366. Telegram From the Embassy in Canada to the Department of State 1

521. For State and Agriculture. Associate Deputy Minister Trade and Commerce Mitchell Sharp today warned Embassy in strongest terms of Canadian Government’s concern over Canadian Embassy Washington report that State Department considering favorably Polish proposal for 500,000 tons wheat for stockpiling.2

Sharp stated Canadian Government sympathizes with US political objectives in Poland but if Polish wheat proposal accepted it will “blow lid off” US-Canadian economic relations; mean end friendly discussion on wheat problems and result in “open warfare” with respect wheat sales.

Sharp pointed out Canadian Ministers up to now had used considerable restraint in commenting on US wheat disposal policies but announcement this deal would create such uproar Ministers would have no alternative but to “lambaste” US in coming election campaign.

Sharp described Canadian wheat position as “desperate” and said Minister Trade and Commerce, C.D. Howe, “furious” over latest proposed US action.

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Embassy comment:

Canadian position, as reported Embtel 5003 is that having lost all peripheral markets, Canadian wheat is now being forced out of traditional markets by subsidized US wheat sales and US now contemplating step which would upset Canadian position in Iron Curtain markets which were developed by Canadians.

Acceptance Polish proposal would seem contrary US officials’ statement at April 1 Canadian-US wheat meeting. According Department’s memorandum of conversation of April 14 covering meeting, official “suggested US might make clear US was not going sell wheat to Poland”.

If Polish proposal accepted strong reaction by Canadians certain as far as wheat concerned and resentment might adversely affect Canadian-US economic relations.

  1. Source: Department of State, Central Files, 442.4841/4–1257. Official Use Only; Priority.
  2. The U.S. Government was considering the sale of wheat to Poland under Public Law 480 as part of economic aid to Poland. For documentation, see vol. XXV, pp. 582 ff.
  3. In telegram 500 from Ottawa, April 3, Merchant reported the Canadian position as summarized in this telegram. In addition, he reported that he reassured the Canadians that the United States did not intend to “‘barge in unduly’ on Iron Curtain wheat markets.” (Department of State, Central Files, 442.0041/4–357)
  4. Not found in Department of State files.