The Canadian Embassy to the Department of State


In its memorandum of June 2nd, 194423 the Canadian Embassy informed the Department of State of the willingness of the Government of Canada to participate with the Government of the United States and the Government of the United Kingdom in the provision of military relief supplies to Europe by temporarily financing orders placed in Canada and by sharing the ultimate net cost in proportion to Canada’s military participation in the liberation of Western Europe. This proportion was estimated at approximately 8%.
In its reply of Sept. 12th23 the Department of State informed the Canadian Embassy that the Government of the United States accepted the suggestion of an 8% participation by Canada in the ultimate cost of military relief in Europe.
On the basis of this exchange the Government of Canada proceeded with the measures necessary to enable the fullest use to be made [Page 1070] of Canada as a source of supply in the confident expectation that arrangements would be made to ensure that Canada’s contribution to the ultimate cost would not exceed the agreed percentage.
Discussions among representatives of the three participating Governments have continued throughout the intervening period with a view to reaching formal agreement on the terms of the arrangement for providing military relief supplies on a combined basis. In these discussions it has now been made known that the Executive Branch of the Government of the United States is not in a position to undertake at this time to make such payments to Canada ultimately as may prove necessary to ensure that Canada’s contribution to the final net cost shall be limited to the accepted share.
During this period responsibility for financing procurement has been conditionally accepted by Canada in excess of the $45,000,000 (Canadian) made available by the Canadian Treasury Board for the purpose, and supplies have already been shipped or ordered for shipment to a value in excess of the agreed share of the anticipated maximum ultimate cost.
In the continued absence of the firm assurances to which it regards itself as reasonably entitled the Government of Canada is now compelled to reconsider its position. Accordingly, the Canadian Embassy has been instructed to inform the Department of State that, pending the outcome of this reconsideration, the Government of Canada is reluctantly taking the steps necessary to limit its commitments under the arrangement:
The Canadian authorities will endeavour to finance the procurement of those military relief supplies which have already been ordered.
The Canadian authorities are reserving the right to reconsider items on which responsibility for financing procurement has already been conditionally accepted, but which have not yet been ordered.
The Canadian authorities are ceasing, at least temporarily, to accept any further responsibility for financing the procurement of military relief supplies.
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