137 Commonwealth Government to Mr M.J. Savage, N.Z. Prime Minister, and to Sir Thomas Inskip, U.K. Secretary of State for Dominion Affairs
Cablegram unnumbered/82 21 August 1939,
(2) (No. 82. Following telegram has been sent to the Prime Minister of New Zealand-)
PACIFIC AIR SERVICE
My telegram No. 75 : Following is attitude of Commonwealth Government regarding the two points raised in paragraph 7 of Secretary of State's telegram No. 58 (No. 79 to New Zealand) Paragraph 1, Commonwealth Government agrees that once Canada's participation has been secured application be made to Washington for facilities in American territory on behalf of Tasman Empire Airways pending decision as to permanent arrangements for operating the British service.
Paragraph 2, In the event of this application meeting with difficulties the Commonwealth Government would not be prepared to entertain any proposal from Pan American Airways for terminal facilities in Australia unless United States Government was willing to include in the agreement an express condition that reciprocity would be granted as regards landing rights in American territory for an eventual British Trans-Pacific Service. We feel that an express condition of this nature actually in the agreement is preferable to a grant of consent with the reservation of a right to cancel the agreement in the event of reciprocal facilities for a British service not being forthcoming. Further we can visualise reasons which may cause delay in the joint British application to Washington and we may at any moment be faced with request for terminal facilities in Australia. No such request has in fact been made but our attitude would be as indicated in this paragraph. In this regard it is noted from New Zealand cable to Dominions Office No. 91  that New Zealand government is prepared to adopt similar attitude and terminate agreement with Pan American Airways. As regards New Zealand cable 91, Commonwealth also feels that negotiations with Canada might be more appropriately and efficiently conducted by United Kingdom Government and concurs in this course unless His Majesty's Government in the United Kingdom considers it advantageous that communication should originate from New Zealand. Commonwealth also concurs in proposed communication to Pan American Airways set out in New Zealand cablegram of 19th August as it considers a reply in terms of New Zealand telegram No. 68  preferable to that contained in New Zealand telegram No. 85. 
(1) (This telegram has been repeated to the Secretary of State for Dominion Affairs).