My dear P.M.,

I haven't had an opportunity to get any further ahead with the
enquiry into the effects of large scale finance and business on
international affairs. There are so few people whom it is worth
while approaching and these few are not easy to approach. The
Foreign Office notoriously has no economic knowledge and even
Tyrrell [1], I think, has no opinion that is worth while on the
subject.

I feel that there is a much better indication of the trend of
things to be had than that which I have already sent you. But it
is difficult to clear away the unnecessary detail and bite down to
the bone on the subject. The world has had sufficient experience
of these matters for there to be a tendency sticking out for those
to see who have properly trained eyes and brains.

If there are any other subjects of this or any other nature that
you would like to have some light on, I would be glad if you would
write me, as it is comparatively easy for me now to get in touch
with the right people in most lines of activity. I welcome such
missions as an antidote to the bald collection of information.

There is the awful tendency to develop into a paragraphist in this
job, which I fight against.

Poliakoff [2] came to see me yesterday for an hour. As you know he
is a Russian and has been Diplomatic Correspondent of the 'Times'
for four years or so. He is not a man that I trust, and yet I am
always glad of an hour with him as he is curiously stimulating. He
has a courageous (if irresponsible) penetrating but quite un-
English mind. The dangerous thing about him is that he quotes
people freely and is a born intriguer. But he has a most forward
thrusting mind which delights in dealing with the untrammelled
future.

I went up to Cardington to see the Government airship last week.

They think that it will put its nose outside for the first time
about 1st January 1929. The 'Burney' ship will be finished and in
the air within three or four months, they expect. I went up with
Sir Alan Anderson [3] and others.

Ray Atherton, Counsellor of the American Embassy, lunched with me
today. He has, he tells me, had two talks to Sir Hugh Denison [4]
who has an engagement to dine with the American Ambassador [5]
shortly. He asked me to dine too, but I thought it politic to have
another engagement. He says Sir Hugh makes no secret of his hope
that Australia will, on the representations that he will make on
his return, establish a Legation at Washington. [6] Atherton had
received the record from the State Department of Sir Hugh's talk
both to them and to the President, which I gathered was
essentially the same as Sir Esme's [7] despatch that I send you
under another cover. [8]

There is no doubt that the Americans are very keen that we should
establish a diplomatic post at Washington and that they should
then send an American Minister to Australia. Atherton and Houghton
always mention the subject when I see them. Atherton today went to
the extent of adumbrating about the type of man that they would
send to us, not an out-and-out commercial type who would be out to
make every post a winning post, but a man who would better
relations and understanding between the white races of the
Pacific.

Atherton says he is convinced that the United States before long
must revise her tariff policy. She cannot expect to receive
mountains of gold from abroad and, at the same time, practically
debar foreign countries from sharing in the internal trade of the
United States by a huge tariff wall.

He says that if he had to bet about the American Presidency he
would say that General Dawes (now Vice-President) had the best
chance.

I am told on good authority that Sir Horace Rumbold will go from
Madrid to Berlin as Ambassador to take Sir Ronald Lindsay's place,
and that Sir George Grahame from Brussels will go to Madrid. [9]

The discovery of oil in Iraq has brought about a situation of
interest. You know that the Turkish Petroleum Company was formed
as an international company to take over any oil discovered in
Iraq. The Anglo-Persian is the main shareholder, but the French,
Italians and Americans also have interests. The very rich oilfield
that has recently been brought to light in Iraq has necessitated a
pipe line to the Mediterranean. The question of the route that
this pipe line should follow is creating the interesting
situation. The shortest route is along the line of the old
incomplete pre-war Bagdad Railway to the Gulf of Alexandretta in
the French Mandated Territory of Syria. British interests want the
line to go through the British Mandated Territory of Palestine to
Haifa, which necessitates an additional 100 miles.

Whichever way the pipe line goes, it will necessitate the building
of a railway of some sort to transport the pipes. At the worst a
light contractors' railway which would be dismantled when finished
with, and, at the best a full sized railway that would remain.

Quite apart from the question of the pipe line, certain financial
interests in London, including Sir Albert ('Bertie') Stern,
Schroders, and others, have proposed a railway from Bagdad to
Haifa, which would connect up with future railways to be
constructed in Persia and so make the basis of a new land route to
India and the East.

To connect the idea of this proposed railway with the proposed
pipe line was obvious, and if the railway matures, it is thought
that the Turkish Petroleum Company would take a considerable
interest in it on account of the value to them of having a
permanent railway alongside their pipe line.

The people financing the railway will, of course, want proper
financial safeguards and guarantees of interest, etc. from the
Governments concerned -Iraq and Palestine-with probably an
overriding guarantee from His Majesty's Government. This is all
being lobbied in subterranean financial and Governmental cellars
at the moment.

The international complication arises out of the desire of France
on the one hand for the route through Syria and of Great Britain
on the other for the Palestine route. I believe that there are
minor intrigues going on such as the International Sleeping Car
Company having bought up all available shares in the old Bagdad
Railway at bargain counter prices, with the idea in mind of using
their efforts to get the pipe line alongside the Bagdad Railway.

I am, Yours sincerely,
R.G. CASEY