

11 Sir William Tyrrell, since the previous year Ambassador to France.

12 Owen O'Malley, First Secretary at the Foreign Office, was permitted to resign and was reinstated a year later. His subsequent career was modestly successful: knighted in 1943, he concluded his service as Ambassador to Portugal 1945-47.

13 Chancellor of the Exchequer.

14 H.F.B. Maxse, Second Secretary at the Foreign Office, was severely reprimanded and forfeited three years' seniority.

15 Villiers re-entered government service in 1939-45 and after the war again joined the Foreign Office in a relatively junior capacity.

16 Sir Miles Lampson, Ambassador to China, was also mentioned in the lawsuit that brought the whole affair to light but his offer to resign was not accepted.

17 Sir Robert Garran, Commonwealth Solicitor-General.

18 Bruce chose to send Sir William Harrison Moore, Dean of the Faculty of Law in the University of Melbourne 1892-1927.

19 Charles Marr, Minister for Home and Territories 1927-28 and now an Assistant Minister.

20 Senior Medical Officer for Maternity and Child Welfare in the Ministry of Health. The Australian Government had asked for an adviser to assist in drawing tip plans for improvements in Australia's maternity and child welfare services.

21 Deputy Secretary to the Cabinet.

22 The reference is to the Economic Mission of 1928. See note 22 to Letter 85.

23 See Letter 107.

24 A former Solicitor-General and Attorney-General, Sir John Simon was appointed in 1927 to head a commission of inquiry into Indian constitutional development. The Simon Report published in 1930 called for responsible government in the Indian provinces and set federation as a long-term aim. Much admired in the United Kingdom, the report alienated Indian nationalists seeking immediate self- government.