825.796/114: Telegram

The Secretary of State to the Ambassador in Chile ( Bowers )

4. Your 305, December 15, 11 p.m. The Department has discussed the subject of your telegram under reference with Roig and Harris of Panagra. They say that at present Panagra does not have the equipment or personnel available to operate an additional service between Arica and Santiago, especially in view of the recent loss of an airplane in Ecuador and the partial destruction of another in Buenos Aires. The Department, as well as Panagra, is aware of the deficiency of the present schedules, and will support an application [Page 563] by Panagra for additional equipment and personnel for this service, as well as a mail subsidy from the Post Office Department. The demand, however, for equipment and personnel is so great that the Department must restrict carefully its support of applications to the Priorities Board for equipment and indicate relative preferences. At the present time it is considered that the most urgent cases are in Ecuador and Brazil where the release of equipment will be predicated on the actual removal of present German influence.

Please keep the Department advised of the possibility of the Chilean Government granting any German airline the right to fly between Santiago and Arica, in order that the situation in Chile may be weighed in the light of conditions elsewhere and the limited equipment available.

For your confidential information. Since the American Export Airlines has been certificated by the Civil Aeronautics Board as an additional United States international carrier, it is felt that the possibility for expansion by this company as well as by Pan American and Panagra in the American republics should be taken into consideration.