Memorandum of Conversation, by the Assistant Secretary of State (Berle)

The Canadian Minister came in to see me today at his request. He had previously indicated that he wished to discuss St. Lawrence water power.

It appeared that the Ontario Hydro needs additional water now; and has been interested in knowing whether it could not have additional diversion rights at Niagara. He wanted to know whether he could have any assurance on this score.

I then told him the substance of the proposal which Governor Lehman had made to President Roosevelt, and the substance of the suggested solution which the President had made (see memorandum of September 11, 1940, conversation between the President, Mr. Leland [Page 152]Olds, Chairman of the Federal Power Commission and myself). I said that the President had been opposed to piecemeal solution; but that I thought that it would be possible to consider a solution both at short and long range. Under this conception we ought to discuss together:

A temporary immediate diversion of Niagara power to take care of the Ontario Hydro;
The immediate initiation of the engineering work for development of power at the international rapids; and
As and when convenient, the signature of the St. Lawrence waterway treaty.

Following the President’s instruction I asked whether, were the engineering work on the international rapids commenced with American financing, this item would be considered as a part of the cost of the operation, and reimbursed in accordance with the agreed proportion by the Canadian Government as and when the power came to be used.

The Minister suggested that we put the suggestion in the form of a wholly informal memorandum for discussion, which he could report textually to Ottawa. I said that I would endeavor to get up such a memorandum and let him have it. I have accordingly requested Leland Olds to work out such a memorandum for discussion here.

A. A. Berle, Jr.