(c) crown copyright

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230 (THIS DOCUMENT IS THE PKOE&TY OF HIS BiilTAlJHIC MAJJiSTY' S GOVMHMENT)

S E C R E T

C P . 327 ( 2 7 ) C A B I N E T

Copy No

OOIflglTTES CN THE FUTURE Ojf BHITISH COMMERCIAL AIR THAN SPORT.

1. A t t h e i r meet ing on Cetober 26th, 1927., (Cab ine t

52 ( 2 7 ) Conc lus i on 8 ) , the Cabinet had b e f o r e them a

memorandum by the S e c r e t a r y o f S t a t e f o r A i r ( Pap t r

C P . 238 ( 27 ) ) d e a l i n g w i t h the p r e s e n t p o s i t i o n o f

B r i t i s h Commercial A i r T ranspor t and agreed t o t h e

appointment o f a Cabinet Committee t o r e v i e w the q u e s t i o n

composed as f o l l o w s : -

The P r e s i d e n t o f the Board o f T r a d e . ( I n the C h a i r )

The S e c r e t a r y o f S t a t e f o r A i r . Tho ? i r s t Lord o f the A d m i r a l t y . The -First CommiBP i one r o f Works, The -F inanc ia l S e c r e t a r y o f the T r easury .

The Terms o f R e f e r e n o e o f t h e Committee w e r e : ­

"To r e v i e w the p r e s e n t p o s i t i o n o f c i v i l

a v i a t i o n i n the B r i t i s h Empire, wi th p a r t i c u l a r

r e f e r e n c e t o r e c e n t deve lopments abroad and t o

c o n s i d e r and r e p o r t what m o d i f i c a t i o n s o f our

p r e s e n t p o l i c y a r e d e s i r a b l e and p r a c t i c a b l e " .

2 . To e n a b l e us t o f u l f i l our terms o f r e f e r e n c e we

havo examined a number o f w i t n e s s e s o f f i o i a l and u n o i f i ­

c i a l , i n c l u d i n g S i r E r i c Goddes, the Chairman o f I m p e r i a l

A i r w a y s , B r i g a d i e r Genera l W i l l i a m s o n o f the Pos t O f f i c e ,

and r e p r e s e n t a t i v e s o f the- A i r M i n i s t r y .

3 . S t a t i s t i c s comparing the p r o g r e s s of B r i t i s h and

f o r e i g n c i v i l a v i a t i o n were g i v e n i n the memorandum

c i r c u l a t e d t o the Cabinet by the S e c r e t a r y o f S t a l e f o r '

23 A i r r e f e r r e d t o i n p a r a . 1 a b o v e , ar.3 we do n e t t h i n k i t

n e c e s s a r y t o r e s t a t e t h e p o s i t i o n i n d e t a i l ,

The s a l i e n t f a e L s t o w h i c h a t t e n t i o n was d rawn i n

t h a t ncmoranduin, and wh i ch ou r i n v e s t i g a t i o n c o n f i r m s , a r e

f i r s t l y t h a t B r i t i s h a i r t r a n s p o r t i s l a g g i n g s e r i o u s l y

b e h i n d d e v e l o p m e n t s on t h e C o n t i n e n t and s e c o n d l y t h a t ,

w i t h o u t some m o d i f i c a t i o n o f t h o e x i s t i n g a r r a n g e m e n t s ,

tb t^re i s no h o p e o f t h i s s i t u a t i o n b e i n g s u b s t a n t i a l l y

r e m e d i e d .

The c a r d i n a l f e a t u r e o f B r i t i s h o i v i l a v i a t i o n p o l i c y

i n t h e p a s t h a s b e e n t h e c o n c e n t r a t i o n o f a i r t r a n s p o r t

i n the h a n d s o f a s i n g l e company who e n j o y a m o n o p o l y

o f s u b s i d y - I m p e r i a l A i r w a y s l t d ,

-To a r e s a t i s f i e d t h a t a t t h e p r e s e n t s t a g e o f c i v i l

a v i a t i o n d e v e l o p m e n t t h i s p o l i c y i s sound and s h o u l d h e

cor j t inu.ee 1 .

5, I t i s c l e a r l y , h o w e v e r , an e s s e n t i a l c o n d i t i o n t h a t a

company e n j o y i n g t h e s e a d v a n t a g e s s h a l l b o e f f i c i e n t l y and

e c o n o m i c a l l y m a n a g e d . '7e t o o k f u l l e v i d e n c e f r c r . S i r E r i c

G e d d e s on t h e f i n a n c e s o f I m p e r i a l A i r w a y s , d e v o t i n g p a r t i ­

c u l a r a t t e n t i o n t o such n u e s t i o o s a s o v e r h e a d e x p e n d i t u r e

and a d m i n i s t r a t i v e c h a r g e s . fie a r e g e n e r a l l y s a t i s f i e d

t h a t t h e company c o m p l i e s w i t h t h i s c o n d i t i o n .

6 . I m p e r i a l A i r w a y s h a s i n d e e d made s t e a d y p r o g r e s s o v e r

t h e f o u r y e a r s d u r i n g w h i c h i t h a s boon i n e x i s t e n c e and

f i g u r e s w e r e p r o d u c e d t o us w h i c h e s t a b l i s h e d ­

( a ) T h a t t h e r e h a s h e e n a mos t s a t i s f a c t o r y r e d u c t i o n

i n running , c o s t s o v e r t h e p e r i o d a s a w h o l e - a

r e d u o t i o n from. 3 s . 2 d . t o l s . l Q d . p e r t o n - m i l e

for tho l a t o s t t y p o t - - . l r . - i i n t o s e r v i c e - due

^ J J f £ r i l ^ ^ f e h o ^ i n t £ oa u c t i o n ̂ i ^mac h^n e s ̂ f ^ n ew

ftM^up.-:tQ;;date.^.0.egi&n and th::\t i n c o n s e q u e n c e ­

232

f b ) The company i s g i v i n g a m a r k e d l y b e t t e r t r c t u r n i n

t o n - m i l c a g e f l o w n f o r t h e amount o f s u b s i d y i t

r e c e i v e s t h a n i t s F r e n c h and German c o m p e t i t o r s ­

t h o s u b s i d y r a t e p e r t o n - m i l s f l o w n i n i r r a n c e

w o r k i n g o u t a t £ t i m e s and t h a t i n Germany a t

a b o u t 4 t i m e s our own.­.

Tho e v i d e n c e w h i c h we h a v e had b e f o r e us makes i t

c l e a r t h s t t i l a t t h o p r o g r e s s i v e i m p r o v e m e n t o f t h e e f f i c i e n c y

o f t h e a i r c r a f t e m p l o y e d b y the i n t r o d u c t i o n o f new t y p e s

i s t h e c h i e f d i r e c t i o n i n w h i c h a f u r t h e r r e d u c t i o n i n

w o r k i n g c o s t s c an bo s e c u r e d , and t h e day whon c i v i l a v i a t i o n

w i l l b e c o m e s e l f - s u p p o r t i n g b r o u g h t n e a r e r .

7 . Y7e a t t a c h t h e u t m o s t i m p o r t a n c e t o t h i s a s p e c t o f t h e

p r o b l e m and recommend t h a t t h e A i r M i n i s t r y s h a l l d i r e c t

s p e c i a l a t t e n t i o n t o t h e i m p r o v e m e n t o f t h e d e s i g n o f

nomrnarc i a l a i r c r a f t , and t h e r e s e a r c h r i e c e s s a r v t h e r e f o r . We f u r t h e r roeommend t h a t i n any r e v i s i o n o f t h e e x i s t i n g

c o n t r a c t s w i t h I m p e r i a l A i r w a y s s p e c i a l p r o v i s i o n s h o u l d b e

made t o enab?ue t h e company t o r e n e w i t s f l e e t w i t h m a c h i n e s

o f m o r e u p - t o - d a t e d e s i g n a t f r e q u e n t i n t e r v a l s . W h i l s t

wc a r e i n f o r m e d t h a t t h e r e i s a l r e a d y r e g u l a r c o n s u l t a t i o n

b e t w e e n t h e A i r M i n i s t r y , I m p e r i a l A i r w a y s , and t h e a i r c r a f t

m a n u f a c t u r i n g i n d u s t r y i n m a t t e r s a f f e c t i n g t h e d e s i g n o f

c o m m c e r i c l a i r c r a f t , v/e recommend t h a t , t o e n s u r e t h a t t h i s

r e n e w a l i s c a r r i e d o u t a t t h e p r o p e r moment and i n t h e most

e f f e c t i v e manner p o s s i b l e , some p e r m a n e n t m a c h i n e r y s h a l l b e

s e t up t o s e c u r e an e v e n c l o s e r l i a i s o n .

8 . The p r o g r e s s d e s c r i b e d i n p a r a . 6 a b o v e and t h e f i g u r e s

t h e r e g i v e n a r e h o p e f u l s i g n s , h u t we h a v e r e l u c t a n t l y

r e a c h e d t h e c o n c l u s i o n t h a t , u n d e r p r e s e n t a r r a n g e m e n t s

w h e r e b y t h e f i r s t o f a s e r i e s o f s u b s t a n t i a l p r o g r e s s i v e

r e d u c t i o n s i n t h e s u b s i d y i s duo n e x t y e a r , I m p e r i a l A i r w a y s

o p e r a t i o n s may, i f no a c t i o n i s t a k e n , s h o r t l y b o i n d a n g e r

o f p a r a l y s i s . T h e r e i s a f e a r t h : . t e i t h e r t h e company w i l l

233

go i n t o l i q u i d a t i o n i n the e a r l y f u t u r e , : o r t h a t , abandoning

a l l a t t empt t o con t inue t h e fu r the r p r o g r e s s i v e deve lopment

o f i t s t e c h n i c a l equipment (both a i r c r a f t and e n g i n e s ) and

o p e r a t i o n a l methods, whioh i s e s s e n t i a l i f the a i r t r a n s p o r t

i n d u s t r y i s e v e n t u a l l y t o beoomo s e l f - s u p p o r t i n g , i t w i l l

s t a g n a t e on the " d o l e " ( s o t o c a l l i t ) o f t h e e x i s t i n g

s u b s i d i e s w u n t l i i t s two e x i s t i n g c o n t r a c t s e x p i r o i n

1931 and 1934 r e s p e c t i v e l y .

In e i t h e r e v en t i t i s impor tan t t o remember tha t not

on ly the oomnany hut a l s o the a i r c r a f t manufac tur ing i n d u s t r y

as a whole w i l l be a f f e c t e d . A hea l thy i n d u s t r y i s a most

impor tan t asse t i n I m p e r i a l Defence^ ' At tho p r e s e n t s t a g e

o f deve l opment , t h e o r d e r s p l a c ed by c i v i l a i r t r a n s p o r t

u n d e r t a k i n g s a r e n e c e s s a r i l y on l y a sma l l f a c t o r i n the

prob lem, hut every e y t e n s i o n o f c i v i l a i r t r a n s p o r t i s o f

d i r e c t a s s i s t a n c e t o the i n d u s t r y , and any d i m i n u t i o n

' p r o t a n t o ' weakens i t s p o s i t i o n . Kcr e:-.ocpt on a v e r y

l i m i t e d s c a l e can the i n d u s t r y secure a market abroad f o r

i t s commercia l a i r c r a f t , s i n c e the p r i n c i p a l f o r e i g n c o u n t r i e s

make i t a c o n d i t i o n o f subs idy t h a t on l y a i r c r a f t o f t h e i r

n a t i o n a l manufacture s h a l l be u t i l i s e d . '

9* In s h o r t i t appears u n f o r t u n a t e l y t o be i m p o s s i b l e t o

r e s i s t tho c o n c l u s i o n tha t f i n a n c e i s the main, though not

the on ly key t o the problem and t h a t u n l e s s the deve lopment

o f B r i t i s h c i v i l a v i a t i o n i s t o be abandoned, a r e v i s i o n o f

the e x i s t i n g agreements t o p r o v i d e f o r the con t inuance o f a

s u b s t a n t i a l subs idy ove r a term o f y e a r s so as t o g i v e t h e

company r e a s o n a b l e s e c u r i t y o f t enure i 3 i n e v i t a b l e .

1 0 . In v i e w o f the s c a l e on which Fo re i gn Powers a r e

s u b s i d i s i n g t h e i r a i r t r a n s p o r t companies - the t o t a l p r o v i ­

s i on i n French Es t imates f o r subs idy amounts t h i s y ea r t o some

t h r e e t i m e s , and tha t i n German Es t imates t o o ve r f i v e t imes

the B r i t i s h f i g u r e - and the consequent p r o g r e s s of c i v i l

a v i a t i o n abroad as ev idenced by the i n c r eased m i l e a g e f lown

23

and o p e n i n g up o f new r o u t e s , we r e g a r d i t a s i m p o s s i b l e f o r

us t o s t a n d s t i l l . M o r e o v e r we f i n d o u r s e l v e s c o n f r o n t e d b y

t h e ' f a i t a c c o m e l i 1 o f ou r e x i s t i n g c o m m i t m e n t s ?nd t h i s i s a

f a c t o r t o w h i c h we h a v e n e c e s s a r i l y bad t o g i v e g r e a t w e i g h t .

T h e r e a r e a number o f s t a t e - o - v n o d a o r o d r o r . e s i n E n g l a n d

and i n t h e M i d d l e E a s t ( i n c l u d i n g t h e n c i n t e r m i n u s a t C r o y d o a

upon w h i c h a l a r g e c a p i t a l o u t l a y h a s b e e n i n c u r r e d ) , and we

a r e hound b y i n t e r n a t i o n a l a g r e e m e n t t o p r o v i d e f a c i l i t i e s a t

t h e s e a e r o d r o m e s w h i c h i n v o l v e a s u b s t a n t i a l a n n u a l e x p e n d i t u r e

on s t a f f and m a i n t e n a n c e g e n e r a l l y . I t i s u n t h i n k a b l e t h a t we

s h o u l d m a i n t a i n t h e s e a e r o d r o m e s f o r t h e s o l e u s e o f f o r e i g n

c o m p e t i t o r s , and t h a t B r i t i s h a i r c r a f t s h o u l d v i r t u a l l y d i s ­

a p p e a r f r o m them. F u r t h e r s i n c e wc a r e c o m m i t t e d u n d e r

e x i s t i n g c o n t r a c t s t o a c o n s i d e r a b l e e x p e n d i t u r e on s u b s i d i e s

o v e r a p e r i o d o f y e a r s , i t s eems t o u s i m p o r t a n t t o e n s u r e

t h a t t h i s money i s so f a r a s p o s s i b l e p r o ^ i c j f c i v e l r v 3pen t .

I f t h e r e i s no o t h e r a l t e r n a t i v e - and we h a v e r e l u c t a n t l y

r e a c h e d t h i s c o n c l u s i o n - we t h i n k i t p r e f e r a b l e t h a t t h e

p r e s e n t a c n u a l e x p e n d ! t u r e on s u b s i d i e s ( £ 2 3 0 , 0 0 0 ) s h o u l d

be somewhat i n c r e a s e d w i t h a v i e w t o s e c u r i n g r e a l p r o g r e s s ­

b y w h i c h we mean t h o d e v e l o p m e n t o f i m p r o v e d t y p e s o f m a c h i n e

and e n g i n e and t h e o p e n i n g up o f r o u t e s on wh i ch t h e r e i s

l i k e l y i n due c o u r s e t o b e a p a y i n g p a s s e n g e r a n d / o r m a i l

t r a f f i c - r a t h e r than t h a t i t s h o u l d b e f r i t t e r e d away on

u n e c o n o m i c s e r v i c e s o p e r a t e d b y o b s o l e s c e n t m a c h i n e s , w h i c h

seems i n o v i t a b l e i f t h e e x i s t i n g a r r a n g e m e n t s a r e n o t m o d i f i e d .

1 1 , As r e g a r d s t h e q u e s t i o n o f r o u t e s t h e company i s a t

p r e s e n t o p e r a t i n g ( a ) a nr.mber o f c e r v i c e s t o t h e C o n t i n e n t

and ( b ) a s e r v i c e i n t h e M i d d l e E a s t , i n t e n d e d t o c o n n e c t

E g y p t w i t h I n d i a , b u t s o fir-.r ( o w i n g t o d i f f i c u l t i e s w i t h

P e r s i a ) o n l y open b e t w e e n C a i r o aud B u b r o h .

We w e r e i m p r e s s e d w i t h t h e e v i d e n c e p l a c e d b e f o r e us

a s t o t h e d e g r e e o f s u c c e s s w h i c h has a t t e n d e d t h i s l a t t e r

s e r v i o e . I t i s o l s a r that l o n g d i s t a n c e Irr.perial s e r v i c e s

are l i k e l y t o prove l e s s u n p r o f i t a b l e than s h o r t d i s t a n c e

s e r v i c e s t o the Con t inen t on which t h e r e i s n e c e s s a r i l y v e r y

keen c o m p e t i t i o n v.ith e x i s t i n g means o f t r a n s p o r t and v/e

advoca t e a p o l i o y o f c l o s i n g down the l e s s r e m u n e r a t i v e o f

these l a t t e r s e r v i o o s and cone e n t r a t i n g on the g r e a t I m p e r i a l

r o u t e s which awa i t deve l opment , i n p a r t i c u l a r from England

t o I n d i a and Scuto. A f r i c a , f o r which Egypt i s an e s s e n t i a l

Junct i o n e

12o We r e c o g n i s e t h a t the deve lopment of t h e s e I m p e r i a l

s e r v i c e s w i l l e n t a i l an i n c r e a s e i n the amount o f subs idy at

p r e s e n t p a y a b l e , but v/e are s a t i s f i e d t h a t they possess con ­

s i d e r a b l e commerc ia l p o t e n t i a l i t i e s p a r t i c u l a r l y from the

p o i n t o f v i e w o f the c a r r i a g e o f m a i l s * Hor does t h e i r

Impor tance end h e r e -

We f ind t h a t t h e n a t u r a l commerc ia l r o u t e s t o I n d i a and

beyond and t o South Ar f i c -a a r e v i r t u a l l y o o n i n c i d e n t w i th the

g r e a t s t r a t e g i c l i n e s o f a i r communicat ion which are e s s e n t i a l

i f our I m p e r i a l a i r f o r c e s a re to possess the f u l l m o b i l i t y

which i s r e q u i r e d f o r t h e i r economica l d i s p o s i t i o n a t s e l e c t e d

c e n t r e s , whence they w i l l u l t i m a t e l y be a b l e t o r e i n f o r c e any

t h r e a t e n e d p o i n t w i t h a minimum o f d e l a y . I f i t i s n e c e s sa r y

on s t r a t e g i c grounds t h a t we should possess and ma in ta in

a v a i l a b l e f o r i n s t a n t use a l ong cha in o f aei-odromes "between

the d i f f e r e n t p o i n t s of the Empire, i t i s c l e a r l y b e t t e r tha t

they should not l i e f a l l o w aga ins t emergency, but be put t o

p r o f i t a b l e use i n t i m e o f p e a c e . I t i s impor tan t t o

a p p r e c i a t e t h a t , i f c i v i l a v i a t i o n were abandoned tomorrow,

we should s t i l l have t o d e v e l o p and ma in t a in these aerodromes

and the r e q u i s i t e f a c i l i t i e s f o r purposes o f d e f e n c e . Th i s

i s on ly one o f a number o f p o i n t s at which m i l i t a r y and c i v i l

a v i a t i o n r e a c t c l o s e l y one upon t h e o t h e r . Our a t t e n t i o n has ,

f o r example , been drawn t o t.he need f o r the e a r l y deve lopment

o f B r i t i s h a i r t r a n s p o r t i n Egypt , where ^he p r e s e n t e x c l u s i o n

o f f o r e i g n a i r t r a n s p o r t companies , wh ich i s d e s i r a b l e both on

s t r a t e g i c and o t h e r g rounds , i s l i k e l y t o become p o l i t i c a l l y

236 i m p r a c t i c a b l e i n the near f u t u r e .

13 . S i r E r i c Geddes o u t l i n e d t o us a scheme f o r a week ly

a i r m a i l s e r v i c e be tween London and C a l c u t t a and we recommend

t h a t a commencement should bo made w i th t h i s s e r v i c e and that

the A i r M i n i s t r y should be a u t h o r i s e d , i n c o n s u l t a t i o n with

the Treasury , t o n e g o t i a t e nn agreement wi th tho company f o r

i t s o p e r a t i o n as p a r t o f a comprehens ive r e v i s i o n o f the two

e x i s t i n g c o n t r a c t s . iVhi lst i t i s d i f f i c u l t t o form exac t

e s t i m a t e s o f t h e renenue which should accrue from t h i s s o r v i c o

when f u l l y i n o p e r a t i o n , i t i s c l e a r f rom tho e v i d e n c e o f the

Pos t O f f i c e r e p r e s e n t a t i v e t h a t i t should be s u b s t a n t i a l .

a c o n d i t i o n o f o p e r a t i n g t h i s s e r v i c e I m p e r i a l A i rways

w i l l no doubt demand s e c u r i t y o f t enure o v e r a c o n s i d e r a b l e

p e r i o d , and we th ink tha t i n r e t u r n f o r such s e c u r i t y o f

t e n u r e , the Company should a g r e e t o a m o d i f i c a t i o n o f the

e x i s t i n g p r o f i t - s h a r i n g arrangement w i th the Government,

whereby the Excheouer should r e c e i v e a l a r g e r p r o p o r t i o n o f

a v a i l a b l e p r o f i t s a t an e a r l i e r s t a g e than a t p r e s e n t . T h i s

might t ake the form o f Government p a r t i c i p a t i o n i n p r o f i t s

e i t h e r ( a ) from the s t a r t , wha t eve r t h e i r e.mount, or

( b ) a f t e r the s h a r e h o l d e r s have r e c e i v e d a m a t e r i a l l y l owe r

r a t e o f d i v idend than t h a t a t p r e s e n t p rov ided f o r . V7e

recommond that t h e A i r M i n i s t r y , i n c o n s u l t a t i o n w i th the

T r easury , should g i v e s p e c i a l a t t e n t i o n t o t h i s m a t t e r .

14 . I t remains t o cons ide r t h e most impor tan t q u e s t i o n

o f t h e f i n a n c i a l e f f e c t o f our p r o p o s a l s . We should be most

r e l u c t a n t in the e x i s t i n g f i n a n c i a l s t r i n g e n c y t o make any

recommend a t i o n s which would impose an a d d i t i o n a l burdrn on

the Exchequer. The S e c r e t a r y o f S t a t e f o r *JLr, however ,

a n t i c i p a t e s "that as a r e s u l t o f e s t i m a t e s b e ing r e l i e v e d by

the comp le t i on o f c e r t a i n works a t Croydon and o the r c a p i t a l

s e r v i c e s , he would be ab l e t o g i v e e f f e c t t o our recommendations

i f t h e Cabinet wer*" p repared t o a u t h o r i s e t h e s t a b i l i s a t i o n

ove r a 10 year p e r i o d o f t h e C i v i l A v i a t i o n Vo t e o f

237

A i r Es t imates (Vo t e 8 ) a t a p p r o x i m a t e l y i t s p r e s e n t f i g u r e

o f £500,000. The e ? a c t amount i n 1927 Es t ima t e s i s £464,000,

t h i s be ing the ne t f i g u r e a f t e r c r e d i t has been taken f o r

r e c e i p t s from l and ing f e e s e t c . We understand t h a t i t i s

the S e c r e t a r y o f S t a t e ' c i n t e n t i o n t h a t the: a v e rage annual

p r o v i s i o n o f £500,000 ovor a t en y e a r pe r i od should 'be

c a l c u l a t e d on the same b a s i s , and t h a t he c on t emp la t e s tha t

the programme i n any p a r t i c u l a r y e a r should be made the

s u b j e c t of d e t a i l e d d i s c u s s i o n w i th t h e Treasury p r e c i s e l y

as a t p r e s e n t .

W h i l s t we a p p r e c i a t e the need f o r the Cabinet t o a g r e e t o

at l e a s t a t e n - y e a r p e r i o d , i f any c ons i d e r ed scheme o f d e v e ­

lopment i s t o be f o r m u l a t e d , we are not p repared t o reooromend

any s p e c i f i c sum., s i n c e we t h i n k t h i s can on l y be dotermined

i n t h e l i g h t o f the £mount o f subsidy f o r which a s a t i s f a c t o r y

agreement can be n e g o t i a t e d wi th I m p e r i a l A i rways by t h e

A i r m i n i s t r y and Treasury i n c o n s u l t a t i o n .

Y7e sugges t , however , tha t the m i l i t a r y and c i v i l v o t e s

o f A i r Es t ima t e s should he r e g a r d e d as a who le and t h a t i t

should be understood t h a t t h e s t a b i l i s a t i o n o f Vo t e 8 at some

such f i g u r e as t h a t recommended by the S e c r e t a r y o f S t a t e f o r

i v i r should be c o n t i n g e n t on t h e r e b e i n g no r e s u l t a n t i n c r e a s e

i n the t o t a l Exchequer p r o v i s i o n f o r A i r S e r v i c e s .

We make no recommendation as t o the t r e a t m e n t o f any

r e c e i p t s from the proposed London -Ca l cu t t a m a i l s e r v i c e ,

s i n c e t h e i r d i s p o s a l must n e c e s s a r i l y b e c o n t i n g e n t on the

p r e c i s e c h a r a c t e r o f t h e c o n t r a c t negotianted w i th I m p e r i a l

A i rways L td *

233

SUMMARY 0? ;^CpMa^BBPATI.0H3 *

1 5 . Our r e c o m m e n d a t i o n s t o t h e C a b i n e t may t h e r e f o r e

b e summar i s ed a s f o l l o w s ; ­

f a ) T h a t t h e p o l i c y o f c o n c e n t r a t i n g a i r t r a n s p o r t

i n t h e hands o f a s i n g l e company - I m p e r i a l

A i r w a y s L t d * - b e c o n t i n u e d .

(D i T h a t t h e A i r M i n i s t r y b e a u t h o r i s o d i n c o n s u l t a t i o n

w i t h t h e T r e a s u r y t o e n t e r on n e g o t i a t i o n s w i t h

I m p e r i a l A i r w a y s t o m o d i f y t h e e x i s t i n g a g r e e m f n t s

s o as t o p r o v i d e : ­

( l ) F o r g i v i n g t h e company s e c u r i t y o f t e n u r e

o v e r a r e a s o n a b l e p e r i o d o f y e a r s .

( 2 ) F o r t h e d e v e l o p m e n t , i n l i e u o f t h e l e s s

r e m u n e r a t i v e c o n t i n e n t a l s e r v i c e s , o f l o n g ­

d i s t a n c e I m p e r i a l r o u t e s , commenc ing w i t h a

L o n i o n - C a l c u t t a m a i l s e r v i c e .

( 3 ) F o r t h e r e n e w a l o f t h e c o m p a n y ' s f l e e t a t

f r e q u e n t i n t e r v a l s w i t h t h e m o s t ' u p - t o - d a t e

a i r c r a f t .

( 4 ) F o r t h e Gove rnmen t t o s e c u r e more f a v o u r a b l e

p a r t i c i p a t i o n a t an e a r l i e r s t a g e i n t h e

c o m p a n y ' s p r o f i t s ,

( o ) T h a t t h e P o s t O f f i c e shou ld t a k e s p e c i a l s t e p s

t o p r o m o t e t h e s u c o e s s o f t h e L o n d o n - C a l c u t t a

M a i l S e r v i c e .

( d ) T h a t o v e r a 10 y e a r p e r i o d a s u f f i c i e n t amount

s h o u l d b e p r o v i d e d on t h e C i v i l A v i a t i o n V o t e

o f A i r E s t i m a t e s t o p e r m i t o f t h e p o l i c y o u t l i n e d

a t ( l ) , ( 2 ) , ( 3 ) and ( 4 ) o f ( b ) a b o v e b e i n g

c a r r i e d i n t o e f f e c t - t h e f i g u r e t o b e s e t t l e d

a n n u a l l y b e t w e e n t h e A i r M i n i s t r y and T r e a s u r y ,

t o whom each yc-ar 's programme w i l l he co ; municatcd

f o r p r i o r s c r u t i n y and concur rence i n the o r d i n a r y

c o u r s e .

( e ) That machinery should be se t up t o secure t h e

c l o s e s t p a s s i b l e l i a i s o n between the Air m i n i s t r y ,

I m p e r i a l A irways and tho a i r c r a f t manufac tur ing

i n d u s t r y .

( S i g n e d ) P . CUHLIi^E-LISTi iH.

(Cha i rman ) .

2 W h i t e h a l l Gardens, 3. .7.1,

23rd December. 1927,

- 1 0 ­

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