207

18th July, 1929

PERSONAL & CONFIDENTIAL

(Due to arrive Canberra 18.8.29)

My dear P.M.,

I am afraid. this will be a scrappy letter, owing to extreme pressure here. I have had the utmost difficulty in keeping my head above water for months, going at high pressure from 9.15 a.m. till 6.30 p.m. Expedition business mainly responsible, and it cannot be sidetracked-otherwise, although I say it, the ship wouldn't get off in time.

There are a number of important matters in the wind-Singapore, naval armaments, Egypt-apart from tariffs and preference.

To get an understanding of the present position here, you have to realise that this Labour Government are rather suspicious and distrustful of the C.I.D., the resolutions of which they think (probably rightly) will conflict with the pure milk of the Labour doctrine-and they therefore hesitate to put matters up to the C.I.D., get their recommendation and then fly in the face of it.

They are therefore rather disposed to turn a blind eye to the importance of certain 'political' questions being vetted by the C.I.D.

The Foreign Office (in the shape of Sir Ronald Lindsay [1]) have tried to take advantage of this in the matter of Egypt. They have tried to rush the Anglo-Egyptian treaty negotiations straight from the Foreign Office to the Cabinet-short circuiting the C.I.D.-and Hankey [2] has had great difficulty in combatting this. It may be necessary for me to telegraph you in this regard.

The comments of the Dominions are proving very valuable in the matter of urging the Government into the right path-this really means your telegraphic comments, as the other Dominions (except New Zealand) never say anything worth saying. There is some reason to think that it was your telegram and that of New Zealand that made the Government decide to let the C.I.D. comment on the Singapore and naval reduction questions. [3]

If the Egyptian business looks like going wrong, I will telegraph you and perhaps again a telegram from you will tend to put it back on the rails.

I am afraid, as I told you last week, that they are out after Lloyd's [4] blood. It is a most underground machination and I think much to the discredit of the Foreign Office. [5] Of course, it is impossible for you to say anything by telegram that would help Lloyd, as he is the servant of the Government here, but when they begin to institute a policy in Egypt that represents a reversal of Lloyd's policy, then you may be able to take a hand in the business. As usual, the Foreign Office want to give away the position-they are all for accepting Mahmoud's (Egyptian Premier) proposal for us to evacuate all troops from Cairo and Alexandria and defend the canal from the canal banks. [6]

However, you will get the gist of all this by telegram before this letter and I will try and see you don't miss anything.

There has been a slight storm at Geneva. On the 8th July the 'Manchester Guardian' published a telegram from their Geneva correspondent in which it was stated with reference to Sir Granville Ryrie [7] and the Mandates Commission-'He appeared to know much less on the situation in New Guinea than most of the members of the Commission, and in many instances avowed his lack of knowledge'.

This was telephoned to the High Commissioner at Geneva and he was very disturbed about it, but was induced to ignore it and to make no public reply.

This came about by reason of there having been a lot of questions put to Sir Granville to which he could not reply and on which he asked leave for Fuhrman [8] to reply for him-which arises out of the fact that he won't read the papers with which he is supplied.

We hope we have managed to keep the above incident out of the Australian papers by requesting the two Australian Press Agencies here not to mention it. [9]

A company with a capital of 7 1/2 millions is being formed with Sir Robert Horne [10], Inchcape [11], Sir Cecil Budd [12], the Baillieus [13] and others on the Board. They will carry out zinc and other non-ferrous smelting in this country and abroad. They have applied to His Majesty's Government for the right to call themselves the Imperial Smelting Corporation Limited.

Your telegram about the letter that Dame Janet Campbell will carry to you from the Queen came too late to be effective, as the Queen had already seen her and given her the letter. [14] However, the letter that we drafted here included all the points that you wanted. I would suggest that when Dame Janet gives you the letter, you should hand it to the Governor-General [15] for 'release' to the press. In any event I am told that constitutionally the Queen could not send a letter of this sort to the Governor-General.

You will have seen from the Press Thomas' [16] scheme for assisting the development of Crown Colonies and protectorates.

Briefly it is as follows-1,000,000 is to be found annually by the Treasury for helping non-self-governing territories in various small ways, such as straight out grants (e.g. to Fiji to buy a ship for the Governor to move about in), contribution towards the interest on Colonial loans and even in some cases finding money for development where small and impoverished Colonies cannot raise loans.

There is also to be the innovation of extending the benefits of the Colonial Stock Acts to certain Crown Colonies-making their loans Trustee securities. Permission also is sought to allow Crown Colonies to add interest to capital indebtedness in cases where their expenditure on public works does not bring them adequate return (to meet service of the loan) for say five to ten years.

Most of this was contemplated rather vaguely by the Conservative Government but never got on to paper-and this Government has stolen their subdued thunder.

Kylsant [17] and his brother St. Davids [18] have had a public controversy over the conduct of the affairs and finance of the Royal Mail Steam Packet. I have not seen any of the Steamship princes or anyone who can tell me the inside story of it, but I enclose you a cutting.

I enclose a typical article on Australian Finance from the 'Financial Times' of 17th July. This sort of damaging article is appearing with great regularity in the 'Financial Times'-which, as you know, is owned by the Berry group, who should be open to reason about this sort of thing.

I have met and talked to Marr [19]-and I have in consequence some idea of your difficulties.

I am still learning to fly an aeroplane in odd moments but the difficulty is to get lessons without too big gaps in between. I landed a machine last Sunday for the first time-certainly with an instructor on board too-bounced heavily but I did no damage-and have had difficulty in not considering myself rather better than other men ever since, but I suppose this will wear off.

We have actually started building a house in Westminster. Acquired the freehold of the site a month ago and have just finished demolishing the old houses on it.

I am, Yours sincerely, R.G. CASEY

1 Permanent Under-Secretary at the Foreign Office.

2 Sir Maurice Hankey, Secretary to the Cabinet.

3 Bruce's cable to Prime Minister Ramsay MacDonald of 12 July 1929 (on file AA:A981, Defence 350, iii) urged 'most strongly ... that if any changes of consequence in Imperial Defence policy are contemplated, such proposals should be made subject to inquiry and discussion at a meeting of the Committee of Imperial Defence at which the Australian High Commissioner and his technical advisors would be present ...' 4 Lord Lloyd, High Commissioner for Egypt and the Sudan 1925-29.

5 See Letter 209.

6 In June 1929 the Egyptian Prime Minister, Muhammad Mahmoud Pasha, a nationalist who earlier had been exiled, opened negotiations with the new Labour Government. It was agreed, inter alia, that British troops would remain only in the Suez Canal area but the subsequent draft treaty was not implemented because of political instability in Egypt. See Letter 209.

7 Australian High Commissioner. Each year the Permanent Mandates Commission of the League of Nations publicly examined Australian representatives about Australia's mandatory administration of New Guinea and Nauru. Lacking a permanent representative in Geneva, Australia in the 1920s depended largely on the High Commissioners in London whose knowledge of the subject was not usually profound.

8 Major Osmond Fuhrman, secretary to Australian delegations to the League 1922-37, on occasions acted as a representative.

9 Casey was excessively optimistic. Partly because of Ryrie's poor performance, the Permanent Mandates Commission held over its report on New Guinea for 1929 until it had received more adequate information.

10 Chairman of several large firms, including the Zinc Corporation.

11 Lord Inchcape, partner in and director of many large firms, and Chairman of the P. & O. Line.

12 Company director and Chairman of the London Metal Exchange.

13 Including W.L. and Marshall Baillieu and W. L.'s son, Clive (the future Lord Baillieu), later Chairman of the Imperial Smelting Corporation.

14 Bruce had hoped for a royal message for release by the Governor-General stressing the importance of improvements in maternal and child welfare. Apparently it was thought that this would be more likely to rouse the interest and co-operation of Australian women than a letter carried by Dame Janet. See also Letter 193.

15 Lord Stonehaven.

16 J.H. Thomas, Lord Privy Seal and Minister of Employment.

17 Lord Kylsant, Chairman and Managing Director of several shipping companies, including the Royal Mail Steam Packet Co.

18 Lord St Davids.

19 Charles Mart, Assistant Minister and leader of the Australian delegation to the 1929 League of Nations Assembly.