Civil Aviation 1. In view of the opposition of the United States and Soviet Russia, and apparently of China also, to the establishment of an International Air Transport Authority to operate international air trunk routes and to own the aircraft employed thereon, it seems likely that the principles enunciated in the Australia - New Zealand Agreement, January, 1944 , are not likely to be accepted as a common objective of the United Nations. The Australian Government has accordingly given consideration to the alternative stated in Clause 22 of the joint agreement. A plan  embodying this alternative, but modified in certain respects in order that it might be generally acceptable to all British Commonwealth countries, has been prepared and a copy of this plan was forwarded to you on the 22nd of September in response to your telegram No. 165  of the 18th of September, 1944. It is understood that the plan is favourably regarded by Lord Beaverbrook, Chairman of the British Cabinet Committee on Air Transport. The Hon. C. D. Howe was also in complete accord with the proposal but considered that instead of a British Commonwealth Corporation operating the Commonwealth strategical services, each Empire country should have the opportunity of operating the Empire service across its own territory and, in addition, across the ocean adjacent to its own territory, the routes and schedules of these services to be decided by the Commonwealth Governments in consultation. Howe, nevertheless, expressed the view that the Canadian objection to the Australian plan should not jeopardise the plan in any particular.
2. The Australian Government, on reviewing the whole problem, reached the opinion that the following four steps should be taken:-
(1) The restoration of the Empire service between Britain and Australia by the Mediterranean and India or Ceylon.
(2) The establishment of a service across the Pacific Ocean to Canada, there to link up with the Canadian internal service and the Trans-Atlantic service operated by R.A.F. Ferry Command.
(3) The holding of a British Commonwealth Conference to determine a plan for Commonwealth services between Empire countries.
(4) Concurrently with the foregoing steps, all Commonwealth nations should be urged to make the strongest possible representations to the United States Government, emphasising the need for the holding of a United Nations Conference without delay in order to secure the greatest possible degree of understanding and to lay down a basis of co-operation in respect of international air transport services; and also to reach agreement upon the constitution and functions of an International Air Transport Authority. 
8. The view of the Australian Government is that any plan evolved should provide for the inter-linking of Commonwealth countries with services for the conveyance of passengers, mails and freight and also for the maximum co-operation obtainable in the operation of such services, including the use of all facilities in all Empire countries on the same terms as they are available to airline operators operating internal services. The Australian plan referred to above and of which copy was sent to you, will provide at least a starting point for these discussions.
9. Those services, in addition to catering for the Governmental, commercial, industrial and social needs of the British Commonwealth, will do much towards vitiating the former feeling of distant isolation experienced by individual Empire nations.
Properly organised and conducted, Empire air transport services will, in time, engender among the constituent parts of the British Commonwealth the same feeling of contiguity as is now enjoyed by distant States in the federation of the United States.
10. The British Commonwealth Conference in addition, should endeavour to formulate a policy and define objectives acceptable to all Commonwealth countries for the provision of services with non-Empire countries. The aim should be to evolve a formula which would expand the pattern for inter-Empire services to all foreign countries willing to participate. The arrangements entered into would be with the Commonwealth countries as a whole and not with individual Empire countries.
11. Such a step would, it is thought, discourage the attempts being made by the United States to deal with Commonwealth countries individually and even with other countries and might encourage the seeking of a formula by the United Nations as a whole for the operation of international services. So much ground has been lost through the continued deferment of the proposed United Nations Conference and the activities of the United States administration meanwhile, that unless the British Commonwealth has some concrete plan for the operation of its own Empire services and of external services with other countries on a non-exclusive basis, there will be little hope of co-operation in international air transport except in its technical aspects.
12. The fourth step urged by the Australian Government reiterates the common objective stated in the joint agreement of January, 1944. Our view is that, notwithstanding any plan that may be prepared in the meantime by Commonwealth nations as a safeguard against failure in whole or in part in international negotiations, the most strenuous endeavours must be made in order to reach an understanding among the great nations, both as a security measure against the possible misuse of civil air fleets in the future and also in order to obviate as far as may be possible the disastrous effects of unregulated competition in a race to become predominant in the air commerce of the world.
13. We would be glad to have your views on this alternative programme and whether you would wish to discuss it in person with appropriate Minister and officials in the very near future. You will appreciate the growing urgency of the position.