(Due to arrive Melbourne-24.4.26)

My dear P.M.,

INFORMATION LEAK RE NEW AUSTRALIAN SHIPPING SCHEME [1]

The investigation of this leak was taken up vigorously at this
end. Hankey [2] took the matter up with the Prime Minister [3],
who conferred with the Attorney-General [4], with Scotland Yard,
and the Home Office, and eventually had the Official Secrets Act
put into operation.

A representative of the Government, with a police escort, went to
the offices of the 'Daily Express' and demanded to know the source
of their information. They asked for a little time to consider
their position as the matter was by then some fortnight old. In
the meantime they sought the advice of Sir John Simon. [5] There
were several meetings and a great deal of talk about which I need
not worry you, except to say that, in the end, the 'Daily Express'
agreed to give the name of their informant if they were assured
that the Government would make no further investigations in the
matter as to any other go-betweens. The Prime Minister agreed to
this condition and the 'Daily Express' handed over to the
Attorney-General a letter containing the information, signed by a
man who turns out to be a clerk in the Treasury.

It seems a pity that the Prime Minister gave his word that no
further investigation would be made, as it has been found that
there is some individual or organisation which constitutes a pool
for illicitly acquired information of this sort. This pool
purchases information from certain spies, presumably in Government
offices, and sells this information again like any other commodity
in the highest market. Now that it is known that this pool exists,
every effort will be made to discover more about it. If the Prime
Minister had not given the stipulation that he did, no doubt the
defaulting clerk in the Treasury would have told everything.

I was able to do a little towards cleaning up the mystery through
the man whom I mentioned to you in my letter to you No. 264-Maundy
Gregory. [6] I set him on the track of what was wanted and he
produced some of the missing links in the story, which Hankey was
able to use with good effect.

The defaulting clerk in the Treasury admitted that he had been
responsible for leakage in connection with about ten other similar
incidents. His job was to collect the 'out' trays from the offices
of certain officials and distribute the documents either to the
Registry or to the individuals to whom they were marked. He is
apparently a man with a good memory and in the habit of reading
through such of these documents as looked important and memorising
their contents. I have not heard what his fate is going to be
although I expect he will merely be sacked and no further action
taken in order to avoid the public scandal that would result were
he to be prosecuted under the Official Secrets Act.

The whole story is going to be put before the Cabinet at an early
date. I don't think that it is going to be given any further
publicity.

One good effect that it is having is that all Government
departments are to be overhauled and made to take steps aimed at
the greater security of secret documents.

Later

A Cabinet Committee has been appointed to enquire into the
measures necessary to ensure the utmost secrecy in connection with
confidential documents, consistent with the expeditious conduct of
public business.

Your strong protest has had good effect, and already departments
are taking steps to put their own houses in order.

One lucky coincidence is worth recording, for your confidential
information. The Chief Clerk in this office was going home by tube
a few nights ago and was surprised to see the man next him reading
a copy of a secret document of which he was able to see and
memorise the title and the distribution number, and by which he
was able to identify it next day as having been issued from this
office to the Home Secretary. [7] Investigation showed that the
man was the latter's Private Secretary. He was summarily sacked.

It is a rule in this office that no officer leaves his room even
momentarily without closing the lids of the snaplock boxes in
which secret papers are distributed. One man went into another's
office a few days ago and found he was out and that some secret
papers were lying on his desk. He promptly put them in his pocket
and went back to his own office, kept the papers for two hours and
then (when the other man was in what the Irish call a 'sweat of
dread') returned them in a locked box to him, with a slip 'With
the compliments of the Editor of the Daily Express'!

One pleasant aspect of the whole pother is the voluntary statement
of a witness connected with the 'Daily Express' affair, that 'the
Cabinet Office and the Colonial Office are regarded as watertight
from the point of view of information getting to Fleet Street'.

I am, Yours sincerely,
R. G. CASEY