(due to arrive Melbourne-22/8/25)

My dear P.M.,

I spent the last week-end at Lady Northcote's [1] place at
Eastbourne where she had an interesting collection of people. The
American Ambassador [2] and Mrs. Houghton, the Duchess of Norfolk
[3], Lord Darling [4], Sir Arthur Stanley [5] (brother of Lord
Derby), Lord and Lady Grey [6] 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 [7] and Bridgeman [8], although
of course the thunder is put into the latter's mouth by Beatty.

[9] 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 [10], Amery [11] I and,
to a certain extent, the Prime Minister. [12] 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 [13] 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. [14] 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 [15] 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 [16] 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 [17]
and Henry Wilson. [18] It is to be hoped that he is lucky enough
to get the loyal and efficient service of a General White [19] in
India.

The Armament at Singapore is still a subject of discussion at the
C.I.D. and Cabinet. Trenchard [20] 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 [21] 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 [22] 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 [23] about it occasionally,
and I gather that it is not heading towards any great
accomplishment. Halford Mackinder [24] seems to be considerably
overrated.

Hector Bywater (who wrote 'Seapower in the Pacific') has just
written an imaginative book 'The Great Pacific War' [25], 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.

Later

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