Foreign Relations of the United States, 1958–1960, Western European Integration and Security, Canada, Volume VII, Part 1

291. Memorandum of Discussion at the 376th Meeting of the National Security Council⁰

August 14, 1958.

[Here follows a paragraph listing the participants at the meeting.]

1. U.S. Relations With Canada (NSC Action No. 1876; Memos for NSC from Executive Secretary, same subject, dated June 12 and July 16, 1958)¹

Mr. Gordon Gray, Special Assistant to the President for National Security Affairs, briefed the Council and gave the background of the problem of a national security policy statement on Canada. To illustrate the types of problems which might be dealt with if the Council were to undertake the formulation of a policy with respect to Canada, Mr. Gray summarized six such problems and the questions under each which might be examined in a policy statement. (A copy of the statement of problem areas is filed in the minutes of the meeting, and another is attached to this memorandum.)² In concluding his briefing of the Council, Mr. Gray reminded the members that the discussion of this agenda item was expected to lead to a decision as to whether or not the Council would direct the formulation by the NSC Planning Board of a policy paper on Canada. (A copy of Mr. Gray’s briefing note is filed in the minutes of the meeting, and another is attached to this memorandum.)³

The President scanned the paper on problem areas with respect to Canada which had been distributed, and expressed doubt as to whether the NSC was the proper body to deal with certain of these problems. He particularly doubted the appropriateness of NSC consideration of the first problem, entitled “Canadian Dependence on U.S. Trade and Investment”. Mr. Gray said that certain members of the Planning Board did not believe that it would be fruitful to explore this question. Secretary Herter intervened to express doubt as to whether it was worth while to consider the third problem—namely, “Inadequate Understanding by the Canadian Public of U.S. Policies”.

Continuing his scrutiny, the President stated that only the fifth and sixth problems—namely, “Canadian Access to Nuclear Weapons in Peacetime” and “Greater Exchange of Information on Non-Military Defense”—seemed to him plainly to have national security implications.

Mr. Gray replied by pointing out the national security implications of certain U.S. import restrictions which affected Canada (the second problem). Certainly restrictions on the import of Canadian oil had implications for U.S. security. Secretary Weeks pointed out, with respect to oil imports, that the U.S. Government does not restrict imports of oil from Canada per se. There was, however, an over-all quota on the import of oil. Canada had not yet suffered from the imposition of this worldwide quota, and he doubted very much whether Canada would suffer from it in the future. Mr. Gray agreed that Canada had not been hurt by the application of “voluntary import quotas” on oil, but nevertheless the Canadians were not very happy about the import quota on oil. Mr. Gray also pointed out that the fourth problem—that is, “Use of Canadian Contractors and Equipment”—likewise had a national security aspect, inasmuch as it dealt with military construction and equipment. The President expressed the opinion that inasmuch as this construction took place in Canada, some leeway should be allowed for the use of Canadian equipment and contractors.

The Council discussion then switched to the matter of import restrictions on aluminum. On this point the President expressed the opinion that if there were any widespread expectation that production in this country in a future war was going to win that war as production had won World War II, then all the principles on which we were now preparing ourselves for the contingency of a third world war, were false. The President stated his belief that the next war, if it occurred, would not be a war of production.

Turning to the alleged inadequate understanding of U.S. policies in Canada, the President expressed similar doubts as to the genuineness of the problem. He pointed out that the Conservative Party in Canada had largely based their successful political campaign on a platform of reducing Canadian dependence on the United States. The whole issue was largely politics, and the Canadian Conservatives themselves did not believe what they had said. With respect to the desirability of high-level visits by U.S. officials to Canada, the President pointed out that in addition to many others, he himself had made two or three visits to Ottawa since he had become President. Mr. Gray commented that the Planning Board simply believed that it would be desirable to increase the number of such high-level visits.

Apropos of the problem of U.S. investments in Canada, Secretary Weeks pointed out that the Canadian exchange was constantly at a premium, which indicated that the Canadian economy was certainly not suffering. Secretary McElroy commented that this premium was caused by heavy U.S. investment in Canada and, rightly or wrongly, this was the problem which worried the Canadians. Secretary Herter observed that this was essentially an internal Canadian problem, about which the United States could do little or nothing. Secretary McElroy expressed agreement.

With regard to the role of information to correct Canadian misunderstanding of U.S. policy, Mr. George Allen pointed out that we do all we can to spread information about U.S. policies in Egypt. Even so, we were lucky if we could get as many as 10,000 Egyptians listening to Voice of America broadcasts. On the other hand, there were millions of Canadians who listened every day to U.S. radio and television programs. Accordingly, in his judgment merely spreading more information about the United States was not likely to do much to improve Canadian understanding of this country. The President agreed with Mr. Allen, and said that of course people mostly believe what they want to believe. The reactions of most people were based on emotion rather than on logic.

Secretary Benson said it seemed to him that the suggestion of periodic consultation between U.S. and Canadian officials had very great potentialities for good, particularly among officials at the operating levels. Secretary McElroy agreed, and Secretary Benson continued by pointing out that in agriculture, which had been a sore spot in U.S.-Canadian relations, the problem had recently eased somewhat. Canadian stocks of wheat had been reduced last year even more than our U.S. stockpiles.

The President stated his agreement that the more meetings we could have between members of the U.S. and Canadian Cabinets, the better it would be for both countries. Such meetings should become a habit. As for correcting misunderstandings of U.S. policies, the President expressed the opinion that it was up to the Canadians themselves to disseminate correct information on our policies, rather than for the United States to undertake to do so.

Secretary Anderson stated that in the financial field the U.S. Treasury has had very good relations with its Canadian counterpart. The arrangements were very simple. We telephone each other every time there seems to be the likelihood of a misunderstanding. Going on, Secretary Anderson pointed out that the Canadians were scared to death that the United States will secure a substantial investment in the Canadian banks and insurance companies, and Secretary Anderson said he could not blame them. Lastly, Secretary Anderson pointed out that the Canadians do not like the practice by which a U.S. company establishes a branch in Canada and then informs Canadian citizens that the only way that they can share in the profits of the new Canadian company is to purchase stock in the U.S. parent company. This seemed to Secretary Anderson a readily understandable irritation. Secretary McElroy thought so too, but pointed out that this, again, was not an easy problem to solve.

Summing up the consensus, Mr. Gray suggested that the Planning Board address itself to the oil and aluminum problems only, keeping in touch, in the matter of oil, with the President’s Cabinet Committee. The policy paper would also include the fourth, fifth and sixth problems, but would eliminate the first and third problems.

The National Security Council:⁴

a. Discussed the subject on the basis of the “List of Problem Areas With Respect to Canada” prepared by the NSC Planning Board in accordance with the procedure set forth in the reference memorandum of June 12, 1958, and transmitted by the reference memorandum of July 16, 1958.

b. Directed the NSC Planning Board to prepare, for consideration by the National Security Council, a statement of U.S. policy with respect to the following aspects of U.S.-Canadian relations: U.S. Restrictions on Imports of Oil and Aluminum Which Affect Canada, Use of Canadian Contractors and Equipment, Canadian Access to Nuclear Weapons in Peacetime, and Greater Exchange of Information on Non-Military Defense.

c. Noted the statement by the Special Assistant to the President for National Security Affairs that the President’s Special Committee to Investigate Crude Oil Imports would be invited to participate in the work of the Planning Board pursuant to b above as it relates to the subject of U.S. import restrictions on oil which affect Canada.

[Here follow agenda items 2–5.]

S. Everett Gleason

0. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret; Eyes Only. Prepared by Gleason on August 15.
1. NSC Action No. 1876, March 15, directed the Departments of State and Defense and the Office of Defense Mobilization to study and report to the Council on the need for a policy statement on U.S. relations with Canada. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council) The June 12 memorandum circulated various letters among the three agencies and a statement by Gray that the Department of State believed there was no need for a statement of policy, while the other two agencies believed there was. (ibid., S/S–NSC Files: Lot 63 D 351, NSC 5822 Series) The July 16 memorandum transmitted a “List of Problem Areas with Respect to Canada/’ which enumerated the following six questions: 1) Canadian dependence on U.S. trade and investment; 2) U.S. import restrictions which affect Canada; 3) inadequate understanding by the Canadian public of U.S. policies; 4) use of Canadian contractors and equipment; 5) Canadian access to nuclear weapons in peacetime; and 6) greater exchange of information on non-military defense. (ibid.)
2. Not printed. This document was a two-page summary of the July 16 memorandum cited in footnote 1 above. The minutes of all National Security Council meetings held during the Eisenhower administration are in the National Archives and Records Administration, RG 273, Records of the National Security Council, Official Meeting Minutes File.
3. Not printed. The briefing note traced the steps taken with regard to the question of U.S. policy toward Canada since NSC Action No. 1876 had been issued.
4. Paragraphs a–c constitute NSC Action No. 1964, approved by the President on August 18. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)