(Due to arrive Canberra 10.5.29)

My dear P M.,

I gather from the Commonwealth Hansards that you have a new and
promising young firebrand in the House in the person of Beasley.

[1]

The Antarctic Expedition arrangements are going ahead fairly
satisfactorily, although with the inevitable squabbles between
your Committee in Australia and Mawson and myself here. [2]
However, we seem to be prevailing. I like Mawson much better on
further acquaintance, but he unfortunately has not the gift of
clearness of thought or expression which a scientific training
usually engenders. And, like most of us, he thinks he is a heaven-
sent business man, which I'm beginning to think is as common a
delusion as the widespread conviction that one has a unique sense
of humour.

According to an apparently inspired 'leak' from Washington, we are
to be faced by a lack of recognition by the Americans of some at
least of our Antarctic claims. This is rather worrying, but until
one knows more it is no use speculating about it.

I have always thought that this Australian Expedition should be a
two years' one-and I can only believe that it is the cost that is
frightening your Antarctic Committee in Australia. Actually, I
shall be surprised if the Commonwealth Government have to find
much more than 10,000 as their share of the first year's work,
and probably not more than 2,000 to 4,000 for the second year.

I am glad Wilkins [3] has given up his idea of his submarine polar
enterprise for this year at least. I have just had a long letter
from him in which he sets out his reasons for thinking that it is
a practical possibility and justified by the scientific results
that would accrue. However, his most useful role in the coming
Antarctic season is to try and complete his contemplated flight
from Graham Land to the Ross Sea-and to do so before Byrd [4] can
do it in the reverse direction.

He has written a most extraordinary article in one of the Hearst
[5] papers, in which he queries the validity of Antarctic claims
in general-ridicules the idea of anyone claiming territory by
having flown over it-and generally seems to have forgotten that he
accepted with enthusiasm the formal authority of H.M.G. to drop
flags and claim territory in the name of the King, prior to his
past season's enterprise.

He is coming to London shortly and I will have to have it out with
him and see where he stands before we suggest his being entrusted
with such a formal commission again.

The early stages of the election campaign are well under way. As
you will have seen, Lloyd George got in early with his panacea for
unemployment and it has, without doubt, created a great deal of
interest and attention and has apparently improved the outlook for
the Liberal Party. [6] By taking the floor with such a bold
gesture, he has put the other parties on the defensive and the
major part of the time and attention of Conservatives and Labour
have been directed towards exposing the fallacy of his proposals.

The 'Times' in particular, has devoted a number of leading
articles to this end (two of which I enclose).

Lord Grey [7] has given a qualified approval of Lloyd George's
'Pledge' [8]and I enclose his restrained and sober speech.

It is thought, however, in some quarters that Lloyd George sprung
his mine rather too early and that his thesis may be shot rather
too full of holes for comfort by the time of the election. Baldwin
[9] has rather held back and is not showing his hand for another
week yet. I understand that he does not propose to attempt to
produce such a succulent and attractive bait as Lloyd George-his
appeal will probably be more sober and less spectacular.

Some indication of the popular estimate can be had from the fact
that whereas about a month ago the Stock Exchange 'quotations'
were-Conservative 274, Labour 260, Liberal 62, they are now 280,
251, 85.

In looking through the Liberal Party's ambitious compilation
'Britain's Industrial Future', I think I have found the source of
inspiration of Davenport & Cooke's last critical pamphlet. [10]
The general tone of the Liberal Party's remarks on 'Imperial
Development' is very much the same as that of Davenport & Cooke.

The Liberal Party production says:-

It is often contended that by means of an enlightened policy of
Imperial Development we might find within the British Empire full
compensation for our trade losses in the rest of the world.

But it is necessary to guard against exaggeration. The above is,
in fact, a dangerous over-statement. Valuable as the Empire
markets are, their capacity for any greatly increased absorption
of British goods is limited in the case of the Dominions by their
small population.

Our trade with the Empire constitutes about one-third of our total
external trade. It is impossible for us to adopt any method of
Empire development which would involve placing barriers in the way
of the other two-thirds of our trade ... We still use the greater
part of our exported capital for Imperial development and this is
greatly encouraged by the privilege of having their stocks treated
as trustee securities which the Empire governments enjoy. In view
of the stringency of capital supply and our needs for home
development, the use of British capital for this purpose ought to
be supervised by a 'Board of National Investment'.

We cannot adopt any effective system of preferences without
greatly increasing the cost of living of our people and putting
obstacles in the way of our foreign trade; moreover, such a system
would mainly benefit the Dominions, not India or the other parts
of the Empire.

I see that S. Russell Cooke sat on some of the Committees of the
Liberal Industrial Enquiry that was responsible for the
publication of 'Britain's Industrial Future'.

You may remember that you wrote a letter to Mr. Baldwin when I was
in Australia asking if I might have facilities for approaching all
appropriate departments of H.M.G. in an effort to bring up to date
our knowledge of the Netherlands East Indies, and the Pacific
Island groups to the north-east of Australia. I have been
thrusting at this big subject for the last twelve months and have
sent out a good deal to fill gaps in our knowledge and files. I
have lately been attempting the much more ambitious task of
committing all the salient intelligence of this big area to map
form, and have had the cooperation of individuals in several
departments in the task. I hope to have a series of maps ready to
send out within a month. If, when they arrive, you could say a few
words to Henderson [11] as to their value as the basis of a system
of island intelligence, it would help things along. I will mention
in a personal letter when I am sending them.

There is no doubt but that this Intelligence side cannot be
regarded as satisfactory until the Defence Department gets to
Canberra, and there is close co-operation between the External
Affairs Department and the Intelligence Branches of the Army and
Navy. The External Affairs Department should be the father and
mother of all Intelligence-and the three offices should live in
each other's pockets.

Although I find myself almost continually submerged by work of one
sort and another (mostly inevitable but partly self-imposed) there
is not really very much of importance going on at present, and I
don't suppose there will be much this side of the election.

I enclose the 'Financial Times' summary of the terms of transfer
of interests of share holders of subsidiary companies to the
Merger Company. [12] I have a personal letter from Mr. Justice
Rich [13] by this mail. For your most personal information, he is,
I think, a little grieved that he has not yet been ennobled!-he
says-
Two of our members have received the K.C.M.G., Isaacs [14] in July
last and Duffy [15] this month. When in London I was amused to
hear from Duffy his congratulations to Isaacs: 'It should have
been all or none, the omission of the rest of us is a slight'-but
circumstances alter cases! Duffy, Powers [16] and I were appointed
in the same year within a month or two of one another, but I have
had the longer service as I was translated from the N.S.W. Supreme
Court after two years' service. [17]

Montagu Norman [18] gave a very confidential address to a select
audience of twenty or so men at the Foreign Office recently on
British financial and trade conditions. I hear that he assured
them that British banking and the 'money' trades were in good
order, but he drew a rather pessimistic picture of British
industry-as lacking imagination and drive. I hear from other
sources that he thinks that financially this is going to be a
disturbed year.

I enclose 'Times' report (10th April) of Duckham's [19] address to
the Royal Empire Society (ex-Royal Colonial Institute) on
Australia.

Cosgrave's Government is carrying on with a very small majority in
the Irish Free State, with the risk of an adverse vote at any
moment. [20] An election means the distinct possibility of de
Valera coming back with a majority. It is thought in some
interested quarters in Whitehall that the policy of pinpricks on
constitutional questions that the present I.F.S. Government has
adopted latterly towards H.M.G. springs from the initiative of
I.F.S. civil servants who see their way to killing two birds with
one stone-by providing ammunition which is not unwelcome
politically to the present I.F.S. Government, and by originating
material which would ingratiate them with a de Valera Government
if it came in, by showing their anti-British tone.

No one can tell, of course, what line a de Valera Government would
take. If they chose to have no dealings with H.M.G. but to abide
by the provisions of the Anglo-Irish Treaty, then no great harm
would be done-but if they went so far as to deny the Treaty, then
presumably H.M.G. must take steps to enforce its performance.

I am, Yours sincerely
R.G. CASEY