911.5200/12–2854
The Under Secretary of State (Hoover) to the Director of the Bureau of the Budget (Hughes) 1
Dear Mr. Hughes: Reference is made to the Bureau of the Budget’s letter of December 20, 1954 transmitting a copy of the Civil Aeronautics Board decision in the Trans-Pacific Certificate Renewal Case, Docket 5031 et al., and requesting the views of this Department thereon. The Department believes in general that the views expressed by the Board are consistent with and would further the foreign policy objectives of the United States at this time.
It is noted that the Board’s decision provides for continued competition between United States carriers across the Pacific and that it establishes, so far as is possible under existing conditions in the Pacific, area competition between such carriers. In this connection the Department notes that the Board has found that any savings that might result, even under reasonable assumptions favorable to single carrier service, would be far outweighed by the overall benefits resulting from competition over the Pacific. It is the Department’s view that this finding indicates that continuation of competition over the Pacific is consistent with the Civil Air Policy expressed [Page 459] in the Air Coordinating Committee’s report of May 1954, approved by the President.
The Board’s handling of the situation with regard to certification of carriers to serve points presently inaccessible to United States air carriers because of the political situation seems to this Department to be especially noteworthy. The Department is pleased to note that the Board has found it possible to continue a flexible situation with regard to these points without naming them as points in a new certificate. In this respect it is assumed that the authorization to serve these points through the application of the Administrative Procedures Act is subject to further CAB approval should it become feasible to operate to these points.
As is noted in the Board’s Opinion, operations into Hong Kong by Northwest Airlines cannot be begun until the British have agreed that a United States airline may exercise traffic rights there.
The Department also wishes to express its approval of the Board’s action in deferring decision on the TWA request for renewal of existing authorizations to serve points in the Far East. Inasmuch as this Department has found that such value as a second round-the-world service at this time might provide would probably be outweighed by the foreign relations problems that would arise in seeking the traffic rights necessary to establish such a service, it is believed that the Board’s opinion denying the application for new and additional points for that purpose is wise.
In view of the above foreign policy considerations, the Department of State recommends the approval of the Board’s decision in the Trans-Pacific Certificate Renewal Case.
Sincerely yours,
- Drafted by H. Alberta Colclaser.↩