811.114 Canada/50671/7

Memorandum by the Under Secretary of State (Phillips)

I called up Mr. Norman Armour this morning to put him in a position to follow up, if he had an opportunity, the representations which we made to Mr. Hume Wrong yesterday afternoon with respect to the Canadian disturbance.

I said I appreciated the probability that the Canadian Government would not particularly welcome the inquiries which we put to them yesterday afternoon, but, nevertheless, Mr. King and Dr. Skelton should appreciate that the legislation which Canada so strongly objected to had passed the House and also the sub-committee of the Finance Committee of the Senate and was on the point of being reported out and passed in the Senate and that only with great difficulty had we been able to persuade the full Committee to postpone any such action; we, therefore, were doing the best we could to find a remedy to the situation and we earnestly hoped that the Canadian Government, appreciating our difficulties, would do the best it could to give help in the circumstances; I reminded Mr. Armour that the Canadian Government had itself suggested negotiations as the proper course and the step which we were now taking, if it could receive the [Page 806] support of the Canadian Government, might well lead towards satisfactory negotiations.

I also reminded Mr. Armour that there were presumably seven companies against whom the Treasury desired to proceed, that while there were two companies, the Hiram Walker and Seagram Companies, which probably would be willing to agree to come into our courts and to follow the procedure requested, we hoped very much that the other companies could also be persuaded to act likewise; it would be highly desirable to include all the companies in the picture.

Mr. Armour said that he would at once seek an interview with Dr. Skelton and might even be able to see Mr. King and he would telephone me as soon as he had anything further to say on the subject.

William Phillips