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7th January, 1926

(Due to arrive Melbourne-6.2.26)

My dear P.M.,

I would like to draw your attention to a despatch from Berlin
(C.15928/459/18) that I send by this mail. It is of no immediate
importance, but is an interesting and penetrating analysis of the
German mentality by Addison [1], who is Counsellor at our Berlin
Embassy under D'Abernon. [2] You will find it a good print to
enclose in your week-end batch. Addison is one of the Cinderellas
of the Diplomatic Service, in that he is apparently under a cloud
for some reason. He is spoken of as one of the people who are very
clever, rather shamefaced and bedraggled in appearance, and who
never get beyond a certain stage in their careers. But he can
write, as you will admit, a very polished despatch when he likes.

2. I spent my Chrismas leave by having two days in Paris, six in
Coblenz, and a day each in Cologne and Essen. At Coblenz, I stayed
with Rupert Ryan (son of Sir Charles Ryan) who is Deputy
Commissioner of the Rhineland High Commission and an old friend of
mine. [3]
Germany is apparently going through a very bad time industrially,
as a reaction after her inflation and subsequent deflation. All
her industries (except those few with a flourishing export trade,
such as the electrical manufacturing industry) are short of money
and are finding difficulty in financing their activities, let
alone providing long-term credits. Even such hugh concerns as
Krupp's (which I visited) and the Badische Analin Fabrik are very
hard hit. Credit is available only at absurd rates such as 10-14
per cent. First mortgages bring similar returns. I understand that
very little English or American money is coming into the country
even with baits like this to attract it, as the conditions of
taxation are stringent and there is no fluidity-i.e. if you
foreclose you have the collateral security on your hands and no
ready market for it. I was told on good authority that a
widespread financial reconstruction and writing down will have to
take place in German industry before long, together with the
introduction of more attractive conditions for the entry of
foreign capital.

3. I am addressing a re-cyphered despatch to you by this mail on a
subject of great secrecy and, I think, importance. The subject is
rather an unsavoury one, but I don't think we can afford to let
any opportunity go by that promises to throw light on certain

4. I would draw attention to Amery's [4] paper (which I enclose
with another letter by this mail) on the next Imperial Conference.

5. It looks as if the Imperial Conference was destined to be in
October, as I am telegraphing you today. It is just humanly
possible that the Preparatory Disarmament Commission of the League
may have got far enough ahead with its work to justify the
Disarmament Conference being held before the end of 1926. This is
pure surmise; the F.O. can't even guess if the Disarmament
Conference will take place in six months' time-or at all. But it
would be a very well worth while trip for you if you could combine
an Imperial Conference, League Assembly and the Disarmament
America's probable participation in the meeting of the Preparatory
Disarmament Commission at Geneva in February is a surprise to
people here. It has become the thing to say that opinion in
America is swinging round towards greater sympathy with Europe in
this last six months. Personally I think that any slight
alteration in the American outlook as regards Europe is explained
by Belgium and Italy having fixed up their debts-coupled possibly
with Locarno.

6. I met Gordon Canning [5] in London about six months ago. He has
come into the limelight lately owing to his having been the
vehicle and mouthpiece for Abd el Krim's 'peace' terms to the
French. [6] He has a shifty eye and is, I think, not altogether a
disinterested peacemaker. At a small Group meeting at the British
Institute of International Affairs, I saw a very heated exchange
of words about Morocco between Canning and Sir Malcolm Robertson
[7], who had just come back from being H.M.'s diplomatic
representative at Tangier. Canning combines journalism with
gentlemanly adventure-he hasn't any major virtues or vices to
recommend him, probably a reasonable mental equipment, certainly
not an outstanding fellow.

7. Beaverbrook's [8] small book 'Politicians and the Press' was
published at Christmas. The numerous reviews echoed one's own
impression that he very much over-rates the political importance
and influence of the Daily Express. The Punch comic review of it
is quite entertaining, after you have read or looked through the
book itself.

I am, Yours sincerely,

1 Replete with French and English literary allusions, the dispatch
of 14 December 1925 (in PRO:FO371/10747) assured Chamberlain of
majority German support for Locarno, observing that 'it [should]
be a subject of congratulation and some surprise that the major
part of the nation should be found on the side of common sense'.
Joseph Addison was appointed Minister to Latvia in 1927, Minister
to Czechoslovakia in 1930 and was promoted K.C.M.G. in 1933.
2 Lord D'Abernon, Ambassador to Germany 1920-26.
3 See notes 10 and 11 to Letter 34.
4 Leopold Amery, Secretary for the Colonies and for Dominion
5 Captain R. Gordon Canning acted as a private individual and not
on behalf of the British Government, and was accused by the French
press of working for personal profit, though this was never
6 In 1921 Abd el Krim, a Riff chieftain, had defeated Spanish
forces at Anual in Spanish Morocco. Subsequently he came into
conflict with French forces pushing into the Riff of French
Morocco and it was only when Marshal Petain was sent to take
command that in 1926 he was defeated by a joint Franco-Spanish
7 British Agent and Consul-General at Tangiers 1901-25. In 1925 he
went to Argentina as Minister, becoming Ambassador in 1927.
8 Lord Beaverbrook, proprietor of the Daily Express, the Sunday
Express and the Evening Standard. His book was Politicians and the
Press, Hutchinson, London, 1925.

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