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pressed. John Read then said that he could not see that we had gone very far to meet Mr. King. I answered that I had read the Quebec papers carefully, and that the burden of their attack was that Canada would have to begin work on the seaway, and spend money on the seaway during the course of the war. We were prepared to substitute for the present article 26 one agreeing to a postponement of this work in the Canadian National Section until after the war,

and it seemed to me there was all the difference between an article that Mr. King considered politically unacceptable, and one that he would find politically acceptable.

The next and final point to arise was the agreement between the Dominion and Ontario, which logically should be signed just before the St. Lawrence agreement. Mr. King had a letter from Premier Hepburn,37a saying that other things being equal he would prefer to await signing this agreement until Mr. Hogg 38 had recovered from his accident, say around March 15th, but that if Mr. King felt the matter urgent he could probably find ways to go ahead anyway. Mr. Hogg will be out of the hospital in a little under a fortnight and then plans to go to Nassau for a month's convalescence. I explained that if matters were put off for that length of time, we would lose at least a month out of the short construction season.

In conclusion: Mr. King said that he was most appreciative of the President's understanding of his difficulties, and would push matters as hard and as fast as he could.

[OTTAWA,] February 6, 1941.

711.42157 SA 29/1820 The Canadian Secretary of State for External Affairs (Mackenzie

King) to the American Minister in Canada (Moffat) 39

No. 39

OTTAWA, March 5, 1941. SIR: I have the honour to refer to certain questions which have arisen in the course of the St. Lawrence Waterway negotiations, and which we have discussed recently.

2. As you are aware, my colleagues and I have been giving prolonged consideration to the problems presented by the St. Lawrence Waterway project. We have noted the progress made in the preparation of the engineering plans for the international section and in the drafting of the general agreement. There is, however, one con

872 Mitchell Frederick Hepburn.

88 T. H. Hogg, Chairman and Chief Engineer of the Hydro-Electric Power Commission of Ontario.

* Copy transmitted to the Department by the Minister in Canada in his despatch No. 1211, March 19; received March 21.

409021-59-11

sideration of a fundamental character to which we desire to call attention.

3. The growing intensity of the war operations and the apprehensions that still more serious perils will have to be faced in the very near future, necessitate the most careful examination of any proposed expenditure from the point of view of public need and in the light of war requirements.

4. In existing circumstances, the Canadian Government desires to know whether the Government of the United States is of the opinion, in view of the position in Canada, and, of course, the position in the United States as well, that the project, as outlined in the State Department's proposals of 1936 40 and 1938,41 and under consideration since that time, should now be proceeded with.

5. We have, of course, been fully aware of the desire of the Government of the United States to have a treaty or agreement respecting the St. Lawrence Waterway concluded at as early a date as possible, and negotiations, which have been carried on more or less continuously for some time past, have had in view the desire on our part to arrive, at the earliest possible date, at terms of agreement which would be mutually advantageous. We are also aware of the pronouncements, which have been made from time to time by the President, respecting the added emphasis given by the war to the importance alike of power and navigation developments in the Great Lakes-St. Lawrence Waterway project. We are also duly appreciative of the agreement recently reached between our respective Governments, whereby the Province of Ontario has obtained the right to the immediate use of additional power at Niagara, and the diversion of the waters of the Ogoki and Long Lac Rivers into Lake Superior, in consideration of which, authority was given for the immediate investigation by United States engineers of the project in the international section of the St. Lawrence River in Ontario, in order to enable work of future development to proceed with the least possible delay, once an agreement between the two Governments, respecting the St. Lawrence development was concluded.

6. We would naturally be prepared to give every consideration to power or navigation developments which the United States may deem necessary to the prosecution of measures calculated to aid Great Britain, Canada and other parts of the British Commonwealth of Nations in the present war, or to further the security of the United States itself against possible future events, which, at the moment, cannot be foreseen, but of which in times like the present full account must be taken. We realize that the Government of the United States

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will be as solicitous as our own Government to appraise the project at the present time in terms of its contribution to the efforts which are being put forward by our respective countries to preserve and to restore freedom.

7. It is from this point of view and in this spirit that we would ask that the St. Lawrence project be again reviewed by the Government of the United States before an agreement or treaty be finally entered into. Accept [etc.]

W. L. MACKENZIE KING

711.42157 SA 29/1820

The American Minister in Canada (Moffat) to the Canadian Secretary

of State for External Affairs (Mackenzie King) 42

No. 303

OTTAWA, March 10, 1941. SIR: I lost no time in bringing to the attention of my Government your note of March 5 in regard to the St. Lawrence waterway negotiations. In view of the importance of the question you raised, the matter was laid before the President, and I have been instructed by way of reply, to transmit the following personal message from him

to you:

“I have given careful consideration to your recent request that in view of the growing intensity of current war operations and the apprehension over perils which may have to be faced in the near future, the Government of the United States review the St. Lawrence project and give you an indication of its views as to whether, in the existing circumstances, this project as outlined in the State Department's proposals of 1936 and 1938 should now be proceeded with. “May I say at the outset that I am aware of Canada's increasing

I war effort and I readily agree that it must have first call upon your country's resources and man power. I also agree that in view of the existing situation the most careful examination of any proposed expenditure is necessary from the point of view of the public need and in the light of defense requirements. “With

these considerations in mind, the Government of the United States has as you requested reviewed the St. Lawrence project. We have welcomed this occasion to review the project because of the fact that our own defense program renders it desirable that all public expenditures in the United States be weighed in the light of considerations similar to those set forth in your communication. The Government of the United States is engaged in a great defense program. It is determined to supply such aid in matériel to Great Britain, the members of the Commonwealth and their allies as may be necessary to enable them to bring the war to a successful termina

12

Copy transmitted to the Department by the Minister in Canada in his despatch No. 1211, March 19; received March 21.

tion. Simultaneously our own defenses are being strengthened to the extent necessary to prevent any foe from menacing the security of this hemisphere. It is indispensable that all public projects contemplated by the Government of the United States be considered from the standpoint of their relationship to these supreme objectives.

"The Government of the United States regards the Great LakesSt. Lawrence basin project as directly associated with the accomplishment of the foremost national objectives of this Government. It believes that the project should be proceeded with and that construction should commence at the earliest possible moment. It regards the construction of this project as a matter of vital necessity.

“You refer to the engineering investigation now being conducted in the international section of the St. Lawrence River. I need hardly say that I directed the release of $1,000,000 from the special defense fund for this purpose only because of my conviction that the completion of this project by 1945 might prove of vital importance to our defense effort. It is gratifying that there has been sufficient progress to make possible the initiation of construction this spring.

“I am sure you will agree with me that, while our countries must put forth the maximum immediate defense effort, we must also prepare for the possibility of a protracted emergency which will call upon the industries on both sides of the border to meet constantly expanding demands. The combination of advantages offered by the St. Lawrence project makes it imperative that we undertake it immediately.

"In terms of the time factor, the St. Lawrence project as a part of our defense program is not exceptional, since we are today appropriating money for construction of vessels of war which will not be ready for service until the completion of the St. Lawrence undertaking:

"I am convinced of the urgent need for the large increment in low cost electric power which the St. Lawrence project will provide. Already the demand for power is running ahead of expectations. In fact one of the most serious handicaps to the rapid expansion of airplane production is the difficulty of finding the large supplies of highload factor power required for aluminum production. We are of course expanding our electric facilities for this purpose as fast as practicable but by the time the St. Lawrence power is available other sources of cheap power will have been largely allocated.

“The St. Lawrence project offers by far the soundest and most economical provision for the power requirements of certain portions of our long-range defense program, more particularly for certain highload factor defense industries. Furthermore the manufacturing facilities and skilled labor available for the construction of steel turbines and electric equipment will be needed to meet the requirements of the vast areas of our continent where water power is not so economically available.

"I am also convinced that the opening of the St. Lawrence deep waterway to afford an outlet for naval and cargo ships constructed in Great Lakes shipyards, far from representing a diversion of funds and resources from the defense effort, would have the opposite effect. Our shipbuilding program, to meet the requirements of defense, will call for a great expansion of shipyards with their associated machine shops and adequate supplies of skilled labor. The extent to which intensified submarine and air attacks on convoys may necessitate an expansion of the program is still unknown. If the war is protracted however it seems certain that the number of shipyards required will have to be several times those at present available. In terms of our present industrial arrangements, many of these can be most readily and economically available in the Great Lakes area.

“If the full burden of our expanding ship construction must fall on seaboard shipyards the time required to complete the vessels themselves must, in many instances, be increased by the period necessary to construct new shipyards and facilities. With this in mind it is apparent that the deep waterway could be completed in time to provide an outlet to the sea for many of the new vessels included in the present program.

“In the light of these facts it is my belief that the funds and man power required for the earliest possible completion of the St. Lawrence project could not be better spent for our joint defense effort, including aid to Great Britain. It is my feeling that failure to take advantage of the possibilities of this project would be shortsighted, in no way contributing to an increase in our immediate defense effort, while limiting our defense program in the difficult years which lie ahead." Accept [etc.]

PIERREPONT MOFFAT

711.42157 SA 29/1850a

The Secretary of State to the Attorney General (Jackson)

WASHINGTON, March 13, 1941. MY DEAR MR. ATTORNEY GENERAL: I enclose for your consideration a memorandum prepared by the Legal Adviser of this Department, together with a copy of a proposed agreement 43 between the United States and Canada regarding the Great Lakes-St. Lawrence Deep Waterway Project. It is hoped that an agreement may be signed within the next few days.

I should appreciate it if you would advise me whether you agree that the arrangement may be effectuated by an agreement signed under the authority of the Executives of the two countries and approved by legislative enactments by the Congress and the Canadian Parliament. Sincerely yours,

CORDELL HULL

[Enclosure]
Memorandum by the Legal Adviser (Hackworth) 44

For several years the United States and Canada have had under consideration the feasibility of a joint undertaking for the improvement of the Great Lakes-St. Lawrence Basin so as to make these

* Not attached to file copy of this document; for text of agreement as signed, see p. 159.

Reprinted from Department of State Bulletin, March 29, 1941, p. 364.

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