611.42321 SL/6–1351

Memorandum by the Assistant Secretary of State for European Affairs (Perkins) to the Secretary of State

secret

Subject: An additional topic which Mr. Pearson may wish to discuss with you on June 13, 1951.

Discussion

Since the preparation of the briefing memorandum for you of June 12,1 it has been learned through the Canadian Embassy that Mr. Pearson may bring up the subject of the St. Lawrence Seaway and Power Project with you this evening.

From the Canadian point of view this is the year of decision as far as the St. Lawrence Seaway and Power Project is concerned. The domestic pressures, particularly in Ontario Province, for the project are so great that if the Congress fails to approve the legislation this year the Canadian Government feels that it must issue a statement at the highest level concerning alternative action by the Canadian Government.

When Mr. Saunders, Chairman of the Ontario Hydro-Electric Power Commission, called for such a statement from the Prime Minister, [Page 909]the White House heard about it and requested the Department2 to inform the Canadian Government that we thought the legislation still had a “fighting chance”, and that an official statement from the Prime Minister or other Cabinet officials would diminish this chance. The Canadian Embassy then informed the Department very informally3 that they believed there should be confidential conversations between the two Governments as to alternative procedures if the legislation should receive an adverse vote in the Congress and before any statement was made by the Prime Minister. The White House agreed that this was desirable and it was suggested that these consultations would be more fruitful if the ground work were laid in advance of Congressional action, thus avoiding the pressure and publicity of last minute talks. The Canadian Embassy has now agreed to ascertain from Ottawa what alternative the Cabinet has in mind and to inform the State Department so that discussions can be held with the White House.

It has been learned4 that the President might be willing to consider a bargain with the Canadians if the legislation for the joint project fails in Congress this session. There are indications that the President would consent to construction of the power aspect of the project by Ontario and New York State in return for a firm commitment that the Canadians would undertake to construct the Seaway by themselves. It is quite possible that the Canadians have a similar plan in mind.5

The House Public Works Committee has just returned from a trip to the Mesabi iron range and the St. Lawrence River, and the trip appears to have enhanced somewhat the chances for a favorable Committee vote on the St. Lawrence legislation. In view of the slightly improved outlook, the White House does not wish to press the Canadians for discussion of alternative proposals at this time.

Recommendation

If Mr. Pearson brings up the subject of the St. Lawrence Seaway and Power Project and the alternative means of securing it, it is suggested that you inform Mr. Pearson that you believe the legislation now before Congress still has a chance of approval. Since it cannot be denied, however, that the legislation may very possibly be defeated, it is recommended that you tell Mr. Pearson we believe there should be consultation prior to Congressional action in order to lay the ground work for an alternative course of action.

[Page 910]

In view of the White House attitude, it is not believed that Mr. Pearson should be pressed to initiate these conversations immediately unless his Government wishes to do so.6

  1. See p. 890.
  2. This request, made by David Bell of the White House staff in a telephone conversation on May 19 with William N. Dale, was reported by Dale in a memorandum of May 22 (611.42321 SL/5–2251).
  3. This telephone conversation on May 21 with Canadian Minister W. D. Matthews was reported by Dale in the memorandum cited in footnote 2 above.
  4. Bell gave Dale this information in a telephone conversation on May 21, reported in the memorandum cited in footnote 2 above.
  5. In the margin next to this paragraph was the handwritten notation “For your information only.”
  6. No record of any discussion of the Seaway question during Pearson’s visit has been found in the Department of State files.