800.796/410½
The Assistant Secretary of State (Berle) to the Secretary of State
Quebec Trip: Aviation
S—Mr. Secretary: The British will bring up the possibility of entering negotiations looking towards an agreement upon post-war commercial aviation and air rights.
It is suggested that you take the position that the United States is not at present ready to enter these discussions but to indicate that this Government realizes the great importance of the question, and the great public interest therein; and that it considers that the problem must be made the subject of discussion at an opportune time. It might be left open for decision whether such discussions should be in the nature of discussions between the United States and Great Britain; or the United States and the British Empire; or between a group representing all the United Nations. Meanwhile, you might wish to say that pending the time when such discussions can be had, we should be glad to exchange general ideas and information.
You might wish to refer to the fact that in June [May] of 1942, in response to a protest of the British Foreign Office against an attempt of an American air company to secure the exclusive rights in Egypt, we suggested that neither country attempt to make arrangements exclusive of or discriminatory against the other pending an opportune time for an amicable discussion in a cooperative spirit.1 We consider this as a continuing understanding, which implies that neither country will conduct or assent to a policy of “grab” while the war is going on. It is neither to the British interest nor our own to open the situation to a policy of competitive “grab”.
Note: For your confidential information, it is the general estimate that the policy of “grab” would suit British interests far better than ours, since they are probably in a position to obtain exclusive rights [Page 680] throughout practically all of Africa (other than the Portuguese possessions); throughout the British Commonwealth nations and India, and very likely throughout France through General de Gaulle and very possibly a fair proportion of the European continent. Since the important traffic routes lie across Canada, Britain and the West European countries, this might seriously handicap attempts of American aviation to expand beyond the Western Hemisphere. It might be pointed out to the British that discussions ought to await our sounding out of Congressional opinion; and that, indeed, the issues presented to American public opinion are very much the same as those which are being presented to British public opinion by different groups in the British Government and British commercial world.
The question may be brought up as to our attitude towards a possible cartel agreement between Pan American Airways and British Overseas Airways Corporation. (Rumors of such a cartel agreement have reached us; though they are not solidly substantiated it is plain that some steps toward that end have been taken without direct knowledge of any Government agency.) You might take the position that air rights are so intimately connected with problems of international security that no agreement by purely private parties could be accepted as binding on American policy.
The question may be brought up as to whether the United States would pursue a policy of free sale of commercial transport planes to Britain; and it would be buttressed by the argument that we had encouraged the British to manufacture fighter planes, and had undertaken ourselves to manufacture the long-range heavy planes which could be flown across the Atlantic thereby saving some tonnage. The British would argue that having abandoned to some extent their manufacture of commercial transport planes, we should freely sell to them.
You might wish to say that we should, of course, consider the question on a fair and equitable basis but we might observe that under the allocations of the Munitions Assignment[s] Board some four hundred transport planes have been allocated to Britain for war purposes which the British have found it possible to use quite easily for civil transport work. They are not, therefore, particularly short-hauled since a proportion of these will be available to take care of their regular air route necessities during the period prior to general discussion.
Detailed questions may be raised with regard to the degree to which the American army transport services are used in commercial work. This is a bone of contention between our army and the British. Our army contends that they have rigidly excluded the army transport services from any commercial work. The British, however, have conducted [Page 681] their army transport services through the medium of B.O.A.C. and the army contends that B.O.A.C. actually engages in commercial work. The reports on these various claims are too conflicting at this time to make it possible to settle the matter—which, indeed, may not be brought up at all because there is reason to believe that the British position is somewhat weak.
The only other major aviation problem properly falls in the field of security namely, whether we should go in for a program of joint air bases. This, I presume, will already have been considered in your talks with Norman Davis. It would seem premature to try to evolve a plan at this time, though the subject might be listed as one for continuing discussion on a technical level between the two Governments.