811.114 Canada/50614/6

Memorandum by the Under Secretary of State (Phillips)

I called up Assistant Secretary Wayne Taylor of the Treasury this morning and read him the President’s memorandum which I had just received. I re-read the President’s first point three times so that there might not be any misunderstanding in this regard. I told him that I proposed to send for the Canadian Chargé d’Affaires and put the question to him as to whether the companies would give some practical assurance that they will come into court and that any judgment which may be obtained against them will be paid.

Mr. Taylor made no unfavorable comment to this procedure and, accordingly, I received the Canadian Chargé d’Affaires and put the questions to him as indicated.

I also sent Mr. Taylor a copy of the President’s memorandum.

I told Mr. Hume Wrong that I had received a message from the President and I read to him the first point contained in the President’s memorandum; I added that the President felt that the Canadians against whom we obtained judgment ought to assure us that we can make collection; I reminded him that the matter was urgent, that action on the Treasury Bill, which was a very lengthy one, had been postponed four times and we could not ask them to postpone it much longer; I hoped, therefore, that we could get a very early reply. Mr. Wrong was not especially pleased with the proposal which I put up to him; it was in the form, he said, of compulsion in that legislation [Page 805] would be enacted in the event that the Canadian companies would not come forward as demanded. I replied to this that we were not discussing legislation at the moment, but were merely trying to find a way out of the impasse, that he must realize that the President was in an embarrassing position and would be severely criticized if these smugglers were allowed to get off scott free merely because they had no assets in this country which could be seized; that it was up to him and to me to try to find ways out of the present difficulties and that I was going to rely upon him for his help.

Mr. Wrong seemed to feel that it would be difficult to obtain the assent of all the companies, that some of them were small and had practically gone out of business and he felt sure, therefore, that nothing definite could be obtained from them. I replied that, for the moment at least, we should consider two or three of the large companies against whom we had the most important claims and that we could leave the question of the other companies in abeyance for the time being.

Mr. Wrong promised to do the best he could, but did not appear to be particularly optimistic that his efforts would meet with success.

William Phillips