Washington telegram No. 21 to you. [1] Pacific Air Service.

For reasons of high policy touched on in Casey's telegram, Cabinet
has been considering desirability of reopening question of
extension of Pan-American Airways South Pacific service to
Australia.

As you are aware, the Commonwealth Government, besides maintaining
reciprocity in landing rights as basic principle of policy in this
matter, has also consistently held the attitude that an approach
for extension of Pan-American service could only be entertained if
made by the United States Government. Furthermore, we have
regarded ourselves as fully bound by agreement confirmed at
Wellington Conference April 1939 for consultation between United
Kingdom, Commonwealth and New Zealand Governments on matters
affecting trans-Pacific air services.

I would appreciate if you would now raise the question with
appropriate United Kingdom authorities and explain that,
influenced by the consideration set out in Casey's telegram,
Commonwealth Government considers that it would be of advantage to
intimate of its own accord to the United States Government that it
is ready to discuss extension of Pan-American service to
Australia. Such an offer would preserve the condition that the
granting of terminal rights in Commonwealth territory would be
conditional on reciprocity in United States territory on behalf of
any future British trans-Pacific service.

At the same time the United States Government could be given to
understand that for various practical reasons arising out of
present war conditions, such a service could naturally not be
established for some time. So far as the United States is
concerned, therefore, reciprocity would be nominal until such time
as means for establishment of British trans-Pacific service became
available.

From your recollection of previous occasions on which matter has
come under discussion you will appreciate that while proposed
approach to the United States Government does not carry any
variation as regards our consistently held requirement of
reciprocity in landing rights, it does represent an advance from
our side in that we have hitherto taken the line that approach
should come from the United States Government itself. This
modification we consider to be fully justified on present broad
political grounds.

If, on receipt of your observations and views of United Kingdom
authorities, it is decided to proceed further with this proposal
we would, as the next step, ascertain views of New Zealand
Government. [2]

FADDEN