811.24532/7–1046
The Acting Secretary of State to the Secretary of War ( Patterson )
My Dear Mr. Secretary: Reference is made to your letter of July 10, 194656 enclosing a copy of the legal opinion of the Judge Advocate General on implications of the Airport Development Program Contract in the light of Brazilian Decree-Law 3462.
After giving careful study to the legal opinion in question and to other aspects of the problems involved in this case, I should like to suggest for the War Department’s consideration the following specific steps to bring the matter to a conclusion:
- 1.
- The War Department, as a party to the Airport Development Program Contract, should inform Pan American Airways of its intention in the near future to turn over to the Brazilian Government the airport installations built in Brazil with United States Government funds, in accordance with arrangements to be worked out by the United States Embassy in Rio de Janeiro with the Brazilian Government.
- 2.
- Pan American Airways, through its subsidiary, Panair do Brasil, may then if it wishes approach the Brazilian Government for the purpose of ascertaining what rights in these installations, if any, it would enjoy by virtue of Decree-Law 3462.
- 3.
- The State Department, after ascertaining the views of the War Department, would determine what assistance, if any, should be extended to Pan American Airways should the latter need and request the support of the United States Government in obtaining the recognition of its claims by the Government of Brazil.
- 4.
- If the Brazilian Government, either with or without the intercession [Page 457] of the United States Government, confirmed in Panair do Brasil the rights set forth in Decree-Law 3462, the War Department, as a party to the Airport Development Program Contract, would undertake to establish with Pan American Airways such equitable interest as the United States Government may have in these rights by virtue of the fact that the cost of the installations was borne by the United States Government and that benefits accruing from the expenditure should if possible be available to United States civil aviation in general. Recognition of the Government’s equity might in any case be a prior condition to any official intercession with the Brazilian Government on behalf of Pan American Airways.
- 5.
- In the event that the stage contemplated in paragraph four is reached and it should become necessary to do so, the Department of State would endeavor to work out with the Brazilian Government a formula for the generalization of benefits contemplated in that paragraph.
These suggestions, if agreeable to the War Department, can be put into effect at once without further consultation; otherwise, representatives of this Department would be pleased to meet at any time with representatives of the War Department to discuss further the situation.
Sincerely yours,
- Not printed.↩