842.801/129

The Secretary of State to the Minister in Canada ( Armour )

No. 36

Sir: With reference to the Legation’s confidential despatch No. 1304 of June 14, 1935, relative to the question of coastwise shipping and related subjects, I am enclosing for your information and comment copy of a letter dated August 8, 1935, from the Secretary of Commerce, together with copy of a memorandum prepared by Mr. H. R. Amory, Acting Director of the United States Shipping Board Bureau.54

Two points brought out in Mr. Amory’s memorandum will be of particular interest. First, it will be observed that the Shipping Board Bureau continues to oppose the conclusion of an agreement with the Canadian Government, if that agreement involves a relaxation of American coastwise laws to the extent that Canadian vessels might, on the Great Lakes and St. Lawrence River, transport goods for export between ports in the United States in return for the continuance of the same privilege to American vessels in Canadian ports. This opposition is no doubt fortified by the fact that, as stated in the memorandum, in 1934 only one percent of the Canadian grain shipped to Buffalo was reshipped to Montreal. The second point is that the Shipping Board Bureau favors retaliatory action, by penalizing imports into the United States via Canadian ports, as a means of compelling the Canadian Government to refrain from putting the coastwise provisions of the Canada Shipping Act into force.

As far as the second point is concerned, I wish to say that this Department’s views regarding retaliatory action of the kind suggested have not changed since they were outlined to you in the Department’s instruction No. 313 of April 23, 1934. The reasons set forth in that instruction, based broadly on the belief that this country would in the long run suffer from the widespread adoption of such restrictive measures, [Page 53] are still considered sound and there is no disposition on our part to alter the present policy in this respect.

With regard to the first point, it would be manifestly inadvisable for this Government to proceed at present with the negotiation of a treaty with the Canadians covering coastwise shipping in the face of opposition on the part of other interested departments. I fully realize that this decision may place you in an embarrassing position with the Canadian Government, having in mind the fact that this Government was the first to suggest the conclusion of a treaty and that this suggestion has been concurred in by the Canadians. In spite of this, however, the Department feels that it would be unwise for you now to discuss the question in any way with the Prime Minister. Should he approach you on the subject, further consideration will be given to the reply which should be made to his inquiry.

Very truly yours,

For the Secretary of State:
R. Walton Moore
  1. Neither printed.