611.9194/12–2554: Telegram
The Chargé in India (Kennedy) to the Department of State
priority
864. Following is text of letter and memorandum referred to Embtel 8361 and requested Deptel 791:2
Verbatim texts.
“My dear Mr. Ram,
“December 20, 1954
“In a letter to the Foreign Secretary dated November 30, 1954, Ambassador Allen made a proposal for an interim arrangement which would permit continued United States airlines operations in India. This proposal was rejected by the Government of India in a letter to the Ambassador dated December 5, 1954. I am now asked by my Government to discuss with the appropriate authorities of the Government of India another proposal relating [to] this matter and for this purpose I attach a memorandum outlining it. This suggestion has been communicated to the Foreign Secretary by letter of the same date.
“The United States Government has considered urgently the rejection of its proposal of November 30 and, in the profound belief that it is to the mutual benefit of both governments that severance of IndoUS commercial aviation be avoided, makes the attached proposal as the result of a searching reappraisal of the problem.
“I sincerely hope that there may be a favorable reply to this suggestion. If there are any questions relating to it, I would appreciate an early opportunity for discussion. Signed Kennedy”.
“United States airlines operations.
“It is proposed that the procedure for the filing of schedules under Article VII (b) of the existing 1946 Air Services Agreement be revised so that if the aeronautical authorities of one party object to an increase of existing service by an airline of another party, those authorities may immediately bring about an intergovernmental consultation of the type referred to in Articles IX and X of the agreement in order to examine the proposed increase in service in the light of the provisions of the agreement. The new service would go into effect thirty days after filing unless, by intergovernmental agreement arising prior to that date, it was determined that the proposed new service was not warranted. However, if the consultation is not concluded before the effective date of the new schedule, it could be operated until agreement to continue or cease operations is reached, or, if there is no agreement at the end of the consultation, until the Government of India imposes unilateral restrictions under Article IX. In the case of consultation on existing schedules, they may continue until agreement to the contrary is reached, or, if there is no agreement, until the Government of India imposes restrictions.
“Under this procedure the United States would be prepared to begin consultations regarding the proposed new service before its inauguration, and, in the consultations, to utilize the traffic experience derived [Page 1808] from operations at the level of service existing at the time of notice of the proposed increase was given to the Government of India rather than that from operations at the proposed new level.
“The above proposal is made on the basis that, if satisfactory, the Government of India will withdraw its present termination notice made under Article X (e).”
Following are letter and memorandum I sent Jha, Secretary, Ministry of Communications, yesterday on basis of Deptel 791:
Verbatim texts.
“In accordance with our conversation of this afternoon I am attaching a paper setting forth proposals which my Government has suggested be considered in elaboration of those conveyed to the Minister of Communications with my letter of December 20, 1954.
“It is hoped that these additional proposals may permit our two governments to reach a satisfactory agreement on this question, a solution of which appears to be so desirable for both of us.
“A copy of the attached paper is being sent to the Secretary General, Sir Raghaven Pillai.”
“United States airlines operations.
“(Addendum)
“It is further stated that the United States Government would be willing to have a brief capacity consultation in New Delhi following January 1, with regard to the services now existing, with the understanding that such consultation would end prior to January 14. It is understood that if mutual agreement regarding justified levels of United States carrier service is not reached during this consultation, the Indian Government would have the unilateral right to impose restrictions. In this consultation the United States would find itself in a position to meet the point of view of the Government of India by a reduction in United States services to two weekly flights for each carrier. With regard to arbitration (Article XI), the United States Government would be prepared to agree to a provision for submitting disputes to a tribunal of three arbitrators, one chosen by each side and the third chosen by the two already selected, for an advisory report.
“The above suggestions are subject to the Government of India’s acceptance of the proposal already made and as modified above, and consequently to a withdrawal of the termination notice.”