Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

611.42321 SL/8–1954: Despatch

No. 996
The Chargé in Canada (Bliss) to the Department of State

official use only
air priority
No. 122

Ottawa, August 19, 1954.

• Subject: St. Lawrence Seaway Discussions, Ottawa, August 1954

Summary:

An Ottawa conference of United States and Canadian officials on August 12–14 completed the arrangements by which the two countries will cooperate in building the St. Lawrence Seaway. The exchange of notes, signed on August 17,¹ recognizes the right of the United States to construct the works called for by the Wiley–Dondero Act (i.e., all works in the International Rapids Section) and Canada’s right to construct the whole seaway from Montreal to Lake Erie as established by the Exchange of Notes of June 30, 1952. However, Canada will not exercise this right in the International Rapids Section until conditions warrant, except at Iroquois where Canada intends to construct its own works on Canadian territory in order to establish its position as a participant in that section of the Seaway. External Affairs Minister Pearson recognized that these might be paralleled by United States construction there and expressed the hope that the United States would not proceed with the Iroquois works at this time. While the United States could not give the treaty on navigation rights for shipping passing through the U.S. sections of the Seaway which the Canadians desired (such a treaty would be unconstitutional), it did agree to consult before enacting new laws or promulgating new regulations which would affect such shipping. In this connection, Pearson made the point that unreasonable interference with Canadian shipping in U.S. facilities would be sufficient reason for Canada’s completing the Seaway in its own territory.

United States and Canadian officials met in Ottawa August 12–13 to complete the arrangements by which the two countries would cooperate in building the St. Lawrence Seaway. The ten-man American group was headed by Deputy Defense Secretary Anderson and included James C. H. Bonbright, Deputy Assistant Secretary of State for European Affairs, and Lewis Castle, Administrator of the St. Lawrence Seaway Development Corporation. The Canadian group was headed by External Affairs Minister Pearson and included Trade and Commerce Minister Howe, Transport Minister Marler, and Lionel Chevrier, president of the St. Lawrence Seaway Authority. A complete list of American and Canadian participants is Enclosure No. 1.² Enclosure No. 2 is a digest of the record of the discussions.

Prior to these discussions there had been on July 23 a Washington meeting of United States and Canadian legal experts, which had served to clear the air of false expectations and had increased both sides’ awareness of the major conditioning factors: for the United States, the strict limits of the Wiley–Dondero Bill and the desire not to open it up in Congress; for Canada, the political fear of the harassing public pressure for an all-Canadian seaway.

Consequently, the discussions initially moved rapidly, and in the first two hours most of the items on the agenda had been disposed of by reiterating the positions which had been taken at the first meeting July 5–6:

a) the $15 million contribution to the power entities (barring joint tolls, Canada is left to foot the bill);

b) the fourteen-foot Canadian waterway (Canada is undecided whether to continue it; United States is interested in toll decision, if so);

c) consultation on parallel facilities (agreeable to both countries);

d) navigation rights (United States is agreeable to consultation, but a special treaty would be unconstitutional);

e) effects of modified arrangements on the International Joint Commission order (both agree no reference need be made); and

f) the policy on tolls (United States favors joint tolls, Canada separate tolls; decision left for future).

Just before lunch, August 12, Pearson distributed the Canadian “haymaker”, an Aide-Mémoire (Enclosure No. 3) which embodied the Canadian ideas for a possible modification of the Exchange of Notes of June 30, 1952 to the effect that the United States would construct as directed by the Wiley–Dondero Act; that Canada would construct a 27-foot seaway from Montreal to Lake Erie except for Thousand Islands dredging and Barnhart Island navigation works. In this way for the first time in the discussions Canada announced that it intended to build a canal and locks in Canadian territory at the Iroquois control dam. The Canadians orally expressed the hope that the United States would forego or delay its construction at Iroquois or get the Wiley–Dondero Act amended to permit this.

Pearson expressed the intention of his group: “We do want to participate in the international section. It puts us in a better position to meet public opinion for a through-Canadian seaway … and indeed to build for that all-Canadian seaway of the future.” Howe, later on, was even more explicit, “We have come to the conclusion that this is what we can get away with politically. We suggest that the United States in a note might say that the Administration would seek to amend its Act to avoid duplication.”

The Aide-Mémoire was phrased in language clearly directed at Canadian public opinion and was regarded by the Americans as unsuitable in an intergovernmental exchange, which Mr. Anderson felt should be limited to factual statements. The American group went into a huddle at luncheon and agreed that Canada had a right to build as it wished at Iroquois and further that the United States had to reserve its right to build also at Iroquois by the terms of the Wiley–Dondero Act. Accordingly, a document entitled “Draft” (Enclosure No. 4) was prepared which set forth the agreed decisions in the simplest possible language, and this was handed to the Canadians during the afternoon of August 12. The afternoon discussion clearly revealed the divergent points of view. The United States wished to state the basic relationships in an exchange of notes and thereafter each country would shade its announcement to its own people in whatever light it chose. Canada wanted both the note and announcement phrased to underline its positive intention to construct the all-Canadian seaway when feasible.

Meanwhile, during lunch, a small group of American and Canadian members had conferred to produce a “Draft Consultation Clause” (Enclosure No. 5), which was to be a part of any agreed exchange of notes as a substitute for a Navigation Rights Treaty.³ This was considered briefly in the afternoon and was generally agreeable to both sides although a few changes were suggested such as “administering” for “imposing or enforcing”.

By the end of August 12 the real question was not the basis of a new exchange of notes, but the form in which it was to be presented. Accordingly, the Canadians prepared for the August 13 discussions a Draft Canadian Note (Enclosure No. 6). Mr. Anderson accepted this as a useful indication of the Canadian approach to the problem and suggested that both sides exchange ideas without haste. He proposed that paragraph 3 of the Draft Note might be rephrased to read more like the lettered portion of the United States “Draft” of the day before. The Canadians did not care for this, or for other small amendments which were incorporated into the United States Draft for the Canadian Note (Enclosure No. 7). Pearson and Anderson recognized that the problem of “presentation” would take more time, and it was agreed that Governor Brucker and Mr. Yingling would remain with Mr. Bliss in order to draft a mutually agreeable exchange of notes with Messrs. Wershof, Bryce, Pelletier, and Cote. During the evening of August 13 and on August 14 this group worked out acceptable texts for the final exchange of notes (Enclosure No. 8), which were signed on August 17 and forwarded to the Department of State in Despatch No. 118, August 18, 1954.

An important aspect of these final discussions was the interpretation of three points relating to the Canadian note which Mr. Wershof argued should be clarified for the record:

1) Canada hopes that the United States may decide not to build its own canal and locks at Iroquois at this time, thereby avoiding duplication.

2) Unreasonable or unwarranted interference with, or delays to, Canadian shipping in United States facilities will be sufficient reason for Canada’s completing the Seaway in its own territory, under section 4a of the final Canadian Note.

3) If the 14-foot canal is continued, consultation on the “question of levying tolls” means consultation if it is to be toll-free, not consultation on the level of the tolls.

Mr. Wershof wanted to embody these points in a letter to the United States. Governor Brucker opposed this because of the onus attached to “special” codicils in the United States, and Mr. Bliss pointed out that at least the first of these points could be made in the Canadian press release. However, Wershof felt that a letter would be necessary to avoid misunderstanding in the future. A digest of these final drafting sessions is a part of Enclosure No. 2 (prepared by Don C. Bliss).

Subsequently, on August 17 the drafts of the press releases⁴ were exchanged preliminarily. The Canadian release contained references to the first two points in a blunt, rude form. Mr. Anderson felt this would make his position difficult with Congress, and, through Mr. Bliss, sent a personal request to Mr. Pearson that he eliminate these and also that he not send a letter. Pearson modified the press release phraseology, although still making clear his first two points, and said that he would “think it over” about the letter. On August 18 the revised press releases⁵ were distributed and Pearson held a press conference, underscoring all three points for the benefit of the newspapermen. Notes of the press conference are Enclosure No. 9.

For the Chargé d’Affaires:

George S. Vest

Second Secretary of Embassy

1. Note No. X–214 from Pearson to Bliss, and the Chargé’s answering Note No. 38, both dated Aug. 17, when added to the exchange of notes of June 30, 1952 (see Document 944), comprised a formal agreement between the United States and Canada. The notes of Aug. 17 are printed in Department of State Bulletin, Aug. 30, 1954, p. 300. The entire agreement is printed in 5 UST (pt. 2) 1784.
2. None of the enclosures to this despatch is printed.
3. The “Draft Consultation Clause” was incorporated in the Aug. 17 agreement with slightly altered wording as part of the Canadian note referred to in footnote 1 above.
4. Not found in Department of State files.
5. For text of the U.S. press release dated Aug. 18, see Department of State Bulletin, Aug. 30, 1954, p. 299.