The Minister in Canada (Armour) to the Secretary of State
[Received January 25.]
Sir: I have the honor to acknowledge the receipt of the Department’s instruction No. 641 of January 19, 1937, enclosing a copy of a memorandum of a conversation you had with the British Ambassador on January 17, 1937, together with a copy of a memorandum handed to the Ambassador, on which occasion the commercial policies of the United States and the British Empire were discussed.
I particularly appreciate having these memoranda for background purposes in any future talks I may have here, either with the Prime Minister8 or with the Under-Secretary of State for External Affairs, Dr. Skelton.
Yesterday afternoon I had occasion to see Sir Francis Floud, the British High Commissioner, when the latter informed me that he had received from the British Ambassador at Washington a copy of a memorandum of his conversation with you, apparently that which took place on the evening of January 17th last. Sir Francis Floud added that he was sorry to see that the negotiation of the British Trade Agreement with Canada had caused you such concern and that he [Page 5] hoped that when its terms were published we would see that there was no reason for such alarm: that no tariff rates had been raised. On the contrary, their whole objective had been to lower the rates.
I took the occasion to emphasize to Sir Francis the points you had stressed to me in conversations by telephone, and which I had already presented both to the Prime Minister and to Dr. Skelton. I said that I felt sure he would agree with me that any individual trade agreement, such as that for example between Great Britain and Canada, could not for a moment compare in importance with the big objective we had in view, namely, the broad program for economic rehabilitation in the world and, through it, the restoration of conditions of permanent peace. I went on to say that I felt it would be most unfortunate if, at this critical juncture, any action should be taken by the British and Canadian Governments which might give the impression that instead of cooperating with us in endeavoring to bring about the elimination of those restrictions which are today stifling legitimate international trade they were obstructing and impeding the broad program for economic disarmament.
Sir Francis again insisted that he felt sure the agreement they had reached with the Canadian Government could not be interpreted as a step backwards. On the contrary, he felt that when the agreement was published it would be found to be a step in the right direction. He admitted that he had as yet received no instructions from London and that his only word thus far had been, as already stated, in the form of a communication from Sir Ronald Lindsay.
I have had no further word either from Mr. King or from Dr. Skelton since my talks with them on January 16th and 17th last. In my letter to the Chief of the Western European Division, dated January 18, 1937,9 I transmitted informally copies of memoranda of all conversations, and on the morning of January 19th I telephoned the text of an important statement made by the Prime Minister of Canada in Parliament, issued in response to your desire, which I conveyed to him, that he might see his way clear to stating the Canadian Government’s position on this question officially and unequivocally.
The text of the Prime Minister’s statement, together with certain comment regarding the circumstances under which it was issued, was transmitted to the Department with my confidential despatch No. 1117, dated January 19th last.10
I shall not fail to keep you fully informed regarding any further developments that may take place.
I should mention that just before I left him Sir Francis stated that he had heard that Mr. Walter Runciman, now in New York and who [Page 6] is, I believe, expected to spend the coming weekend in Washington as a guest of the President at the White House, is not planning to come to Ottawa.