811.79640/278: Telegram
The Chargé in the United Kingdom (Atherton) to the Secretary of State
[Received June 29—2:35 p.m.]
328. Embassy’s 325, June 26, 5 p.m.87 Following just received from the Foreign Office:
“Sir, I have the honor to refer to the note number 173888 which Mr. Bingham was so good as to address to me on the 1st May, on the subject of the establishment of trans-Atlantic air services.
2. His Majesty’s Government in the United Kingdom have no comments to offer upon those portions of Mr. Bingham’s note which deal with reciprocity and applicable laws and regulations, with which they are in full agreement. You will recall that during the Conference held at Washington in December last between representatives of His Majesty’s Governments in the United Kingdom, Canada, and the Irish Free State and the United States Government, the United Kingdom Director General of Civil Aviation was informed that Pan American Airways were acceptable to the United States Government for the purpose of the trans-Atlantic services. In view of this assurance he has, I understand, already informed the president of Pan American Airways that His Majesty’s Government are prepared to issue to that company permits for landing rights in the United Kingdom, Newfoundland, and Bermuda, in the terms that were agreed at the Conference. These terms, and the terms of the permits to be issued by the United States Government to Imperial Airways (or a company in which Imperial Airways hold a controlling interest) were drawn up at the Washington Conference with the intention that they should constitute an agreed text giving effect to the understandings reached in the course of discussion. Provision was made in them for complete reciprocity and for adherence by the respective companies to the applicable laws and regulations of the Governments issuing the permits.
[Page 723]3. His Majesty’s Government desire to make clear that the permits for which applications were made by Imperial Airways relate to two distinct and separate services namely:
- (1)
- The trans-Atlantic service from London to New York, either via Newfoundland or via Bermuda, (on a frequency not exceeding two round-trips per week unless additional services are authorized by the Governments concerned).
- (2)
- The local service from Bermuda to New York, (on a frequency not exceeding two round-trips per week).
His Majesty’s Government are unable to regard the regular local service which they desire to see operated between Bermuda and New York as forming one leg of the trans-Atlantic service, because it is not expected that the latter service will be regularly and continuously operated via the Azores and Bermuda. One of the main principles adopted during the discussions at Washington was that the trans-Atlantic service should be operated via Newfoundland whenever possible, as being shorter and more economical. The connection of the Bermuda–New York local service with the trans-Atlantic service does not appear therefore to be fundamental, and His Majesty’s Government find no difficulty in agreeing that aircraft employed on the Bermuda–New York local service should be separate from and independent of those employed on the trans-Atlantic service.
4. In this connection His Majesty’s Government while they naturally cannot agree to restrict themselves in their own use of territories under the sovereignty of the British Crown desire nevertheless to assure the United States Government that they have never intended nor do they intend to use the local service between Bermuda and New York as a means of creating a separate trans-Atlantic service additional to that provided for in the draft permits now under consideration. Though it is not entirely clear from the note under reference His Majesty’s Government assume that the United States Government recognize that neither Government has the legal or practical power to designate an airway or a route to be followed over territories or waters outside its own juridical control.
5. The records of the Washington discussion contain a reference to the non-exclusiveness of these arrangements, with which His Majesty’s Government are in full agreement. It is also agreed that the air transport companies operating the services concerned must at all times have the approval of their respective Governments.
6. As regards the suggested right of revocation His Majesty’s Government appreciate the limitation which prevents the United States Government from issuing an irrevocable permit. They themselves feel strongly that the conditions of tenure under which the companies undertake this important enterprise should be such as will encourage them to develop the service by all means at their disposal. Considering the heavy capital expenditure which will be involved in the organization and establishment of the service His Majesty’s Government conclude that it is only with the advantage of a reliable long term tenure that the undertaking can be expected to produce fully and effectively its inherent benefits for the trade and traffic of the countries concerned. His Majesty’s Government on their part are willing to grant a permit of 15 years’ duration (under the usual terms of [Page 724] satisfactory observance) to Pan American Airways, so soon as the questions still at issue have been resolved. They have been officially informed that this company is acceptable to your Government and so far as they are aware it is the only United States company possessing an extensive practical experience of commercial flying overseas. It has been engaged in close and friendly cooperation with Imperial Airways for over 6 years with advantages to both and you will no doubt recollect that it was largely with the object of enabling this beneficial association between the companies to continue that the proposed northern trans-Atlantic service which could always be operated as a purely British Commonwealth airway (and indeed was originally so designed) was extended from Montreal to New York.
7. In this connection I would remind you of the long-term permits which have been granted to Pan American Airways in respect of their services through British possessions in the West Indies.
8. If the United States Government wish, however, to include a revocation clause in the permits, His Majesty’s Government suggest that it should be agreed that resort should not be had to revocation except for the highest reasons of public policy necessitating the complete suspension of all trans-North Atlantic air services to and from the United States and that prior communications should take place between Governments before notice is given to the company concerned. It would appear to them equitable that revocation should take effect 2 years after such notice. They would be glad to receive as soon as possible a draft of the clause proposed for the Imperial Airways permits, in order that they may arrange for the reciprocal provision to be made in those granted to Pan American Airways. Subject to this clause, His Majesty’s Government trust that it will be found possible to grant 15-year permits to Imperial Airways (or a company in which Imperial Airways hold a controlling interest).
9. It is the earnest hope of His Majesty’s Government that on receipt of the above explanations the United States Government will be willing to issue to “Imperial Airways or a company in which Imperial Airways hold a controlling interest” the permits in respect of the trans-Atlantic service and the Bermuda–New York service in exchange for those which they, on their part, are prepared to issue at once to Pan American Airways, and which His Majesty’s Government are prepared to agree should become operative as from 1st June.
10. His Majesty’s Government in the United Kingdom note that the United States Government propose to communicate with His Majesty’s Governments in Canada and the Irish Free State with regard to the permits to be issued to Pan American Airways by those Governments. I have, [etc.].”