811.114 Canada/5074½

Memorandum by the Under Secretary of State (Phillips)

At seven o’clock this evening the Secretary of the Treasury called me on the telephone from the White House to say that he had just had a conference with the President with regard to our claims against the Canadian distillers. He said that the Treasury felt that they were entitled to the sum of $6,000,000 to justify them in discharging their claims against the distillers; the President, however, indicated that he would accept $3,000,000 and that he did this as an act of friendship and goodwill towards the Government and people of Canada.

Mr. Morgenthau went on to say that the President had asked him to communicate these facts to me immediately and to say that it was the President’s wish that I should immediately get in touch with the Canadian Legation and ascertain whether $3,000,000 would be acceptable from the point of view of the Canadians.

After communicating this information to Secretary Hull, I called up Mr. Hume Wrong, Canadian Chargé d’Affaires, and told him that, as an expression of friendship and goodwill towards his Government and the Canadian people, the President had decided to accept $3,000,000 as an offset to our claims against the distillers. I added that I should like to know before 12 o’clock tomorrow, if possible, whether the distillers agreed, in fact, to pay the sum mentioned by the President.

Mr. Wrong was delighted to have this information; he expressed the utmost confidence that $3,000,000 would be forthcoming from the companies and he said that he hoped he would be able to convey to me the views of the distillers before noon tomorrow.31a

William Phillips
  1. Subsequently, the representatives of certain Canadian distilling companies against which claims had been advanced by the American Government indicated a readiness to settle the claims for a total payment of $3,000,000.