611.4231/932
Memorandum by the Under Secretary of State (Phillips)
I sent for the Canadian Minister this morning and explained to him the problem which had arisen as a result of his note to us of November [Page 871] 14th. I told him of the procedure which had been followed in initiating trade conversations with other countries; that there had been at the beginning no formal exchange of notes because of the importance for both sides to study in detail conditions surrounding their respective imports and exports; it was, therefore, something new for us to be presented with a note in which the request was made for a 50% reduction on certain articles which were in direct competition with our own agricultural industry; the note, I said, was a splendid presentation of the need of economic rapprochement between Canada and the United States and we were all delighted to receive it; the question which I sought to explain was the difficulties involved in replying to the note in the cordial terms in which we desired to reply and at the same time not to become involved in seeming to acquiesce at the outset in the 50% reduction on the tariffs on the specified items; if the paragraphs specifying these articles could be omitted from the note, then I felt that the Secretary would be in a position to reply without reservations that we were ready to go forward with the necessary studies preliminary to negotiations; if, however, we had to answer the note as it stood, there would probably have to be some reservations in our reply which would, when made public, seem far less cooperative and responsive from the Canadian point of view; we wondered, therefore, whether the Prime Minister would be willing to alter his note in this sense and thus conform to our adopted procedure.
Mr. Herridge replied at length; he described the Canadian note as a highly courageous move on the part of the Prime Minister, who had always stood for high tariffs; he emphasized that there was no desire on the Prime Minister’s part to make public now the exchange of notes, but he admitted that Mr. Bennett might request their release after the meeting of Parliament; if there was to be no publicity at the present moment, he could not see why the note should not stand as it is, inasmuch as the preliminary discussions would presumably have been completed by the time the publication was requested, and he set this date as probably not later than February 15th.
He thought it would be difficult to omit the specified paragraphs because, in so doing, “the heart” would be taken out of the note.
I said that I could understand the importance he attached to naming the articles, since his Government in due course, by the publication of the notes, could announce to the Canadian public that their efforts to stimulate the export trade in these articles had been checked by the United States Government. I assumed that would be useful politically, but, in our opinion, more rapid progress could be arrived at by the course I had suggested. It was of the highest importance not to upset our agricultural interests at the outset of the conversations.
[Page 872]Mr. Herridge admitted that the Prime Minister would want to show the Canadian public what he had attempted to do for the benefit of Canadian export trade, but he insisted that in doing so, he would be taking a very bold and courageous step which was bound to alienate Conservative interests, whose representative he was.
Mr. Herridge said he would leave for Ottawa in a day or two and would consult with the Prime Minister—returning to Washington before the end of the week. The points raised were so important that he did not wish to give any definite reply today.