Foreign Relations of the United States, 1961–1963, Volume XIII, Western Europe and Canada

418. Memorandum of Conversation⁰

Washington, February 20, 1961, 12:05 p.m.

SUBJECT

• Visit of Canadian Prime Minister Diefenbaker

PARTICIPANTS

• The President
• The Honorable Dean Rusk, Secretary of State
• The Honorable Livingston T. Merchant, Ambassador-designate to Canada Prime Minister Diefenbaker
• The Honorable A. D. P. Heeney, Ambassador of Canada
• The Honorable Howard C. Green, Secretary of State for External Affairs

The meeting began about 12:05 in the President’s office and ran until a few minutes after one when the participants moved to luncheon in the family dining room. During luncheon the conversation was general and lasted until about 2:45 when the Prime Minister and his party departed the White House.

After an opening exchange of greetings the Prime Minister inquired of the President concerning his view on the situation in the Congo. The President asked Mr. Rusk (who had just come from a telephone conversation with Ambassador Stevenson in New York) if he would describe the present situation. Mr. Rusk did so at some length, pointing out the extremely damaging effect on progress toward a consensus at the United Nations which had been done by the just reported murder of seven more political enemies of Kasavubu. The Secretary went on to say that there were really two situations, the one in New York at the United Nations where feelings ran high and the other on the ground in the Congo. These two were not always in focus. Indeed in New York there was an excess of nationalism and in the Congo the absence of sufficient Congolese nationalism made it extremely difficult to find the foundation for a broadly based, effective government. There was considerable further discussion of the situation and the prospects, with the President and Mr. Rusk making clear what United States objectives were both with respect to the Congo and support for the United Nations and its Secretariat. Mr. Diefenbaker and Mr. Green seemed extremely interested in the discussion and in complete sympathy with United States purposes. In response to a question from the Prime Minister, the President confirmed that we would support a demand that Belgian military personnel, whom he described as freebooters and soldiers of fortune, be removed but were anxious to insure that under some arrangement covered by the United Nations the several thousand Belgian civilian technicians and advisers be retained.

The Prime Minister spoke of the coming meeting in London of the Commonwealth Prime Ministers and the problem created by the necessity of the Union of South Africa seeking readmission to the Commonwealth now that it had determined to become a republic. He said that this question of its readmission would cause great difficulty with the colored members of the Commonwealth and that it placed him in a very difficult position. He indicated his view that the Commonwealth could only prosper if its members pursued enlightened racial policies. The President acknowledged the problem posed and smilingly said that in this case it was fortunate for us that the United States was not a member of the Commonwealth.

The Prime Minister then raised the question of Laos, noting that the United States apparently preferred the establishment of a neutral nations commission rather than the recall of the ICC. The President and Mr. Rusk explained the pursuit of a U.S. policy to achieve a genuinely independent neutral Laos which would not be pro-Western to a degree to disturb its Communist neighbors. Mr. Green expressed some skepticism as to whether our proposal would be acceptable to the Soviets. Mr. Rusk replied that he felt there was at least a chance of this if we were able to convince the Communists of the absence of any desire on the part of the West to dominate Laos or build military bases there or otherwise militarily align it with the free world. Mr. Green noted that Canada had not been enthusiastic over the restoration of the ICC but was willing to do its duty. He also remarked that he understood the Indians have been considerably put out by our neutral nations commission.

The Prime Minister then raised the question of Communist China by inquiring of the President whether the United States had undergone any change of views with respect to Communist China and its recognition or admission to the United Nations.

The President replied that any feeling that it might be possible to move in a new direction with respect to Communist China had been checked by the virulence of the Chinese Communist propaganda attacks on the new Administration. He mentioned his earlier expressed belief that it was desirable to associate Peking with the nuclear test negotiations, as well as the possibility earlier considered of the opening of some trade and the reciprocal admission of journalists, as possible moves which might have reduced tension. Any such hopes, however, had been dashed by the hardening line developed by Peking against the United States in the past month.

The Prime Minister expressed himself as unable to understand the basis for this attitude by the Chinese Communists.

The President went on to cite Chou-En-lai’s interview with Edgar Snow¹ as reflecting the absence of any interest on the part of Peking in a two-China solution. It was difficult to see any solution acceptable to us to which the Chinese Communists would be amenable. We will proceed next month with resumed talks in Warsaw with the Chinese Communists, but their belligerence so far would seem to indicate no desire on their part to reach an accommodation. Under the circumstances it was hard indeed to see how one could contemplate bringing them into the United Nations, and certainly the United States had no intention of abandoning Formosa.

The Prime Minister commented that he fully appreciated that, were the United States to sacrifice Formosa, the position of the free world throughout all of Asia would be destroyed. The President agreed heartily. The Prime Minister inquired whether the President saw any alternative courses of policy. The President repeated that, whereas we were anxious to ease tensions, it was difficult to see how this was possible at present.

The Secretary of State mentioned that not only in words but in actions were the Chinese Communists taking a hard line. He referred to the fact that only Snow had received a Chinese visa out of thirty correspondents who had U.S. passports validated for travel to China. He also referred to the harsh terms in which Peking repulsed the Quakers’ offer of food for China.

The Prime Minister mentioned the experience of the Globe and Mail whose editor had traveled several years ago to China and thereafter had become an enthusiast for recognition of Peking. Parenthetically the Prime Minister said that he considered it had been a mistake by Canada not to have recognized the Chinese Communist regime ten years ago when such action would have been a simple juridical act. Today, however, it could not be done without it being construed as a formal act giving political approval to the Chinese Communist regime. He went on to say that the Globe and Mail had opened an office in Peking but six months later their representatives had been thrown out and the office closed down.

The Prime Minister then said that he did not intend to talk trade today but he did wish to make one point. This was that Canada’s policy is to trade with all Communist countries in goods other than those which had strategic importance. In the case of Cuba, however, Canada was going further then this criterion by forbidding transshipment through Canada of goods originating in the United States. He added that Canada was not expanding trade with Cuba and cited figures of the last few years to demonstrate this. He noted that U.S. trade with Cuba, which is confined to food and medicines, even currently is running several times the volume of Canadian exports to Cuba.

The Prime Minister then noted his desire to invite the President to Ottawa to address a joint session of Parliament. He said that if the President spoke along the lines of his address in New Brunswick several years ago² it would do untold good. He went on to say that Canada reads quantities of news about the United States and welcomes the President every week via TV into its living rooms but that Canadian news gets less treatment in the United States than that from a “banana republic.” He went on to refer to alleged anti-Americanism in Canada. He said there was no such widespread sentiment but that it was perfectly true when Canada disagreed with the United States on policy it would not follow the United States’ lead. He cited the press handling of Canadian trade relations with Cuba as harmful to our relations, mentioning in this connection that Canada’s situation had been different in that, unlike the United States, it had its properties and investments seized. In continuing his discussion of Canadian policy on trade with Communist countries, the Prime Minister noted the recent sale of a substantial quantity of wheat to Communist China.

On this subject the Prime Minister said that a very serious difficulty had come to his attention three days ago. Imperial Oil had been asked to supply bunker oil for Canadian ships which will carry Canadian wheat to Communist China. The Prime Minister said that Imperial Oil’s parent company, Standard Oil of New Jersey, had gone to the Foreign Assets Control section of the United States Treasury Department in this connection and received a very cold reaction.

The President interrupted to say that he had had some talk about this case a day or so ago and that the initial decision had been to authorize Imperial Oil to sell the bunker oil only if the Canadian Government asked the United States Government to do this. The President added that he had told Secretary of the Treasury Dillon that we should do this only if the Canadian Government made the request and there was no other source of supply available to provide the oil.

The Prime Minister rejoined “this is politically an inflammatory issue.” It has not yet been in the press but if it does it will create great antagonism toward the United States. It will affect the position of and attitudes toward all the United States-owned subsidiaries in Canada. He greatly hoped that the President’s initial decision would be reconsidered.

The President said that this issue is sensitive also from our point of view. There is deep feeling in the United States about trading with or otherwise strengthening the Communist regime in China, particularly in light of their present truculence. He inquired if there were not other Canadian companies not United States-owned who could sell the oil.

The Prime Minister said that this problem ran deeper than this. Imperial Oil is a Canadian corporation incorporated in Canada and doing business in Canada. He recalled the unhappy incident three or four years ago when Ford of Canada was prohibited from supplying trucks to Communist China. This was finally worked out but it was important that this sort of issue not arise again. Canadians could not understand the United States Government dictating the actions of a Canadian corporation.

The President again reminded the Prime Minister of the sensitivity in the United States on Chinese Communist belligerence and threatening talk.

The Prime Minister asked how we would like it if Canada dictated the actions of an American corporation which happened to be owned by the Canadians. He went on to say that it would be impossible for him formally to ask the United States Government to allow Imperial Oil to supply the bunker oil.

Ambassador Heeney noted that the United States directors of Imperial Oil in the absence of action by the United States Government would be exposed to sanctions for selling the oil for this purpose.

The President said there was a need to take a hard look at the broad question of U.S. control of companies operating in Canada. He inquired again as to whether there was not some other company which could sell the oil. The Prime Minister said that it would be obtained elsewhere but that word inevitably would get out that Imperial Oil had been prevented from accepting a lucrative business contract by the exercise on the part of the United States Government of extra-territorial control. He said that Canada has welcomed the tremendous United States investments in Canada but this does create a source of great friction. He pointed out there is equity and not debt ownership; that the United States owns 75 per cent of Canadian oil; 56 per cent of Canadian manufacturing; and 50 per cent of Canada’s mineral resources. The case in point concerns Canadian oil and a Canadian company.

The President acknowledged that all of these elements had not been brought out when he had first considered the problem and that the matter should be re-examined.

The Prime Minister noted this discussion as a tribute to the informal and friendly character of relations between our two countries. We must live together in friendship and cooperation. Neither of us can survive without the other.

The President closed the discussion on this point by saying he would check on this matter of the bunker oil during lunchtime with a view to straightening it out before the Prime Minister’s departure. (Before leaving for lunch the President called in Mr. Dutton, explained the matter to him, and asked him to ascertain the position from the Treasury Department and others concerned immediately, reporting to him the result by the end of lunch.)

The Prime Minister then referred briefly to certain Canadian legislation which has its origin in Canada’s currently unfavorable balance of trade. He pointed out that Canada’s situation was greatly different from that of Germany, for example. He said that certain of these actions might be mistakenly construed as anti-American in that they are in a sense restrictive but that they had no such motivation. The Prime Minister went on to discuss at some length the character of Canadian trade and trade relations, mentioning the problem of its textile industry due to Japanese and Hong Kong competition. The President noted that we were similarly concerned with respect to textiles. The Prime Minister closed this aspect of the discussion by saying that within their GATT obligations Canada will be forced to take some restrictive actions in defense of its difficult economic position.

The Prime Minister then raised the question of joint defense of North America. He expressed himself as very pleased by the consideration now being given by the United States Defense Department to the sharing of production with Canada on F–104G’s. He was very appreciative of this. He pointed out the imbalance between Canadian defense purchases in the United States and United States purchases in Canada. He said that the Government of Canada desires to cooperate in every way in joint defense of this continent. They are under attack from the Liberals on this issue, and he added that, if we can strengthen Canada’s economy in the defense production field, it will uphold and support the Canadian Government in the pursuit of a forthright policy of joint defense. The Prime Minister referred to his speech at Port Arthur last night and his discarding of any notion that Canada should confine its contribution to joint defense merely to detecting and identifying enemy planes and operating the warning lines. This would put Canada in a subservient role and his government would not permit the acceptance of a policy of laying on the United States a task which should be done jointly.

The President expressed his appreciation for this attitude and then inquired whether Canada had recently been losing gold. There was a brief discussion of invisibles and the relative stability of Canada’s reserves.

The group then moved on to lunch.

At the luncheon table the Prime Minister raised the question of a visit by the President to Canada. He said it would give all Canadians great pleasure and that he hoped the President would find it possible to come to Canada some time in June. The Prime Minister was anxious to have him address a joint session of Parliament which would be in session presumably until the end of June. The President said that he was very anxious to visit Canada and that they could work out later a mutually acceptable date. The President then agreed to the Prime Minister’s query as to whether he could announce this fact to the House of Commons this evening when he makes his report on his visit to Washington. (Subsequently, it was agreed between the Prime Minister and the President, with Mr. Salinger present, that the Prime Minister would state in effect that he has issued an invitation to the President to speak before Parliament and that the President is anxious to visit Canada at a mutually convenient date to be fixed later. Mr. Salinger, if asked, would then confirm the Prime Minister’s statement.)

The Prime Minister then said that he wished to inform the President of the Canadian Government’s attitude with respect to nuclear weapons in Canada. The Canadian Government will not decide at the present time whether or not Canadian forces should be equipped with nuclear weapons. Efforts in the disarmament field are still in progress. If and when the Canadian Government reaches this decision, there must be provision for joint control and joint custody. The President inquired as to whether or not the arrangements we have in this regard with the British Government would satisfy the Prime Minister. The Prime Minister said that he thought something along these lines would do so. The Prime Minister indicated that the expenditure of atomic weapons in or from Canada must require a joint political decision.

The Prime Minister went on to say that with respect to the storage of nuclear weapons [less than 1 line of source text not declassified] as requested by the United States Government they must be subject to joint control. The Prime Minister then said that he was prepared to move ahead with negotiations to complete the text of the agreement or agreements which would cover all these arrangements but that these agreements would not be signed or go into effect until the Canadian Government had reached the decision to provide its own forces with a nuclear capability. The President expressed his pleasure at this willingness to move ahead in this field and inquired how the preliminary negotiations have been conducted. Ambassador Heeney pointed out that he had been negotiating on them with the United States Government and that the matter had also been substantively discussed at the Joint Cabinet Committee on Defense meeting at the Seigniory Club last summer.³

In concluding this discussion the Prime Minister expressed the view that all our defense arrangements, including both joint defense production sharing and nuclear storage problems, should be settled at the same time.

The Prime Minister then asked the President for his views on an early meeting of heads of government at NATO, indicating that certain major questions could only be settled at this level. The President noted that there had been some discussion of turning the spring Foreign Ministers’ meeting of NATO to be held at Oslo into a heads of government meeting but that Norway had indicated it lacked the necessary facilities. The President indicated some skepticism of holding a heads of government meeting unless important decisions had already been worked out by advance negotiation. The Prime Minister expressed general agreement on this point and commented disparagingly on the limited results obtained at the heads of government meeting in Paris in December, 1957.⁴ The matter was left with no specific understanding or agreement.

The President then asked Mr. Green his views with respect to disarmament noting that his interest and knowledge in this field were well known. Mr. Green recapitulated the history of disarmament negotiations in recent months and outlined Canadian views as they had been expressed from time to time. The President inquired as to what sectors of disarmament seemed to Mr. Green most promising for conclusion of an agreement. The Secretary of State for External Affairs indicated that he felt there were certain points such as limitation of conventional forces where the Russians and ourselves were quite close together. He was hopeful that a package of such nearly agreed points might be made up and negotiated, thereby providing a basis for further progress in future. There was some further general discussion of the subject with no conclusions reached. The Canadians, however, seemed to note with satisfaction the President’s deep interest in the subject and the description he gave of the steps he was taking to insure a more thorough and intensive examination of the problem and to obtain high caliber individuals to head the study and the negotiations. He said of necessity the first concentration in the past month had been on the nuclear test field and that he doubted we would have our general disarmament views correlated until some time in summer.

Mr. Rusk then inquired whether it might not be possible to make limited progress on regional arms limitation agreements. For example, he was considering the possibilities of seeking an agreement for all of Africa under which both potential suppliers of arms outside the continent and the African nations themselves would agree to strict limitations on armaments thereby insuring the devotion of their resources to economic development.

There was some general interest expressed in this.

The President then said that he was interested in the possibility of the future development in Africa of an association comparable to the OAS in Latin America. He noted the extent to which the United States had committed its prestige in the Congo by its support of the United Nations and said that the last thing he would like to see would be hatred of the United States becoming the unifying force for all of Africa. The Prime Minister remarked on the rivalries that exist between various African leaders, mentioning Nasser’s and Nkrumah’s personal ambitions as well as the competition for influence between Nigeria and Ghana.

The Prime Minister then noted that it had been agreed that the Joint United States-Canadian Committee on Trade and Economic Affairs would meet in Washington on March 13.⁵ He noted the value the Canadians attached to these meetings. He also raised the question of a food bank for NATO which he suggested several years ago and spoke of the recent United States initiative for a Food for Peace drive. He referred to Canada’s interest in the disposal of wheat abroad and expressed satisfaction with the consultation which goes on between our two governments and our attention to provision for normal commercial marketing.

The President then inquired of the Prime Minister as to his estimate of the prospects for an economic recovery in Canada. This launched a protracted discussion of the economic situation and measures for its improvement on both sides of the border. The Prime Minister referred ruefully to the divergent advice he receives from economists. He also mentioned that Canada had already placed in effect measures equivalent to six of the eight proposed by the President in his recent message on this subject to Congress.⁶ There was agreement between the President and the Prime Minister that high unemployment in a prosperous economy is probably the most baffling and difficult domestic problem faced by either country.

The President then inquired as to the outlook for general elections in Canada, and this led to a prolonged discussion between the President and the Prime Minister on politics in general, during the course of which the Prime Minister referred to the formation of a new party in Canada designed to combine the farmer, labor, and socialist intellectuals. He mentioned in this connection the problem created by Canadian labor unions which are controlled by headquarters in the United States and said that the pending requirement for disclosures by the Canadian unions might have a considerable political effect.

The lunch then broke up and there was a brief further discussion of the Imperial Oil problem based on a memorandum handed the President by Mr. Dutton (of which Secretary Rusk retained a copy).⁷ The President told the Prime Minister that, if the Canadian Government will ask Imperial Oil to supply the bunker oil, he, the President, will make sure that no action is taken by the United States to frustrate the transaction and that the American directors in the company will be protected against sanctions. The Prime Minister indicated some doubt as to the propriety of the Canadian Government making such a request of a Canadian corporation. He said that he would wish to think this over and that, having done so, he would telephone Ambassador Heeney.

(At the airport Ambassador Heeney told Mr. Merchant that he would follow up this matter with the United States Treasury Department.)

The President then accompanied the Prime Minister to the executive offices and they made their farewells.

0. Source: Kennedy Library, National Security Files, Canada. Secret. Drafted by Merchant. Approved in S on March 3. In the statement to the House of Commons on February 2 Diefenbaker expressed his hope of paying an unofficial visit to Washington before the Commonwealth Prime Ministers meeting in London in March. The idea was supported by the Department of State (Merchant memorandum to Rusk, February 3; Department of State, Central Files, 033.4211/2–361), and the meeting arranged for February 20. For another account of the conversation, see John G. Diefenbaker, One Canada, The Years of Achievement, 1957–1962, pp. 167–169 and 177–180. For text of the communiqué issued at the end of the meeting, see American Foreign Policy: Current Documents, 1961, pp. 442–443.
1. For a transcript of Snow’s interview with Chou En-lai, see Look magazine, January 31, 1961.
2. A copy of the address at the convocation of the University of New Brunswick on October 8, 1957, is in the Kennedy Library, Pre-Presidential Papers, Box 898.
3. Regarding the third meeting of the Joint Cabinet Committee on Defense, July 12–13, 1960, see Foreign Relations, 1958–1960, vol. VII, Part 1, pp. 807–808.
4. For documentation on the December 1957 Heads of Government meeting at Paris, see ibid., 1955–1957, vol. IV, pp. 218 ff.
5. Documentation on the sixth meeting of the Joint United States-Canadian Committee on Trade and Economic Affairs, March 13–14, is in Department of State, Conference Files: Lot 65 D 366, CF 1814. For text of the communiqué issued at the end of the meeting, see American Foreign Policy: Current Documents, 1961, pp. 443–446.
6. For text of the special message to Congress, “A Program for Economic Recovery and Growth,” February 2, 1961, see Public Papers of the Presidents of the United States: John F. Kennedy, 1961, pp. 41–53.
7. Not further identified.