811.114 Canada/50554/7

Memorandum by Mr. James C. H. Bonbright of the Division of Western European Affairs

Mr. Armour telephoned this afternoon to say that he had had a conversation with Dr. Skelton22 before lunch with regard to our proposed liquor tax bill. In emphasizing the sacrifice made by the Canadian Government in 1930 in prohibiting the granting of clearances [Page 801] to vessels carrying liquor destined for the United States, Dr. Skelton wanted Mr. Armour to know that this legislation cost the Canadian Government the estimated sum of $17,000,000 a year. He added that so important was this question considered and so strong was the general opposition to it that both Mr. Mackenzie King and Mr. Bennett23 had to take the question up in party caucus and both threatened to resign their positions if their respective parties did not support the legislation.

Mr. Armour thought that this information, particularly the part about Mr. Bennett and Mr. King, was so important that it should be known to our authorities before a decision was reached on the Treasury’s impending bill.

  1. Oscar D. Skelton, Canadian Under Secretary of State for External Affairs.
  2. Richard B. Bennett, Conservative Prime Minister of Canada, 1930–35.