The issues before the Conference  are now reasonably clear but the position has been so confused during the last ten days and has so changed even from hour to hour that no clear picture could have been given you.
2. There have been constant discussions outside the Conference between the United States and the United Kingdom Delegations while all technical work was continuing and members of the Commonwealth with the exception of Canada conferred practically every night.
Canada, as at Montreal, has been difficult but last night when it became evident that the Latin American countries were not prepared to grant the 'freedoms'  and in consequence there would be little chance of any air transport convention being adopted Canada told the British Commonwealth that she would not grant even the first two freedoms if the . International authority has no regulatory powers.
3. Much of the trouble has arisen over a new element introduced by the United States namely, insistence on a fifth freedom or right to take on passenger mail and freight from any country to any other country along the route not necessarily being the country of origin of the aircraft. In effect so far as Australia is concerned this would mean open competition with the Tasman service and a continuation right  through to England along the Indian route without any corresponding benefit to Australia.
Attempts to regulate this traffic by means of quotas and various formula have not so far been successful.
4. At the moment the main points in dispute are- (1) The maintenance of equilibrium by regulation of frequencies of services to traffic offering between any two countries. For example, the United States insisted at the outset on the right to place an unlimited number of aircraft on an international route irrespective of the traffic.
(2) A fair division of traffic offering between terminal points of international air routes. For example, the United States would operate a service to London and then on to Australia using the four freedoms. Say the London section carried five planes a day;
the United States wanted the right to carry on the whole number right out to Australia picking up anywhere en route. This attitude has been modified but the issue has not been satisfactorily settled.
(3) Complete refusal by the United States and Latin American block to have any international authority except of a purely advisory and technical nature. It can recommend but has no power to regulate.
5. Thus  position is that the conference will produce- (a) An air navigation convention with technical annexes which will supersede the Paris  and Havana conventions  on ratification.
(b) Some form of interim council with limited functions to cover the transitional period between the present time and the end of the war. We have been enabled to get clause in to the effect that this will be for three years after the end of the European war and for Australia, New Zealand and India three years after the termination of the Japanese war.
This gives us reasonable time to develop and obtain aircraft and to organise our international services. We have also submitted strong claim for representation on the Council based on any criteria which can possibly be proposed such as an operator, a user or consumer, a provider of air facilities or main geographical region.
6. General. I feel I have been too long here and it is clear that the Conference will last another week at least, but I think I should now remain to the end as the technical people have gone and only McVey and I remain to do all the work. In the meantime there has not yet been debate on the questions in dispute mentioned in this above  and this is sure to take time. I am also with six others on the main drafting Committee which apart from day to day work will put the agreed conventions and annexes in the final form.