It is very clear that Canada is not ready for the establishment of
an Empire Scheme.
It is also clear that Canada, the United States and, in all
probability, Russia are opposed to any plan for the
internationalisation of air services.
The principles therefore stated in the Australian policy of.-
(a) the internationalisation of air routes managed by some
(b) an Empire service are negatived.
It would appear to me, therefore, that there should be immediate
study given to the proposals set out in Lord Beaverbrook's letter
of the 3rd July  under which we can perhaps develop certain
Commonwealth air services.
The United Kingdom, Australia and New Zealand should at once
commence discussions regarding the operation of a route through
the Mediterranean and India. In the latter connection, India would
be welcome as a partner, but in any event the other three
countries have paramount interests in providing a service between
the Pacific and the United Kindom.
I should be glad if Mr. McVey would summarise his valuable reports
 and the discussions  he has had by concluding with a series
of positive recommendations as to the immediate steps that are
On receipt of the particulars sought in the final para an agendum
to be prepared for Full Cabinet.