209 McVey to Bruce
Cablegram 110  WASHINGTON, 1 July 1944
For Bruce from McVey. Begins.
Sir Owen Dixon and I had informal talks with Berle on June 22nd as desired by Prime Minister before he left America. Berle stated Joint Australia - New Zealand proposals for internationalization were unacceptable to United States Administration as was also Canadian plan.  Russia, too, was stated to be opposed to internationalization. Talks with Chinese are now going on. In Berle's opinion, only those countries which had been overrun or those Nations in which aircraft industries were nonexistent or poorly developed would favour internationalization. Those Nations on the other hand whose aircraft industries had become highly developed on account of wartime needs and who would have responsibilities for maintaining the peace would be found opposing internationalization. The United States which had become the largest aircraft producing Nation in the world wished to retain the largest possible nucleus of this industry to enable her to play her part with other United Nations, in the peace and also because a virile' aircraft industry is essential for the strategical defence of the United States and her territories.
Berle laid great emphasis on public and congressional opinion as being opposed to submitting American interests to an International body of uncertain composition and trends or affiliations. He made repeated references to the example of the Mercantile Marine in which United States trade was carried in other bottoms. He instanced Norway whose Mercantile Marine was a feature of her national economy. Berle stated that before the war United States airline operators carried 80% of the external air commerce of the world and Congress would be adverse to any arrangements which would tend to reduce the volume of air commerce which Congress considers should rightly be carried in aircraft operated by United States carriers.
In answer to a question Berle expressed the opinion that the best that he would expect from the proposed United Nations conference would be freedom of transit, right of technical stop, right of participation in commercial traffic on an equitable basis whilst conceding cabotage rights, and agreement on a bottom level for passenger and freight rates with authority to fix higher rates in special circumstances such as faster schedules, more comfort in travelling, etc. He expressed the view that the powers of any international authority which may be established would be limited to prescribing by common consent safety and operating standards, standardisation of air navigation communication and meteorological facilities and such matters of common concern in the interests of uniform or co-ordinated operation. Statistical data would doubtlessly be supplied by all Nations to International Authority for the information of those participating in international operation. Gradually the powers of the International Authority might be built up in the light of experience but in the early stages the most that could be hoped for from the United Nations would be agreement on certain broad principles.
Routes and Schedules. Berle considered could be arranged by bilateral or multilateral agreements between countries.
Berle's views should, I suggest, provide a spur to British authorities to push ahead with some Commonwealth and Empire agreements on Inter Empire routes and to make an announcement of intention at earliest possible moment. Ends.