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the latter grising they have learnt the hunger strike and satyagraha tactics 18p Kashmir bedevils relations between India and Bakistan, and feeling in from India; and will use them. The sequence of events is likely to be a (representative) meeting called by the Pakistan Prime Minister to decide the country's policy; a meeting with Nehru which Mohamad Ali thinks will fail; a fresh appeal to the Security Council; and, if that renews the suggestion for a plebiscite, a possible appeal to the United Kingdom and Commonwealth to arrange ways and means of seeing it through.
19. There is nothing to report about Ceylon. As long as the present Government survives they will I believe retain their allegiance to the Crown.
20. There is clear evidence that in all three countries the use of the English language is deteriorating. If the tendency continues our general influence and our commercial interest will suffer. The British Council is effective, and I was impressed by its efficiency-particularly so in Karachi and Bombay.
21. A few more men and women capable of instructing teachers of English would pay a handsome dividend.
NEW ZEALAND.
22. I had not realised until I saw it the extraordinary richness of New Zealand's grass lands. Farming is at a high standard and increasingly scientific. Much use is made, for instance on the sheep pastures of top dressing from the air with super-phosphates and any chemical elements in which the soil is deficient. The existing areas in cultivation and grazing will show a steadily increasing output although shortage of labour on the land will be a limiting factor until there is a recession in secondary industry and unemployment in the towns.
23. There is a large area of potential sheep land still under native bush and reclamation is proceeding fast. The trees and scrub are cleared and within three years the grass is sufficient to carry two or three sheep to the acre.
24. From improvement of existing grassland and reclamation, New Zealand will shortly have a larger exportable surplus of wool and mutton and, to a lesser extent, milk products and butter and cheese.
25. Industrially, the island is not so well placed. There is coal, and power can be generated from rivers and geo-thermal steam. One real asset is timber and its availability for conversion into paper and pulp. It has been found that on the previously wasted acres of pumice land conifers will grow in profusion. As soon as the forest is cleared natural regeneration clothes it with thick woodland. The first large processing plant is about to come into production and pulp, paper, plaster-board and the like will soon be a considerable dollar saver and will later provide an increasing income from overseas. There should be a good return on British capital invested in this enterprise.
26. There is an attempt, particularly in Auckland which is a rapidly growing city, to establish secondary industries. This is partly pride. The New Zealander likes to think that what others can do he can do as well, but it is also to try and save foreign exchange and reduce the effect of isolation in a future war. Some industries will establish themselves and will be permanent assets but those which employ a lot of labour cannot be really economic.
27. On top of high wages ruling in war time, the wage structure was further distorted by the boom in wool which accompanied American stockpiling in Korea. On top of that again, the Government has pursued an all-out programme of building under the broad heading of the "Welfare State" so that there has been an unrestrained scramble for labour and materials. Wages are very high and the output from industries, other than those with great natural advantages such as paper and food processing, cannot be competitive in world markets. Meanwhile the import bill rises.
28. If primary produce prices hold and markets can be extended into Indonesia, Malaya and China, the balance of payments may not deteriorate too far or too fast but it is doubtful if the people understand the precarious position and the Government show little inclination to make them face up to realities.
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