MOST IMMEDIATE

For McVey from Johnston.

1. The Conference of Civil Aviation officials opened at Montreal
on the 23rd of October [1] and at the commencement the Delegations
indicated their general views. Australia's views were expressed in
accordance with the Australian - New Zealand Agreement of the 12th
of October [2] and were duly supported by the New Zealand
Delegation. In subsequent discussions it became apparent that the
Australian and New Zealand proposals for internationalization
extending to actual operation and ownership of aircraft were not
supported by any other Delegation as a practical proposition,
although it was understood that the Australian and New Zealand
Governments would, nevertheless, press this policy at Chicago.

2. It is clear from discussions to date that all Commonwealth
Governments endorse the need for a regulatory body in accordance
with the principles of the Balfour report. [3] The Canadian draft
convention [4], embodying these principles, is being examined in
detail with a view to it being submitted at Chicago as a draft
convention in actual form which must, therefore, be given full
consideration by the Nations there. There are many aspects of air
navigation dealt with in the Paris Convention of 1919 which are
not covered by the Canadian draft and agreement will probably be
reached to extend the scope of the Canadian draft from purely air
transport to cover the full field of air navigation by including
as a separate part of the draft convention the majority of the
provisions now contained in the Paris Convention.

3. At the commencement Canada tabled certain minor amendments to
their original draft convention and these, with the United Kingdom
amendments, are now under careful examination.

4. The United Kingdom Government proposed that members of the
present Conference should advocate at Chicago:-

(1) Full international control and authority on the lines of the
Canadian and amended United Kingdom draft.

(2) In the event of failure of the above, conferences of operators
to replace executive and regional bodies contemplated in the
Canadian draft, the decisions of such conferences to be subject to
endorsement, variation or refusal by international authority.

(3) If (2) fails then agreement to include in any bilateral
agreements between countries certain binding provisions, such as
making agreement to apply to the interim period only.

5. On the question of operating Commonwealth routes it is too
early to indicate what conclusions will be finally reached, but
clearly Canada at least is opposed to one Commonwealth operating
organisation and regards the principle of sectionalisation as
having been agreed in London talks-vide Beaverbrook-Howe of the
13th of October, 1943. [5] The Australian Delegation presented the
case for strategic and commercial Empire routes, but apart from
New Zealand, no active support was given and the Australian
Delegation was requested to submit a detailed case for an Empire
Corporation for the consideration of the Sub-Committee. Even the
United Kingdom Delegation regarded the difficulties of
Commonwealth operating corporation, especially those of standard
equipment, as being insurmountable.