The Secretary of State to the Canadian Minister (Marler)

Sir: I have the honor to refer to my note of March 17, 1938, and to my memorandum of the same date17 in which I expressed the conviction of the United States Government that the mutual needs of Canada and the United States could be best provided for through a jointly planned development of their extraordinary natural resources in the Great Lakes–St. Lawrence River basin. I stated that this Government is ready and eager to enter into and push to a speedy conclusion negotiations for a mutually satisfactory agreement directed to this objective.

I now desire to lay before you certain additional proposals which, in the opinion of the United States Government, should make it possible to reach an immediate agreement providing for the early initiation of the undertaking in accordance with a program designed to give full recognition to a possible divergence of interest between the two countries with reference to the timing of specific works.

As a basis for discussion, I am transmitting to you herewith an informal and tentative draft of a proposed general treaty18 establishing [Page 181]what is, in effect, a broad plan covering the future utilization of the Great Lakes–St. Lawrence Basin to assure the maximum advantages to both peoples. In this draft it has been our purpose to embody terms assuring recognition of the special needs and problems of the areas intimately concerned on both sides of the boundary.

The United States Government believes that the best interests of both peoples would be served by the immediate consummation of an agreement along the general lines of this treaty draft. I may add that in its preparation special consideration was given to the views of the Government of the Province of Ontario, as expressed in official communications recently made public in Canada, to the effect that it is not ready to assume any responsibility in connection with the project until its market requires the power.

In brief, the proposed treaty would (a) enable the United States to go forward immediately with the International Rapids Section link in the proposed St. Lawrence deep waterway and the incidental power development; (b) defer Canada’s responsibility for completing its share of the waterway for a sufficient time to assure the readiness of the Ontario power market to absorb its share of the power; (c) provide for an international commission to develop plans and advise the two Governments in a program to promote the most advantageous use of the entire Great Lakes–St. Lawrence resource; (d) assure the immediate undertaking under the supervision of this commission of the proposed remedial works to preserve the scenic beauty of Niagara Falls; (e) permit the Province of Ontario to go forward with its plans for diversion from the Albany River basin into the Great Lakes and utilize such additional water for power at Niagara; (f) make available considerable additional Niagara power to each country for development at will; and (g) enable the proposed commission to proceed immediately with the preparation of comprehensive plans for more efficient use of the resources of the Niagara River.

In my memorandum of March 17, 1938, reasons were given why the Government of the United States could not consent to additional importations of hydroelectric power on a withdrawable basis unless provision were simultaneously made for the development of an alternative and equally economical domestic supply to be available when the imported power was withdrawn. Under the proposed treaty such a domestic supply would be made available through the development of the American share of the International Rapids Section and the Government of the United States would therefore be prepared to approve such additional imports of power from Canada, on a temporary basis and without obligation on the part of either party to continue, as Canada might see fit to permit to be exported.

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Certain observations on the proposals which have been incorporated in the tentative treaty draft will serve to clarify the extent to which they are designed to meet the needs of both countries.

The United States would immediately undertake the development of the International Rapids Section of the St. Lawrence River, in accordance with the provisions of the treaty, and would complete all proposed works except the Canadian power house superstructures and their equipment. Thus, the next important step in the deep waterway project would be assured without requiring the Government of Canada to undertake the immediate completion of its share of the project or the additional expenditure associated therewith.
The State of New York would be able to proceed immediately with the development of the 1,100,000 horsepower of cheap hydroelectric power which constitute the American share of the power available in the International Rapids Section of the St. Lawrence River. This additional power supply at a cost of less than $8.00 per horsepower year would thus be assured to meet its future market requirements.
The Province of Ontario would be assured an equivalent reserve of cheap St. Lawrence power, available to meet its requirements whenever the supplies provided in the present contracts with Quebec companies shall have been absorbed, without the assumption of any financial obligation until it needs the power. This would guarantee the Province of Ontario an economical power supply for many years to come. Furthermore, the Province would be relieved of the necessity of anticipating future market requirements by more than two years because, after completion by the United States of other works in the International Rapids Section, such a period would be ample for the construction of the required power house facilities.
The civic interests in both countries concerned with the preservation of the scenic beauty of the Niagara Falls and Rapids would be assured the immediate undertaking of the remedial works to distribute the waters of the Niagara River in such a way as to ensure unbroken crestlines on both the American and Canadian Falls, as recommended in the 1928 report of the Special International Niagara Board and embodied in the unratified 1929 Convention and Protocol between the two countries.
The Province of Ontario would be assured the opportunity of proceeding with its projects designed to divert the waters of certain tributaries of the Albany River into the Great Lakes–St. Lawrence basin and would acquire the right to use such waters for additional power development at Niagara and eventually in the International Rapids Section of the St. Lawrence River. Under present plans this would make an additional 100,000 to 150,000 horsepower at Niagara as soon as the diversion projects shall have been completed.
Both countries would be assured not only the immediate possibility of developing considerable additional supplies of very cheap hydroelectric power at Niagara but also the initiation of the first scientific approach to the development of a comprehensive plan for the utilization of the Niagara River. Such a plan would provide both for enhancement of scenic spectacle and for future power development, [Page 183]which would prove an important contribution to economic expansion on both sides of the boundary.
The important economic areas tributary to the Great Lakes–St. Lawrence basin on both sides of the border would be assured of the realization of their desire that ocean navigation be brought to the heart of the continent while, at the same time, the period within which completion of the deep waterway would be contemplated would be sufficient to provide a natural growth of traffic assuring the railroads the ability to adjust themselves to the new transportation agency without financial hardship.
Both countries would be assured a continuing basis of cooperation in the planned utilization of one of the world’s greatest natural resources. Provision would be made for the prompt solution on a sound technical basis of all problems, including those of navigation, power, lake levels, diversions from and into the basin, et cetera, in terms of the mutual interests of the two peoples.

May I express the hope that the Government of Canda will find in the proposals herein outlined a satisfactory basis for the undertaking at an early date of negotiations for a treaty and the expediting of such negotiations to the end that the interests of both peoples in the Great Lakes–St. Lawrence resource may be most effectively served?

I shall appreciate being informed of the views of your Government as soon as may be conveniently possible.

Accept [etc.]

Cordell Hull
  1. For text of memorandum, see Department of State, Press Releases, March 26, 1938, p. 403.
  2. Ibid., June 4, 1938, p. 626.