711.419/17½
Memorandum by the Secretary of State of a Conversation with the British Chargé (Chilton), July 16, 1923
Mr. Chilton said that he had presented the inquiry of the American Government to the Canadian Government and he handed to the Secretary a note in reply.20 This note said that he had been advised by the Governor-General that the provisions of the Act in question conferred upon the Governor in Council power to prohibit [Page 497] the exportation of all or any class of pulpwood at any time. His Excellency added that a Royal Commission will shortly be appointed to inquire into the whole question and full opportunity will be given to all parties interested to appear and give evidence before the Commission. It was added there was no likelihood of any action being taken to give effect to the provisions of the law until this inquiry had been completed.
The Secretary said he was gratified at this because he was sure such a complete inquiry would bring out all the pertinent facts. Mr. Chilton said that hope had been expressed that the American Government would understand that this was a domestic question in Canada and would not raise any question of the right of the Canadian Government in the matter.
The Secretary said, of course, he recognized that it was a domestic question in the sense that it related to the power of the Canadian Government with respect to exports, but it was that sort of a domestic question which had the most direct relation to the interests of the people of the United States. The Secretary said that the American Government had domestic questions, but when the exercise of our authority in relation to them was deemed to affect the interests of Great Britain, the British Government never hesitated to bring the matter strongly to our attention; that delegations had come over here to present their views to Committees of Congress in order that our action in such matters could be taken with full understanding of the consequences.
The Secretary said that no [a more?] serious action could hardly be taken by Canada with respect to American interests. The Secretary pointed out that it was not simply a question of American manufacturers but it was a question of the paper supply of American publishers; that American publishers had contracts and that their supply of paper depended upon the carrying out of these contracts, and that these in turn depended upon the pulpwood supply. There was so much in this country; there was so much in Canada and it could easily be estimated as to just what was required from Canadian sources. The Secretary said that the Canadian Government must realize that in this matter if they proceeded along the lines suggested that they would be taking the American newspapers and our publishers by the throat, and that one could hardly imagine a case in which there would be a more serious and immediate reaction on the part of the American public. Mr. Chilton said that he supposed that the Secretary meant that this would lead to retaliation. The Secretary said he did not care to indulge in any threat of retaliation. He did not like to talk about retaliation; he wished the matter to be discussed in the most friendly way. It was perfectly [Page 498] apparent that if Canada started an economic war of this serious character, it would be continued and that the American Government would have abundant means of protecting itself against such injuries. The Secretary said he did not like to discuss the details of such matters, as he felt sure the Canadian Government, when it understood all the facts, would not authorize such a prohibition and he was gratified, as he had said, that full inquiry was to be made.