611.4231/2047

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

No. 1662

Sir: I have the honor to inform the Department that the Prime Minister called at the office of the Legation this morning and informed [Page 165] me that he felt that their preliminary studies on trade agreement matters had now progressed to a point where they were in a position to send their representatives down to Washington to open informal conversations with our Government. Mr. King said that he expected that they would be prepared to leave by the end of the week, but that Mr. Robertson would discuss details with us.

Mr. King was in a more optimistic and talkative mood than I have seen him for some time. He remarked emphatically that it was his earnest desire to do everything in his Government’s power to facilitate an agreement between the United States and the United Kingdom. His Government had, of course, practical difficulties to consider but he knew that we appreciated this, and if it would be possible to extend our own trade agreement sufficiently to include certain commodities of substantial interest he felt sure that he would be able to meet any criticism that might be levelled at his Government by the Opposition on the ground of having given up privileges Canada now enjoyed in the United Kingdom market.

Mr. King stated that at the same time he thought he understood our position—namely, that we did not wish to be forced to pay twice for what we got from the British; to compensate the British for what they might give us and also to compensate Canada for what they might give up in the way of preferences in the United Kingdom market. For this reason he thought it important that the British should be made to agree to give up or revise certain of the margins of preference they now enjoyed in Canada, and should make their contribution to the common cause.

[The rest of the conversation with Mr. Mackenzie King concerned other matters.]

Mr. King’s visit was followed shortly after by one from Mr. Norman Robertson, of the Department of External Affairs, who told me that he, Mr. Dana Wilgress, Director of Commercial Intelligence Service, Department of Trade and Commerce, and Mr. Hector McKinnon, Commissioner of Tariff, were planning to leave Ottawa next Sunday, October 17th, by the “Washingtonian”, scheduled to arrive in Washington at 12:35 p.m. Monday, October 18th. Mr. Robertson confirmed what Mr. King had told me, namely, that their preliminary studies had progressed to a point which would enable them to open informal discussions with us.

On the subject of the margins of preference enjoyed by the British in Canada, Mr. Robertson said that from the Legation he was going over to discuss this question with the British High Commissioner. He indicated that while the British Government had informed them that they would be prepared to consider sympathetically any requests that Canada might make for revisions in these margins of preference [Page 166] until they had had an opportunity to discuss with us possible revisions in our own trade agreement and knew just what further concessions we would wish they would not know definitely what revisions in the British margin of preference would have to be made.

Mr. Robertson informed me later that he had been in communication with Mr. Merchant Mahoney of the Canadian Legation at Washington, and that while office space would be provided for him and his colleagues at the Legation they would actually reside at the Wardman Park Hotel. Mr. Robertson appeared to feel that a four or five day stay in Washington would be all that would be required.

Respectfully yours,

Norman Armour