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 [2], 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 [3]
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 [4] 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. [5]

[matter omitted]

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.