(due to arrive Melbourne-22/8/25)
My dear P.M.,
I spent the last week-end at Lady Northcote's  place at Eastbourne where she had an interesting collection of people. The American Ambassador  and Mrs. Houghton, the Duchess of Norfolk , Lord Darling , Sir Arthur Stanley  (brother of Lord Derby), Lord and Lady Grey  and Ray Atherton, First Secretary of the American Embassy.
Houghton is an elderly, stout, keen-minded American with a commercial training and distinctly humorous mind. He is an hereditary glass manufacturer and, prior to his recent three years in Berlin, had had no diplomatic training (I understand that just about half of the heads of American missions abroad are diplomats de carriere). I should gather that he is very typically American and has almost a middle-west attitude towards England and Europe.
He is a little contemptuous of the post-war struggles of this country to get on its feet again, which rather gives one the first impression of his being anti-British. In his early days he was educated at a German University which, coupled with what I always regard as a distinct similarity of outlook between the American and the German, makes him talk about Germany with a sympathy and understanding which is lacking when he talks about France or this country.
Houghton starts off his argument with I think a statement of fact, that the individual in the United States and in Germany is putting out more mental and physical effort than his 'opposite number' in Great Britain. Is England, therefore, to be ground between the upper and nether millstones of the United States and Germany? He obviously does not yet understand this country and rather impatiently criticises our unemployment and the efforts of H.M.G.
to encourage industry and stifle the subversive efforts of the left wing of labour to make trouble.
He made one or two jesting remarks to the assembled company about his pleasure at noticing distinct signs of efforts on the part of scions of an effete aristocracy to justify their existence, which naturally did not bring very much applause. In the silence following one of these remarks his wife said 'I am afraid that one did not get over too well' to which he remarked 'Well it amused me, anyhow'.
Lord Darling of course is the 'jesting judge' in Peer's clothing.
He is a thin, rather apologetic and ferret-like little man, who tells a lot of stories and makes a lot of little jokes.
The major event of this last fortnight has been the boiling up of the crisis between the Admiralty and the Treasury on the supplementary cruiser construction programme. This is one of the many things which should have been settled very much earlier in the year, but which by common consent they have allowed themselves the luxury of including in the July scramble which, I am told, always takes place. It is developing in its later stages into a personal struggle between Winston  and Bridgeman , although of course the thunder is put into the latter's mouth by Beatty.
 The story goes to you in a letter from me by this mail and also in the cables which we have exchanged. All the Cabinet were for Winston with the exception of Balfour , Amery  I and, to a certain extent, the Prime Minister.  The issue has been made a major one and the air is full of talk of resignation of the whole Board of Admiralty on the one hand and of Winston on the other. As you will know, the Sea Lords are not allowed to threaten their resignation, but in spite of this they have let it become known that they intend to stand or fall by their recommendation.
I saw Admiral Field  on the subject of the feeling that would be raised in Australia by the failure to lay down any cruisers this year. He was very distressed by the fact that if such an eventuality came about, you would naturally consider yourself 'let down'. Apart altogether from the lowering of the standard of Imperial Naval Defence, he (and Beatty) was very worried about the reaction in Australia (and to a lesser extent other Dominions) to the slackening of effort, which would become evident through the Press however well camouflaged. You will know the subsequent story of this very controversial subject by the exchange of cables.
I have reason to suppose that your strongly worded telegram was particularly opportune and was a very useful club for Amery to shake.  An incident such as this shows pretty clearly how Australia stands with this country. They start to slack off a little on Imperial Defence. We become sensitive at once and afraid that our interests are being overlooked. Singapore was one instance, this cruiser programme is another. Apart from the use of such incidents for party ends, are they not useful in indicating to our anti-imperialists the necessity for crowding in closer to the centre rather than flinging off on our own?
Parliament rises on the 8th August unless an extension of a week is decided upon. As you know they will probably meet again towards the end of October for an autumn session. The majority of Ministers and people of importance in the various departments are making plans to leave their offices within a week of Parliament rising. I am assured that from the middle of August until the end of September the whole place is rather in the doldrums. However, I expect that I shall be able to find plenty to do in catching up with back reading and with supplying Henderson  with files of information about the countries which are not at the moment occupying the public eye and which in the ordinary course of events I do not get an opportunity of covering.
I saw Sir William Birdwood  yesterday and had a few words with him prior to his leaving for India as C-in-C. He goes to a big job in which he may possibly not have the entire support of the military hierarchy. He is very popular with, I am told, the great part of the army, but he represents the Kitchener or non-Staff College section, and is outside the War Office Military trade union, which I believe is, or was, represented by Rawlinson  and Henry Wilson.  It is to be hoped that he is lucky enough to get the loyal and efficient service of a General White  in India.
The Armament at Singapore is still a subject of discussion at the C.I.D. and Cabinet. Trenchard  is still putting forward his theory of wanting to defend the Naval Base from the air. He is politely laughed to scorn by Beatty and Cavan  who say, probably very rightly, that this is no time or place for experiments. Trenchard has some vague scheme of basing his heavy bombing machines and torpedo carriers at some point far distant from Singapore, possibly as far back as India, at any rate Burma.
Fortunately he has very little precedent to go on and his technical advisors are loath to commit themselves as to what results they can guarantee with a certain sum of money. However, Hankey  does not consider that armament over 9.2" is of very much importance at the moment. The amount of money locked up in the proposed 15" guns with their heavy concrete foundations, power plants and machinery to handle them and personnel to serve them is very great.
Although I haven't been able to follow the work of the Imperial Economic Committee, I talk to Ritchie  about it occasionally, and I gather that it is not heading towards any great accomplishment. Halford Mackinder  seems to be considerably overrated.
Hector Bywater (who wrote 'Seapower in the Pacific') has just written an imaginative book 'The Great Pacific War' , copy of which I am getting and which I will send out to you soon. He knows this subject pretty well, and I believe it is quite entertaining.
I enclose copy of the cruiser announcement that the P.M. will deliver in the House of Commons this afternoon. I have to send it with some blanks as the figures will not be ready to fill into the draft until too late for my mail.
I saw Amery last night and he was quite jubilant about it. He said that your telegram was of 'the greatest possible value'.
Hankey tells me since that it was quite on the cards that he (Amery) would resign, if the decision had gone any less favourably to the Admiralty. Your telegram was worth, I think, at least one cruiser!
I am, Yours sincerely, R. G. CASEY