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(3) A joint cotton committee composed of equal representatives from each country shall be formed for the purpose of supervision and administration of this agreement. The committee shall elect its officers and make all necessary provisions for carrying out its duties. It shall hold an annual meeting and make an annual report to the signatory governments not later than April 1. It may hold other meetings and make other reports as it deems necessary. The date and place of all meetings shall be fixed by the committee but its annual meeting shall be held not later than April 1 following the end of the marketing year. The committee shall make an estimate of the annual Canadian requirement for Upland cotton and report its findings to the signatory governments not later than January 10. The signatory governments shall supply the committee with data and statistical material, when requested, regarding the sales, arrivals, movements, and consumption of cotton in their countries. All such data shall be kept in strict confidence and shall not be released without the permission of the government supplying the data. The expenses of the members of the committee shall be borne by the government they represent, but the expenses of the committee in connection with its duties shall be paid according to a plan mutually agreed upon before such expense is incurred.

(4) This agreement shall take effect on March 1, 1942, and remain in effect for two years thereafter, unless, one of the countries signatory thereto notifies the other in writing of its intention to terminate the agreement at the end of any year. Such notice must be received by such other country not later than 90 days prior to the end of the year. This agreement may be extended for additional periods by mutual agreement of the signatory countries.

561.321D1 Advisory Committee/94a : Telegram

The Secretary of State to the Ambassador in Brazil (Caffery)

WASHINGTON, December 2, 1941–6 p. m. 1249. Dantas has telegraphed his Government a tentative draft agreement for sharing the Canadian cotton market. Please point out to the appropriate Brazilian authorities that this draft, a copy of which is being sent to you by air pouch,30 should not be considered as anything more than a report on the present status of the discussions, and that both the Department of Agriculture and this Department have further questions to raise with regard to it.

HULL

30 Draft printed supra; copy was transmitted in instruction No. 1854, December 4, 1941.

561.321D1 Advisory Committee/95: Telegram

The Ambassador in Brazil (Caffery) to the Secretary of State

RIO DE JANEIRO, December 4, 1941–5 p. m.

[Received 11:13 p. m.] 1907. Department's 1249, December 2, 5 [6] p. m. Ministry of Foreign Affairs which was informed November 30, 5:30 p. m., had apparently been under the impression that the tentative draft agreement as telegraphed by the Brazilian Embassy represented definite and complete proposals. The Ministry says that the draft was discussed with the President by Aranha 31 on December 2 but the President's reaction thereto was not known at the Ministry yesterday.

The Ministry was displeased with the information contained in the Department's telegram number 1249. The Embassy believes that the Brazilian Government is beginning to be concerned with the delays in reaching an agreement but cannot say whether this concern will be translated into more willing and effective collaboration with respect to the cotton problem than has heretofore been evidenced. The Agricultural Attaché believes on the basis of information from well-informed trade sources and first-hand observation in limited areas in São Paulo last week that if favorable growing conditions continue, the new crop in that state will at least equal last season's and may exceed it by 5 to 8 percent. The loan levels for the 1941–1942 crop with privilege sale to the Government at the end of the initial financing term of 6 months reported in the Embassy's telegram number 1650, November 3,32 are unquestionably well above average production costs. The São Paulo Cotton Growers Association recalled to the President when he visited São Paulo last week the Government's promises with respect to financing and purchase of the coming crop. No regulations have yet been issued for the implementing of this program and it is not known how large scale Government purchases would be financed.

CAFFERY

AGREEMENT BETWEEN THE UNITED STATES AND CANADA REGARD

ING THE GREAT LAKES-ST. LAWRENCE WATERWAY, SIGNED MARCH

19, 1941 as

711.42157 SA 29/1843

Memorandum of Conversation, by the Minister in Canada (Moffat)

A few hours after my return from Washington this afternoon I called on the Prime Minister 34 and told him that I had seen the

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Oswaldo Aranha, Brazilian Minister for Foreign Affairs. Not printed. ** For previous correspondence, see Foreign Relations, 1940, vol. III, pp. 148 ff. President as he requested and had given him the full story of Mr. King's difficulties in connection with the St. Lawrence agreement.

*W. L. Mackenzie King, Canadian Prime Minister and Secretary of State for External Affairs.

I explained that the President, after considering all the factors involved, was glad to meet his preoccupation, at least in major part.

He asked me to say that he agreed with the Prime Minister's suggestion that we proceed at once with the International Section, which we both recognize as an immediate war necessity in view of the growing demand for power for Canada's war industry and for our defense industry. He would have liked to go ahead with the Seaway now, because it would tap a wide area in the Great Lakes where we could build shipping, both merchant shipping, and under our new interpretation of the Rush-Bagot Agreement,35 naval shipping. But the President deferred to Mr. King's judgment that that can't be done at the moment. He deferred to his judgment that it would be hard for him to answer the questions of whence the men? whence the money! and how does this fit into the all-out effort that Canada is making? He deferred to his judgment that it might even endanger the political situation in Quebec and bring about an accumulation of political developments in Canada that would be regrettable. He would not wish to subject Mr. King to this type of strain, even though he would have liked to keep matters as in the present draft, and thinks that events may prove that both were mistaken in making any alteration. He therefore was ready to withdraw the present articles dealing with this question, and to substitute others which are based on a postponement of the building in the Canadian National Section of the Seaway until after the war. This met the Prime Minister's essential preoccupation.

But Mr. King's memorandum went even further and implied a suggestion that we postpone any “consideration of obligation” to go ahead with the Canadian National Section until after the war. But here we run into our American problems which are as acute as Canada's. These fall under four heads:

1. The President's commitment in his message to Detroit.36 2. The interest in the Lake states in the Seaway. 3. Moral obligation flowing from the Ogoki Diversion Agreement.87

4. Necessity of retaining in the present draft some future leverage on Quebec in order to justify present expenditures in the International Section.

85 Signed at Washington, April 28–29, 1817, Hunter Miller (ed.), Treaties and Other International Acts of the United States of America, vol. 2, p. 645.

30 President Roosevelt's message to the Great Lakes Seaway and Power Conference at Detroit delivered by Assistant Secretary of State Berle, December 5, 1940; for text, see Department of State Bulletin, December 7, 1940, p. 518.

Effected by exchange of notes signed October 14 and 31, and November 7, 1940; for texts, see Department of State Executive Agreement Series No. 187, or 54 Stat. (pt. 2) 2426.

87

To summarize: We feel that within reasonable limits we can agree to latitude as to time if we have a post-war commitment. We can probably accept various formulae to gild the pill and help with Canada's political problems, provided our Great Lake states can know that the Seaway will eventually come. If Mr. King considers that an explanatory exchange of letters with the President would help, this could undoubtedly be arranged, though such letters would have to be phrased on an entirely different basis from the one he had discussed last week, which was to justify at this moment the immediate war need for the Seaway.

I had come back not with any formula for drafts of substitute articles, because one can't change negotiators in the middle of a negotiation. Bringing in a new man invariably complicates a situation. But if the Prime Minister agreed with us that the compromise suggested, with necessary drafting safeguards, meets the issue, we are prepared to send up our negotiators with plenary powers, who can agree if a meeting of minds is reached, to clinch matters then and there. I thought we were all in accord that from this point on speed is essential, both politically and in order to get the work started on the power dam with the least delay.

Mr. King said that this picture of our position was most helpful. He had hoped to be able to postpone any commitment on the seaway, but he had not realized our difficulties, and of the four reasons I had advanced for the need of a post-war commitment the one that he seemed to fasten on was the moral obligation arising out of the Ogoki diversion.

After again reciting a long tale of woe about opposition to any move on the St. Lawrence in Quebec,—where Mr. McConnell, owner of the Montreal Star, was on the point of joining the Gazette in an editorial attack on the Government on this issue,-he finally said he personally thought we could now go ahead, though he could do no more than express a personal opinion until after he had consulted Cabinet. He would do this at the earliest moment possible and would let me know as soon as they approved in order that I could send for the American negotiators.

When I used the expression "clinch matters then and there” did I mean by any chance that we would be ready to sign the agreement ? I said that we would be ready to sign if Canada were.

He then said that he had forgotten to raise a very important point with me last week,-namely his preference for a Treaty as opposed to an agreement. I went over the familiar arguments with him, but found that he was much less interested in our Constitutional niceties, than he was in finding an argument to explain why the United States, being presumably so eager for the agreement, should be seeking a short

cut or an easier way to bring it into force. Wouldn't this give rise to an ugly suspicion that it was really Canada that was pushing the St. Lawrence accord, rather than the United States? If this impression should ever prevail, it would be most serious for him. Could I not give an explanation he could use in public as to why we preferred to proceed by way of legislation rather than by way of treaty ratification. I said that he could emphasize the time element: that after a Treaty had gone through the Senate, it would be necessary in any event to introduce an appropriation bill in the House of Representatives and see this through both Houses; this double procedure might well take up so much time that we would not be able to start work until the spring was well advanced. If, however, we could sign an agreement, we could forego one lengthy legislation step. The Prime Minister said that from his point of view, this time-table argument was decidedly helpful and he no longer pressed this phase of the problem.

I then brought up the question of where the agreement should be signed and explained our reasons for preferring Ottawa. Again he said that his one objection to signing in Ottawa was that it might look as though it were a Canadian initiative that was resulting in the agreement rather than an American initiative. The question of asking for new full powers did not disturb him at all. He asked us, however, to let this point lie over for the moment.

Next we took up the Rush-Bagot letters. He said he was agreeable to making them public at an opportune moment. He thought that to do so at the time of signing the St. Lawrence agreement was an excellent idea.

At this point, Mr. King sent for Norman Robertson, the new acting Under Secretary of State, and John Read, the Department's Legal Adviser, and summarized the entire conversation for their benefit.

Norman Robertson had no observations to offer, but John Read was inclined to be obstructive. He asked if we were prepared to exchange letters justifying the immediate war need of work on the International Section. I said that heretofore we had gone on the assumption that additional power was a direct and self-evident war need; only the war need for work on the seaway had been under discussion, but if such an exchange of letters would be of help, I was sure we would raise no difficulties whatsoever. He then reminded the Prime Minister that even the International Section, although the bulk of the work would be done by the United States, would cost Canada about $20,000,000, of which relatively little would have to be budgeted for this year, but a lot for next year. I asked what proportion of the cost this would represent, and he admitted that it was a very small percentage. The Prime Minister did not seem im

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