Foreign Relations of the United States: Diplomatic Papers, 1945, The British Commonwealth, The Far East, Volume VI

711.4127/11–2745

The British Ambassador (Halifax) to the Secretary of State

Memorandum

North Atlantic Air Services

His Majesty’s Ambassador presents his compliments to the Secretary of State and has the honour to recall that in a Memorandum of November 13th he set out the proposals of His Majesty’s Government in the United Kingdom for an Interim Agreement with the United States Government on the subject of North Atlantic commercial air services. For convenience of reference a copy of that Memorandum is enclosed.

2. In a Memorandum of November 19th the State Department rejected these proposals on the grounds that they included certain principles which the United States Government was not prepared to accept.

3. His Majesty’s Embassy, on instructions from His Majesty’s Principal Secretary of State for Foreign Affairs,²⁶ then defined the position of His Majesty’s Government with particular reference to the announced intention of Pan-American Airways to reduce their fare to $275 and of American Overseas Airlines to increase the number of their frequencies to and from the United Kingdom. His Majesty’s Ambassador requested an assurance from the United States Government that United States air carriers would conform with international practice and not seek to increase frequencies before they have obtained the permission of the country to which they desire to operate. If Pan-American Airways adhered to their intention as announced, His Majesty’s Government would be reluctantly obliged to restrict the number of Pan-American services to the United Kingdom to the two per week permitted under the Exchange of Notes of 1937. In the case of American Overseas Airlines His Majesty’s Government felt bound to give warning that, if they aligned their fares with those proposed by Pan-American Airways, His Majesty’s Government, while ready to accept any rates recommended as economic by IATA, would have no option but to refuse American Overseas Airlines the right to operate to the United Kingdom.

4. On November 22nd His Majesty’s Ambassador left with Mr. Clayton a Memorandum expressing the disappointment of His Majesty’s Government at the rejection of their proposals for an Interim Agreement and inviting the United States Government to put forward, as a matter of urgency, their counter-proposals for dealing with the air transport problem, together with their suggestion for an interim arrangement covering the North Atlantic routes. On receipt of this communication Mr. Clayton enquired whether His Majesty’s Government would agree not to suspend the additional services proposed by Pan-American Airways and American Overseas Airlines in order to afford further time for the adjustment of the matter.²⁷

5. His Majesty’s Government have given careful consideration to this suggestion but regret that they are unable to accept any additional frequencies at fares which have not been agreed. In order, however, to meet Mr. Clayton’s request and to facilitate the immediate expansion of trans-Atlantic services they are prepared to permit Pan-American Airways and American Overseas Airlines, pending a formal agreement between the two Governments, to operate a total of up to seven services per week each to the United Kingdom, provided that they will charge not less than the fare of $375 provisionally agreed at the last meeting of the International Air Transport Association.

6. It should, of course, be understood that in the case of both Companies such permission refers to straightforward Third and Fourth Freedom services, and that His Majesty’s Government cannot approve Fifth Freedom services until these are covered by formal agreement.

7. His Majesty’s Government feel bound to repeat that, with the exception of the two frequencies operated by Pan-American Airways under the 1937 Exchange of Notes, they cannot permit any service at rates less than those agreed from time to time by IATA. His Majesty’s Government rely on the United States Government to convey the necessary warning to the Companies concerned, if this has not already been done.

8. Finally His Majesty’s Ambassador desires to remind the Secretary of State that the preparations of His Majesty’s Government for the conference on a long term Agreement await the counterproposals from the United States Government, requested in his Memorandum of November 22nd.

Washington , November 27, 1945.

26. Ernest K. Bevin.
27. In a covering letter to Mr. Clayton, Lord Halifax referred to talks between them which had taken place over the weekend (811.79641/11–2745). Presumably, Mr. Clayton made his inquiry at that time; no record of these talks found in Department files.