(Due to arrive Melbourne-5.9.25)

My dear P.M.,

The inner history of the final stages of the Coal dispute [1] was
as follows. The men and the owners both stood firm up to the last.

A special Cabinet was held 24 hours prior to the date of the
owners' lockout notices maturing and the whole position was
reviewed. They decided that both the press and public opinion
generally throughout the country was against a strike. There was a
feeling in the Conservative ranks that there was something in the
miners' case and it was not thought to be politically wise for
H.M.G. to take no action in the matter, which would be tantamount
to putting themselves on the side of the owners.

The Railway and Transport Workers had agreed to throw in their lot
with the miners with funds as well as by means of what amounted to
a sympathetic strike, so that the civil dislocation would have
been very severe.

Figures had been prepared by H.M. Departments that indicated that
the loss in revenue and on the part of the business community
would have been of the order of 70 millions for a three months'
stoppage, and that this approximate rate of loss would have been
an increasing one.

I learnt from the records of the various discussions on the
subject of the existence of a 'Strike Book', on the same lines as
the 'War Book'. Arrangements are all made and pigeon-holed for the
carrying on by emergency assistance of the vital services of the
country in such a strike period. The country is divided up into 11
districts, and the feeding of the people, distribution of mails,
transport of goods and personnel are all provided for. The
existence of these arrangements is, of course, kept very secret. I
had hoped to get a copy of this 'Strike Book' for you from Hankey
[2], in order to show you the sort of arrangements that they have
worked out, but I find that the numbers are strictly limited to
those few people who have to be in possession of the full scheme.

Reverting to the 'Strike' Cabinet meeting on 30.7.25. It was
decided to offer to the owners and to the men a full enquiry which
it is estimated would take about nine months, and that H.M.G.

would 'assist' (not 'subsidise', an unpopular word) the industry
to the extent of paying the difference in the men's wages between
what they are now getting and what the owners say they can afford
to pay without loss. I understand that this is calculated to be
about 10 millions.

I understand that the Chancellor of the Exchequer [3], and others
of the Cabinet in touch with the business community, have reason
to think that a revival of trade conditions in this country's
favour is beginning, and it is hoped that, if this crystallises,
the coal trade may revive in sympathy and possibly the present
wages be maintained. However, this is really undiluted optimism.

So ends, temporarily at least, what might have been a bad setback
for this country.

The suggestion that Beatty [4] should go to Canada as the new
Governor-General is thought by Sir Campbell Stuart [5] to be
impossible, in view of the fact that Lady Beatty was an American,
added to the circumstances of her divorce and re-marriage to
Beatty, which he thinks were such as would shock the
conventionally-minded Canadians.

I have read a certain amount of what has been written by people
whom the Fighting Services delight to call 'irresponsible
publicists' on the Pacific questions, and I am attempting to
arrange with Admiral Field [6] to be given opportunity in the next
few weeks of taking up some of the time of one of their experts on
the subject, in order to get my ideas into line with the official
Admiralty views.

As another silly season subject, I hope to waste some of the time
of some of the Air Ministry people on finding out how they would
propose, if they had the run of their teeth, to defend Australia
from the air. I have already had a talk to Sir Hugh Trenchard [7],
who, of course, is all for it! I will, of course, be propaganded
at for all they are worth, but as long as one realises it, it
can't do any harm, and I may learn something from it.

In conversation with Trenchard, he seemed a little grieved at the
fact that none of the Dominions had ever yet invited a Senior Air
Force Officer to visit them and discuss their Air Force or Air
Defence generally in the same way as Kitchener, Jellicoe and
others had done in the past from the Army and Navy point of view.

[8]

His ideal is that eventually there will be an Imperial Air Force
run on much the same lines as the Navy, with Far Eastern, Indian,
Near Eastern and Mediterranean Air Fleets. Units would be mobile
and would be moved about in the same way as fleet units are now
moved. He deprecates the permanent telling off of a certain air
unit or formation to the specialised defence of a certain area.

He was good enough to offer all facilities for me to pick the
brains of himself and his staff. I am going to take advantage of
this and will probably write you pretty fully in the course of the
next month or six weeks. I will not tread on the toes of our
Liaison Air Officer at the Air Ministry. I know him and have
discussed the subject with him.

Chamberlain [9] goes to Geneva in September but only, I hear, for
about a fortnight. I understand that his presence there at all
Assembly and Council meetings is having a very good effect. It
practically ensures that everyone else send their foreign minister
and so must raise the tone and authority of the meetings and help
League prestige along. I hear that it is very possible that
Stresemann [10] will be asked to come to Geneva in order to talk
to Chamberlain, Briand [11], and the Belgians about the Pact.

I expect you know that there is an undercurrent going on all the
time here aiming at the reform of the House of Lords. In the House
of Lords, Lord Selborne [12] is the moving spirit whose point of
view is that if they don't reform themselves and get public
opinion more on their side, they may find themselves shorn of some
of their few remaining powers by some future ultra-democratic
Government. However, I don't think there is much force in the
movement and there is so much else to occupy people's thoughts
that they look rather bored when Lords reform is mentioned.

The article 'Arbitration Laws in Australia' in the 'Times' of 6th
August was, I understand, from Lazarus [13] of Melbourne
University. He seems a brightminded individual and has, I know,
ideas of doing something more with his life than spend it in a
University. He may go towards journalism. Possibly politics might
interest him if his thoughts were shaped in that direction.

The last Cabinet for some time takes place next week. After that,
Hankey goes to South Wales for three weeks and then to Italy for a
month. The majority of Ministers disperse next week. The dog days
are about to begin.

With best wishes, I am, Yours sincerely,
R. G. CASEY