My dear P.M.,

I had a long conversation with Sir Hugh Trenchard [1] this week.

He regards his struggle with the Admiralty quite philosophically.

He doesn't think he can win any definite and dramatic battle with
the Admiralty on the question of air power versus ships or fixed
coast defences, as they would never admit defeat. Also the Navy
are politically much more powerful than the 'upstart' Air
Ministry, and the country and Parliament would never let the Navy
be worsted. But he does think that he can push the Air case slowly
and surely. He had a partial victory over Singapore. He has had
what he refers to as a distinct victory over the defence of Aden,
which has now been handed over to him in its entirety. The fact
that his statement on the value of aircraft in coast defences is
to be sent officially to South Africa, together with the 'routine'
remarks of the Admiralty and the War Office, he regards as an
advance. He thinks that the force of his remarks will be
acknowledged in South Africa, even although he cannot get them
admitted here.

To quote him on an important subject: 'I don't say I can replace
the fleet, but I do say that I could show how Australia could be
defended principally by aircraft-and I'd give a great deal to be
able to demonstrate it.'

He is delighted that you have asked for a Senior Air Officer to be
sent to you on a visit. [2] For domestic reasons it is apparently
very difficult for him to spare Sir Geoffrey Salmond [3], Sir
Edward Ellington [4] or Vice-Marshal Tom Webb Bowen [5], but he
hopes that his Secretary of State [6] will let Sir John Salmond
go. He is at present commanding the Air Defence of Great Britain,
is a great name and a great figure in the Air Force, and I should
think would do you as well, if not better, than the others. Hoare
is away for a week but a decision will be come to on his return.

On the whole question of Air power versus ships and versus fixed
gun defences, I think that there is a great deal more to be said
for the Air point of view than the departmental loyalty of the
Admiralty and War Office will let them admit. But it is a question
that does not lend itself to convincing proof either way, in peace
time, so that it necessitates the gradual and slow accumulation of
experience as to what the Air are likely to be able to accomplish,
in order to alter, with economic benefit, the proportion of
responsibility that each of the three arms has to carry in its
particular sphere.

It does not appear to be worth while staging any sort of
competitive physical demonstration under peace conditions, as one
side would never be convinced by the other, and it would merely
lead to more undignified wrangling and argument as to how far
short the demonstration was of war conditions.

We-all of us, I think-have our blind spots-inherited or
preconceived ideas on which we brook no argument-mental Monroe
doctrines [7]-'Keep off or be blown off'. We illogically see red
when they are questioned and we lose our sense of humour and our
judgment.

However, as far as we are concerned in Australia, it would seem
that we are so remote from a war in which the Empire will be
engaged, and in any event so remote from anything more than
raiding, that we can afford to wait at least five years before we
spend much money on our coast defences. And by that time the
position of Air versus the rest may be clarified a little.

Hankey [8] is still pursuing the question of our belligerent
rights at sea. It seems now quite certain that for some reason or
other Chamberlain [9] experienced a volte face in his opinions on
this subject. Hankey himself is tending more and more to thinking
that it would be a mistake to make any advances whatever on the
subject to the Americans, and he thinks it possible that this
point of view may prevail.

I send you in another letter this week copy of the 'Gillman'
Report on the Defences of Singapore. All that you really need know
about this is that Lieut.-General Sir Webb Gillman, with two other
officers, was sent out to Singapore last year to review the scale
of defences decided on by the Committee of Imperial Defence.

Gillman now reports that, in his opinion, the proposed scale of
defence is more than is necessary: in other words, that we would
be over-defending the Base if we went on with it on the C.I.D.

scale. The C.I.D. scale of defence, of course, was based on the
Admiralty's assertion as to the possible scale of attack by the
Japanese, and, therefore, it is really this scale of attack that
Gillman criticises. The C.I.D. are to re-consider the whole matter
next week and, if the Admiralty are still firm in their
convictions that the Japanese may possibly risk everything in a
full scale attack with warships-then, of course, the present
proposed scale of defence will probably remain as it is. There is
no need for you to read the document itself, as it is typically
tough and dull.

Hankey lunched recently with Sir John Cadman, the Chairman of the
Anglo-Persian Oil Company, and was much impressed by the enormous
scale of the Company's business. They employ 17,000 men in and
about their oilfields in South-Western Persia and have an office
in London like a small Government Department. The real skeleton in
their cupboard is the fact that their concession only has 35 years
more to run, after which the whole business under the present
agreement becomes the property of the Persian Government. It is an
immensely valuable field and its life is far beyond the 35 years
of their concession. Their policy is that they are awaiting the
first really favourable opportunity, when they will make efforts
to induce the Persian Government to review the agreement and give
them a much longer term. Cadman confirmed what I told you recently
that a wonderful oil-producing field has been discovered in Iraq.

The Anglo-Persian Company have a considerable interest in the
Turkish Petroleum Company which is exploiting this area.

The arrangements for the equating of supply and demand of material
in a war in which the Empire may be engaged has been a major
occupation of the Committee of Imperial Defence for some years. We
have a committee in Australia which is studying the subject from
the Australian point of view. I send copies this mail of a most
useful lecture on the subject by Major Ismay [10] (who deals with
it on the C.I.D.) to the Imperial Defence College. It is a very
dull, but important, subject. If you want to know anything about
it, which I doubt, you might glance through this paper. In any
event I am sure the paper will be of value to the Defence
Committee that has this subject under research.

Ships' libraries are usually of the same order as ships' doctors.

Would it not be a good thing for the Commonwealth Government to
ask the Professors of History and English Literature in the
Universities of Sydney and Melbourne to collaborate in the
production of a list of (say) 50 books to embrace all important
aspects of Australian life-and then to forward this list to all
the shipping companies carrying passengers to and from Australia,
with the suggestion that such of these books as are not already in
their ships' libraries should be added to them? Let the list
include historical novels, brief histories of Australia, topical
books descriptive of the life and industry of the country, as well
as Government publications-the latter being supplied free of
charge in suitable binders. Let the shipping companies paste
inside each book a slip saying that the book is one of a series of
representative Australian books selected by competent authorities
under the auspices of the Commonwealth Government. Many thousands
of intelligent travellers would bless you-and you would give our
industries and the country a little advertisement that might well
do some good.

A doctor, who is a friend of mine, tells me that the ex-Kaiser
took the Voronoff treatment (grafting of monkey gland) last year.

He tells me that it has a remarkable rejuvenating effect but that
the patient usually burns himself out in a very few years. New
wine into old bottles.

A rather weird story comes from Budapest in this connection-of a
man who underwent the Voronoff gland grafting after taking out an
annuity policy with an insurance company. The company refused
payment of the annuity on the ground that he had undergone an
operation which had made him definitely younger than he was when
he entered into the annuity contract with them. The case is being
heard-the man's plea being that everyone must be expected to take
advantage of every discovery tending to prolong life.

There isn't much to say about the sale of the 'Daily Telegraph' by
Lord Burnham to the Berry group. I have heard it said that he
wanted to divest himself of the paper so that he could with
greater freedom be available for a Governor-Generalship, but I
don't know that this is at all reliable. He has certainly been
interesting himself more deeply in public affairs these last
several years. In other quarters one hears merely that he was
offered such a large sum for his paper that he couldn't refuse it.

I hear that pressure is steadily being kept on the Prince of Wales
with regard to his marriage. There is some little anxiety, I
believe, with regard to the amount of heart that he would find
himself able to put into it-as it would, of course, be a mariage
de convenance. A subsequent scandal would be almost as bad as if
he had never married.

There have been no developments yet regarding the question of the
coordination of intelligence in the Far East. I will let you know
as soon as there is anything to say. I am not particularly
impressed with the organisation of our intelligence throughout the
world. The scheme is pretty thin in most places, I think.

I talked yesterday to the Director of Plans at the Admiralty. You
may remember that you said to me before I left that you were
rather mystified that the Admiralty had shifted their enthusiasm
from Port Darwin to Albany. Captain Egerton says that this is not
so as far as they are concerned. Darwin remains in their minds the
essential complementary opposite number to Singapore from the
naval anchorage and oiling point of view. Albany they consider
only of interest from the point of view of a useful rendezvous
anchorage for convoys, transports and merchant vessels in time of
war.

Egerton thinks that the threatened American big naval construction
programme will not eventuate to any extent. He foresees another
Naval Disarmament Conference in the next few years, the agenda of
which will be much more thoroughly thrashed out through diplomatic
channels beforehand. He thinks that this is the way to do it-you
can't discuss these big questions in public.

I have been looking for an opportunity for some time to write a
personal letter to Sir William Glasgow [11]-this occurred last
week. I made mention of the controversial question of air power
versus fixed coast defences and referred to the forthcoming South
African Coast Defence Report. I then went on to say what the
letter was really about-which was the question of my concerning
myself here with Defence matters. There are, as you know, the
three Australian service liaison officers here, who keep touch
with the three fighting service departments. [12] They do not,
however, except in isolated instances, see C.I.D. documents, nor
really, I imagine, hear anything of the high policy of Imperial
Defence. On the other hand, I see all these documents and can and
do talk to Hankey, and at times the service departments, about
them. The high policy of defence works in very closely with
foreign policy and I consider it is part of my job to keep touch
with defence to this extent. However, I don't want to tread on the
toes of the Commonwealth Defence Department or of the three
liaison officers in London. So I wrote to Sir William to explain
to him the extent to which I deal in Defence matters.

Amongst the Communist papers going to you this week, there is a
copy of a letter marked 'C', with regard to wages and conditions
in the coal mining industry in Australia, that I think you should
read personally, as it sums up the position authoritatively and
well.

Mackenzie King [13] recently made a public denial of the statement
that his Government were in course of negotiation with the
Japanese for the mutual exchange of Legations to each other's
capitals. His point-blank diplomatic lie surprised those who knew
the facts and, most of all, the Japanese. He is negotiating hard
to bring about the exchange of Legations but up to the present the
Japanese have not shown themselves particularly keen-they demur a
little on the score of expense. [14]

It seems to me that the establishment of direct diplomatic
machinery between Canada on the one hand, and France, Japan and
America on the other, cannot but alter the status of Canada vis-a-
vis the Dominions Office. Is not the next move likely to be that
Canada will want to talk direct to the Foreign Secretary and the
Foreign Office on Foreign Affairs, and not through the
interpretership of the Dominions Office? I flung this off at
Tyrrell [15] this morning with the result that he made a grimace
and asked me to lunch next week!

The American draft of the proposed renewal of the Anglo-American
Arbitration Treaty goes to you amongst the Foreign Office print
this mail. It is a dull document and I should not worry about it
at this stage.

I am, Yours sincerely,
R. G. CASEY