My dear John [Baldwin],

This is by way of an interim reply to your letters of 27th December, 1945, and 3rd January 1946,1- but, first may I extend to you the Season's Greetings and best wishes for 1946.

PORTUGAL

We are proceeding without any more formal request to approach the Portuguese Government for the privilege required in Portuguese territory by the Government of Canada,' and I have asked the Foreign Office to discuss with the Portuguese Government the best procedure for negotiating the Agreement. I anticipate no difficulty in securing the right to exercise all 5 freedoms in Portuguese territory, with reciprocal rights limited to Freedoms I to 4.2

As regards rights for R.C.A.F. aircraft, the Air Staff will be pleased to take up, on your behalf, any rights you require at the Azores to enable R.C.A.F. transport services to continue to operate so long as Canadian occupation forces are in Europe.

AMENDMENTS TO BERMUDA DOCUMENTS

Our copies contain the same errors as appear in yours, and we will make the necessary corrections, taking our exchange of letters as authority.

There is a further error in paragraph 8 of our copy of the Annex to the Bilateral Agreement. In the first sentence reference is made to "to capacity to which it is entitled under the preceding paragraph". This reference occurs in two places in the sentence. In both cases "paragraph" should be altered to read "paragraphs", since capacity under paragraph 5 as well as under paragraph 7 is involved. Here again I suggest we amend our respective copies.

EXCHANGE RESTRICTIONS

Lord Winter¹ has written to the Chancellor of the Exchequer representing the views of the Canadian Government, as expressed by Mr. Howe, and strongly recommending exemption from the restriction in the case of air passages. We will advise you by telegram when a reply is received.

WEST INDIES AGREEMENTS²

The Colonial Office have proposed to the Caribbean Colonies the same basis of qualified reciprocity as the Bermudian Government accepted, and we will let you have their reactions by telegram.

As regards stopping places, it would be preferable if they could be specified. Could you not specify all the possibles on the basis of "a route from Canada to the West Indian Islands and beyond via Bermuda, including all or any of the following stopping places"?

As regards the Form of the Annex, I suggest that we should open with a paragraph in which H.M.G.3 on behalf of the various Colonies (to be named) accords to T.C.A., as the designated airline in Canada, the right to pick­up and set-down traffic in U.K. territories (except for cabotage traffic between the Islands South of Bermuda), on a route between Canada and the West Indian Islands and beyond via Bermuda, and calling at all or any of the following places. The capacity and frequencies of the services, and the tariffs to be charged, shall be agreed at the outset and on subsequent revision, between the Government of Canada and the Government of the U.K. on behalf of the Colonial Governments concerned.

This could be followed by a paragraph embodying the Provisions we agreed at Bermuda as regards reciprocity. Then continue with a paragraph to the effect that in the event of any of the Governments concerned electing to exercise the rights of reciprocal operation in accordance with the provi­sions of the preceding paragraph, the following provisions shall apply as regards services between Canada and the territory concerned. Then follow with those standard provisions which are appropriate.

If this suggestion accords with your views we will prepare a draft on these lines.

Mr. Howe's point about reciprocal operation from individual Colonies really need not give cause for concern. In the first place, the negligible capacity to which each individual Colony would be entitled on a 3rd and 4th Freedom basis places a series of independent Colonial operations beyond the real ins of practical air line operation. In the second place; B.W.I.A.³ is being developed as the chosen instrument for the British Caribbean area, and any reciprocal rights would be exercised by them as the designated airline of all the Colonies.

Turning to your letter of 3rd January about Iceland, we have not yet negotiated our Bilateral Agreement with the Icelandic Government. We would propose, therefore, to deal simultaneously, with Canada and the U.K. (by separate Agreements), subject to the proviso that we should not pursue 5th Freedom rights on your behalf if Iceland will not grant them on a non-reciprocal basis. Again, we need no formal request to act as your agents unless the Icelandic Government asks for our credentials!

I look forward to our next meeting. I have the happiest recollections of our talks at Bermuda. What more proof is needed that complete frankness and a spirit of mutual accommodation will solve most international problems? I hope to have an opportunity to pay an ¹ early, visit to Montreal to see P.I.C.A.O. at work, and, while in Canada I could not miss visiting your lovely city again.

You will probably have noticed that We have embarked on discussions with the Americans at Bermuda. Apparently the Americans came forward with the proposals whilst we were in Bermuda, and as they were anxious that con­versation should be in progress when the Loan Bill is introduced into Con­gress, we have met their wishes. Hildred has taken my usual place in the team, and I can only hope that this Delegation will succeed where their pre­decessors have failed.

My warmest regards to Mr. Howe and Mr. Symington and to all the Cana­dian team.

Yours sincerely,
W. C. G. CRIBBETT

P.S. Do coine to the next C.A.T.C.⁴ meeting.

¹Voir les documents 1240, 1241 et 1242.
¹Les cinq libertés de l'air sont:
le Liberté: La liberté de traverser un terri­toire sans atterrir;
2e Liberté: La liberté d'atterrir pour des raisons non commerciales;
3e Liberté: La liberté de débarquer des passagers, du courrier et des marchandises embarqués sur le territoire de l'État dont l'aéronef possède la nationalité;
4e Liberté: La liberté d'embarquer des passagers, du courrier et des marchandises à destination du territoire de l'État dont l'aéronef possède la nationalité;
Se Liberté: La liberté d'embarquer des passagers, du courrier et des marchandises à destination du territoire de tout autre État contractant et le privilège de débarquer des passagers, du courrier et des marchandises en provenance du territoire de tout autre État contractant.

² See Documents 1240, 1241 and 1242.
²The five freedoms of the air are:
1st Freedom: The freedom to fly across e territory without landing;
2nd Freedom: The freedom to land for non-traffic purposes;
3rd Freedom: The freedom to put down passengers, mall and cargo taken on in the territory of the State whose nationality the aircraft possesses;
4th Freedom: The freedom to take on pas­sengers, mail and cargo destined for the terri­tory of the State whose nationality the air­craft possesses;
5th Freedom: The freedom to take on pas­sengers, mail and cargo destined for the terri­tory of another State and the privilege to put down passengers, mail and cargo coming from any such territory.

³ Ministre de l'Aviation civile de Grande-Bretagne.
³ Minister of Civil Aviation of Great Britain.

⁴ Voir les documents 875 et 876.
⁴See Documents 875 and 876.
His Majesty's Government.
British West Indian Airways.
Commonwealth Air Transport Council.