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Reference to previous correspondence:       Kj^TJ 7^ ^"
With the compliments of h*- • covc&~ -
A copy has also been sent to Ak.*^*>^   J^^cr* t^' *
Dominions Offico, Downing Street,
rfS 3\JH^ 193
(RMS2I    Wt323l6/35M   5.000   2'36   H A Br Op6*0
(IIOOJO)   Wt lSj03/38j7   20.000(4) 7/3fl
No* 45.
WELLINGTON,
11th Hay, 1939.
Sir,
With reference to the last paragraph of your
secret telegram No. 49 of the 29th April, I have the honour
to report that on the 30th April I had the opportunity of a
few minutes1 conversation with Mr. Nash at the station
before his departure.     I asked him whether he could let me
have any information as to the defence proposals which he
was going to put forward on his arrival in London.     He said
that he had been conferring with the Deputy Prime Minister
and the Minister of Defence regarding the New Zealand
defence programme for the financial year 1939-40, and he
referred me to Mr. Fraser and Mr. Jones for further
¦
information.
2.     I accordingly saw these two Ministers on the day
after Mr. Nash's departure.     They told me that the defence
estimates were before the Cabinet and that no final decisions
had been taken:   no such financial decisions would, of
course, be possible until General Mackesy's report had been
received and it was also known what financial assistance
might be forthcoming in London.     They thought, however,
that they could furnish me with a memorandum giving some
information as to the defence expenditure, so far as at
present approved, for 1939-40 (and the items of Y/hich it is
composed), as compared with the expenditure during previous
years.     I gathered that a memorandum containing such
information
THE RIGHT HONOURABLE
SIR THOMAS INSKIP, C.B.E., K.C., U.P. ,
SECRETARY OP STATE FOR DOMINION AFFAIRS.
information was being prepared for Mr. Nash, and I said that
I would certainly be glad to be furnished with a copy of any
such memorandum, which would serve as the background, as it
were, of any specific proposals that Mr- Nash might put
forward.      I explained that I should also be glad of
information as to any specific proposals so that I could
communicate them in advance to the United Kingdom Government.
It would, I knew, be most useful to the United Kingdom
authorities to have such information before Mr. Nash arrived.
3. Mr. Jones received me on the 8th May and handed to
me the enclosed memorandum, explaining that a copy was also
being sent to Mr. Nash.     It will be seen that this contains
a review of the additional defence expenditure undertaken
during the last two or three years, but though it states
that some consideration has been given to the recommendations
of the recent Conference, it does not furnish any definite
information as to decisions reached, and, indeed, in the
circumstances could hardly be expected to do so.     Mr. Jones
explained again, as he had on a previous occasion, that, as
regards military expenditure, the Government would not be
able to arrive at any conclusions until they had received
General Mackesy's report.
4. I hope to see Mr. Jones again in the course of the
next few days, and I shall not fail to communicate without
delay any further information that I may receive.
I have, etc-,
(SGD.)      H. P. BATTERBEE.
High Commissioner.