Foreign Relations of the United States: Diplomatic Papers, 1945, General: Political and Economic Matters, Volume II

800.24/9–1145

The Canadian Embassy to the Department of State

Memorandum

Reference is made to the State Department Memorandum of August 10th⁸⁴ and the exchanges referred to in that memorandum, with particular reference to the State Department’s memorandum of May 26th,⁸⁵ taking note of the reservations of the Canadian authorities with respect to the original agreement.

It is the understanding of the Canadian authorities that their commitment for financing the provision of supplies and sharing in the ultimate cost incurred under these arrangements did not extend beyond completion of August loadings (and the corresponding date for completion of military distribution of petroleum products for civilian use).

It is understood that the Combined Military authorities have determined to terminate their responsibility for supplying the civilian populations of France, Belgium, Luxembourg, The Netherlands, Denmark, Norway, Greece, Yugoslavia, Albania and Italy on or before the completion of August loadings for all civilian supplies (except petroleum products which they will continue to distribute to Belgium, Luxembourg, The Netherlands, Denmark, Norway and Italy until October 1st). Accordingly, it is considered by the Canadian authorities that Canada’s commitment to finance the procurement of supplies or to share in the ultimate cost for any of these areas under the existing agreement did not extend beyond supplies loaded on or before August 31st (and the corresponding date for distribution of petroleum products) since any supplies required for loading after that date could not be regarded as “Military Relief”.

In respect of Germany and Austria it is considered by the Canadian authorities that upon completion of the division of these countries into the several zones, it was impracticable for the Canadian authorities to bear any direct responsibility for sharing in the financing of the provision of such supplies as might be required after completion of August loadings. In the event that any of the occupying powers require supplies available from Canada the Canadian authorities will be prepared to discuss with the occupying powers concerned, possible financial arrangements under which such supplies might be procured in Canada.

For the purpose of distributing the ultimate net cost of the Military Relief supplies which had been provided on a combined basis up to the completion of August loadings (and the corresponding date for distribution of petroleum products) the Canadian authorities have under consideration the proposal set forth in paragraph numbered three in the State Department’s Memorandum of August 10th for the distribution of such amounts as prove to be irrecoverable in excess of the total sum of $400,000,000 already covered in the original agreement.⁸⁶

Washington, September 11, 1945.

84. Reference is to the memorandum handed to the Canadian Embassy on the afternoon of August 9, quoted in telegram 6739, August 9, to London, supra.
85. See footnote 55, p. 1088.
86. In a memorandum of September 17, 1945, the Canadian Embassy informed the Department that the Canadian Government accepted the proposal that Canada’s share of such excess should be 5 percent (800.24/9–1745).