My dear P.M.,

I lunched today with Sir Alan Anderson [1] and hasten to send a
few lines to you on one of the subjects that we talked about.

He said that he had lately been rather struck by the suspicion
with which certain sections of the Australian public regarded the
steamship lines serving the Commonwealth. The debate on the want
of confidence motion in the House of Representatives regarding the
sale of the Australian Commonwealth Line had brought it again to
his attention. [2] He said that he imagined that, apart from the
quasi-monopoly that the P. & 0. Company had regarding Australian
overseas shipping, the unpopularity and suspicion was due to the
fact that the capital behind the lines serving Australia was all
held out of Australia.

He said that a somewhat similar position existed regarding the
Suez Canal prior to the acquisition of a 30% or so interest in the
Canal by the British Government. Even although the British
interest was insufficient to control policy, the fact of our
having a substantial interest and seats on the Board was
sufficient to dissipate criticism.

He said that the capital of the Orient Company was held as to
something just over 50% by the P. & O. Co. (or by Lord Inchcape
[3] personally, I don't quite remember which) and the remainder by
himself and his friends. He had made the suggestion to Lord
Inchcape that it might be a help towards a better feeling in
Australia on the subject if he (Lord Inchcape) were to make
available a parcel of his shares to the extent, say, of about a
third of the Company's capital to the Australian Government or
Australian interests. Lord Inchcape agreed.

Sir Alan thought that on the disposal of the Commonwealth's
interest in the A.C.L., a suggestion of this nature might have
some attraction. [4]

The shares in the Orient Company are not quoted on the Stock
Exchange, but an equitable value could be arrived at by valuation
of the ships and other assets.

He made the further suggestion, although in rather vague terms,
that it might be good policy for the Commonwealth Government to
participate similarly in the stock of the various other lines
trading with Australia.

I naturally made no comment on the above other than that it was an
interesting and rather novel suggestion.

The rest of the conversation was taken up with talk about lighter-
than-air transport, which is always of great interest to him, and
about the possible entry of the shipping companies into this field
in due course.

We also talked of the position of the Italian Flag Discrimination
[5] discussions and the efforts of the Orient Company to attract
migrants from Finland, the Scandinavian countries generally and
from Central Europe.

I am, Yours sincerely,
R. G. CASEY