My dear P.M.,
I arrive here to find Hankey  very obsessed and worried over a subject which he says is giving him more concern than any other that he remembers -one, he says, about which he will resign his job rather than submit.
This is the question of the giving up of British belligerent rights at sea in time of war.
The brief story is as follows. As you know, the question of our 'right of blockade' ('freedom of the seas in time of war' as the Americans put it) has always been a thorn in the side of the U.S., who want the right to supply any belligerent with arms and supplies in time of war without the risk of their ships being held up by us. Great Britain, on the other hand, has always previously stoutly stood out for her right to stop and search any neutral shipping that she suspected was aiding her enemies. There are some who go so far as to say that our insistence on this right won us the war. Some nations have one weapon, some another-this is our weapon.
Chamberlain  told Hankey after the late Coolidge Naval Disarmament Conference  that it had come to his knowledge that the real reason why the Americans were so intransigent on naval disarmament was that they were determined not to be humiliated again by their lack of means of disputing our 'right of search' in time of war in which they (the U.S.) were neutrals. And that whilst we maintained our belligerent rights at sea, they were determined to go one better and at least equal us in strength in all types of ships. This is the voice of the 'big Navy' people in the U.S. It had apparently been put to Chamberlain that if we, on the one hand, were voluntarily to give up our belligerent rights, well then, we would find the U.S. much more accommodating in the matter of naval disarmament generally.
I understand from Hankey that Tyrrell  is convinced that we must give way to the Americans in this matter and that he thinks that, under present world conditions, our belligerent rights are of no value to us. Chamberlain, I gather, is not yet convinced, but he is giving it consideration and has already put the question up to Cabinet.
Hankey thinks we are emasculate if we give up this great weapon and he is prepared (for your very confidential information) to resign if it becomes H.M.G.'s policy.
There have been some articles in the Press lately touching on this subject, but the fact that it is being taken seriously by the Government is a matter of absolute secrecy. I have it very confidentially from Hankey, and I tried to draw Tyrrell about it today by asking if any efforts are going to be made to follow up the results (or lack of results) of the Coolidge Geneva Naval Conference-but he would not broach the subject at all.
I am going to Hankey this week-end and will learn more of this question, about which I will keep you informed as I imagine that it is a point on which you would feel strongly.
Yours sincerely, R. G. CASEY