Introduction

This is the second of two volumes covering the period January 1, 1956 to June 10, 1957, when Prime Minister Louis St. Laurent's Liberal government was defeated in a general election by John G. Diefenbaker's Progressive Conservative Party. Although it is clearly impossible to divide the period into two completely self-contained volumes, the editor and general editor have tried to keep together as much associated material as possible without departing too much from the thematic organization that has characterized earlier volumes in this series. At the same time, practical and budgetary considerations dictated that the two volumes be roughly similar in size. The earlier volume, published in June 2001, focused on the Suez Crisis and contained material on the Middle East, the United Nations, NATO and the Commonwealth. This volume covers relations with the United States, the Soviet Union and Europe, the Far East, and Latin America. It includes additional chapters on North Africa, atomic energy, and international multilateral economic relations.

The shifting character of the Cold War confrontation with the Soviet Union continued to preoccupy Canadian policymakers for much of the period documented in this volume. Ottawa welcomed the easing of tensions that was signalled by Moscow's pursuit of "competitive co-existence" and was pleased when Soviet Premier Nikita Khrushchev denounced Stalin during the 20th Communist Party Congress in February 1956. "There can be little doubt that the myth of Stalin is being completely demolished," exulted Lester B. Pearson, the Secretary of State for External Affairs. "[N]ow the body of Stalin like that of Oliver Cromwell, is, post-mortem, likely to be hanged, drawn and quartered." [Document 537] Though intrigued by these developments within the Soviet Union, Ottawa remained wary of Moscow's intentions. In the Department of External Affairs, R.A.D. Ford, the head of the European Division and Canada's foremost Soviet expert, warned grimly that "as the basic Soviet aims remain the same, the challenge from the USSR, while changed in character, remains strong and in some respects more dangerous than the nakedly aggressive policy of Stalin." [Document 536]

Canadian officials were sometimes unsure how to respond to this altered threat. This was especially true of Moscow's growing presence in the developing world. Ford and A.E. Ritchie, the head of the Economic Division, disagreed strongly over Western and Canadian strategy for countering new Soviet initiatives in Africa and Asia. [Document 539] Canadian policymakers were united, however, when it came to dealing directly with the Soviet Union and its East European satellites. Everyone thought it sensible to conclude a trade agreement with Moscow and sell Canadian wheat to the USSR for cash. There was also broad agreement on the need to seize control of the bilateral agenda and prevent Moscow from defining the relationship. "It was not sufficient for us merely to reciprocate visits proposed by the Soviet Government," Pearson told his Cabinet colleagues. "We must take the initiative ourselves in fields of special interest to us, in order, among other things, to forestall undesirable initiatives from them." [Document 508]

More important, the relaxation of Soviet policy prompted the Department of External Affairs to conduct a comprehensive review of the government's attitude toward the satellite states of Eastern Europe. In Ford's view, Canada should no longer ostracize the satellites to keep the Soviet Union on the defensive, but engage them more actively in economic, cultural, and information exchanges. "The regimes are not going to be overthrown, so we had better concentrate our efforts on trying to make them more acceptable from our point of view," he observed in June 1956. "Our policy should be directed toward encouraging independence from Moscow while making it clear that we have no aggressive intentions and no intentions of radically altering their present social and political systems." [Document 522]

East Europe, nevertheless, wanted change. By the fall of 1956, popular unrest in the satellites had thrown up "nationalist" Communist governments in Poland and Hungary. In late October, as the world watched in amazement, Hungarian intellectuals and students forced Soviet troops to retreat from Budapest. Moscow's response was swift and brutal. Tanks and troops quickly crushed the poorly armed rebels and installed a puppet government. "The mistake of the rebels, and of [Premier Imre] Nagy for trying to keep pace with their demands," the Under-Secretary of State for External Affairs, Jules Léger, explained, "was in trying to go too far and too fast." [Document 463] With Pearson preoccupied with extracting Britain and France from their misadventures in the Middle East, Canada simply followed Washington's lead, condemning Moscow's behaviour by passing one futile United Nations resolution after another. These small gestures of support for the Hungarian people, which were won only after protracted struggles with the Afro-Asian delegations in New York, left many feeling bitter and betrayed. "I think we must agree," concluded Ford, "that the action of the UN on Hungary was largely a failure.... The one lesson that might profitably have been learned by the Arab-Asian group concerning the nature of the Soviet system has been obstinately refused." [Document 506]

Canada's response to the flood of Hungarian refugees that spilled across Europe in the wake of the crisis was equally uninspired. As the documents in chapter two make clear, Ottawa's reaction was slow and hesitant. Pearson insisted that the government match the outpouring of domestic and international support for the refugees but found the going tough. He urged J.W. Pickersgill, the Minister of Citizenship and Immigration, to accept more refugees and he pressed Cabinet for additional resources. But more often than not, he was rebuffed and defeated. Cabinet hesitated to test the country's capacity to absorb the refugees, and it proved sceptical and unsupportive of UN efforts in Europe.

In contrast, Canadian policy toward Poland was more engaged and dynamic. The fate of the moderately nationalist Communist government in Poland was all the more important in view of the Soviet Union's intervention in Hungary. "The success of the Poles in establishing and maintaining a measure of independence in their internal affairs," Léger observed in late November 1956, "will provide the key to Soviet policy in Eastern Europe." Pearson agreed, and Canada set out to "wean Poland gently away from its dependence on Moscow." [Document 569] Canadian diplomats tried to normalize relations with Poland, resolve the longstanding dispute over the Polish Art Treasures, and bolster the Polish economy with much-needed financial credits.

The persistence of the Cold War meant that defence and security questions continued to dominate Canada's relations with the United States. The tensions between national and continental approaches to North American air defence, already an important theme in Volume 21, intensified sharply in 1956-57. In January 1956, Ottawa learned that Washington wanted permission to deploy nuclear weapons over Canada. A month later, the U.S. Joint Chiefs of Staff asked Ottawa for its views on the feasibility of fully integrating the two countries' air defence systems. General Charles Foulkes, chairman of the Chiefs of Staff, was anxious to meet American demands but officials in the Department of External Affairs were more cautious. "If the United States and Canadian Chiefs of Staff should agree on an integrated operational control of our air defences and the deployment of U.S. atomic units in Canada," worried Arnold Heeney, Canada's ambassador to Washington, "I wonder whether the Government would be as free as it should be to take decisions on the merits?" [Document 22]

The debate between the diplomats and the military simmered during the summer and fall of 1956 before Cabinet reluctantly agreed in January 1957 to accept American nuclear weapons with appropriate safeguards. The Department of External Affairs also insisted on safeguarding Canada's position in any integrated continental defence system. "Geography and our willingness to cooperate effectively in joint continental defence efforts," Léger argued, "give us a special right to demand closer consultation." [Document 46] The Department wanted to use the American interest in continental defence to detail Washington's obligations to consult its smaller ally, a position it finally forced on the Department of National Defence in February 1957. [Document 47] The compromise held up through the spring, but when the government was defeated in the June election, Cabinet declined to act and left the matter for the new ministry. [Document 51]

Ministers were increasingly wary of the growing American military presence in Canada. "It was unfortunate," one pointed out in Cabinet "that more and more U.S. forces were being stationed at bases on Canadian soil." [Document 115] Canadians too wondered about the costs and benefits of the close postwar security arrangements with the United States. In the spring of 1957, a U.S. Senate subcommittee on internal security revived the unsubstantiated charges of Communist subversion against Herbert Norman, Canada's Ambassador to Egypt. Acutely distressed at these renewed allegations, Norman committed suicide on April 4, 1957, igniting a firestorm of anti-American protest in Canada. The pressure on Pearson, who told Heeney that he "had never experienced an atmosphere so critical of the United States on all sides of the House of Commons and throughout the country," was intense. [Document 63] Ottawa protested in the strongest terms and sought firm assurances that any confidential information about Canadian citizens supplied to the United States would remain secret. When none was forthcoming, Ottawa threatened to cancel existing arrangements for the bilateral exchange of security information.

A growing number of increasingly testy economic issues also crowded the bilateral agenda in 1956-57. Canadian ministers and their officials continued to worry about Washington's aggressive use of the ill-famed Public Law 480 to sell heavily subsidized American wheat into Canadian markets. They also fretted about unrelenting Congressional demands for import restrictions on groundfish, oil, and alsike clover. Ottawa reacted with exceptional vigour when the White House decided to increase the tariff on lead and zinc, "a most serious breech in the determination of the administration to resist pressures for protection on important items for international trade." [Document 235]

The St. Laurent government was not deaf to the pleas for help from its own domestic interests. The 1956 budget, for instance, introduced controversial measures designed to protect the small Canadian magazine industry from American competition, prompting a sharp exchange of views with Washington. Cabinet was quick to help Premium Iron Ores Limited deal with its American tax problems, anxious to counter "the rather widespread impression that the Canadian Government was not taking an interest in the treatment being given by the U.S. Government to a Canadian firm." [Document 199] As the June 1957 federal election approached, the demands on Ottawa grew louder, and the Liberal government responded with measures to protect Canadian turkeys, fruits and vegetables from southern competition.

As always, transboundary questions kept policy-makers busy on both sides of the border. Speedy progress on the St. Lawrence Seaway was jeopardized in early 1956 when fundamental differences arose over Ottawa's determination to retain its freedom to expand the Seaway in Canadian territory without American consent. Ottawa's willingness to delay the project to achieve its purpose eventually persuaded Washington to retreat albeit reluctantly and ungraciously. Equally difficult bilateral negotiations characterized discussions over the future of the Peace Bridge, which joined Fort Erie, Ontario, with Buffalo, New York. The documents reprinted here offer a rare illustration of the interaction between local Members of Parliament, Cabinet ministers, and federal bureaucrats in determining policy.

The most important continental resource issue covered in this volume is undoubtedly the government's new policy toward the development of rivers flowing across the Canada-U.S. border. In February 1956, after years of fruitless debate in the International Joint Commission on the future of the Columbia River system, the Minister of Northern Affairs and National Resources, Jean Lesage, proposed direct talks with Washington at the political and diplomatic levels. These, he hoped, would determine new principles for sharing the upstream and downstream benefits of all rivers crossing the international border. To Ottawa's evident delight, United States President Dwight Eisenhower accepted the proposal, which St. Laurent advanced during his visit to White Sulphur Springs in March 1956. The talks themselves started slowly, and much of the material reprinted here records the struggle to define the scope of the negotiations and reach an agreed position with British Columbia's argumentative premier, W.A.C. Bennett.

Economic questions also dominated Canada's relations with Western Europe, where the emergence of the Common Market and British proposals for a European Free Trade Area represented a formidable challenge. Pearson, deeply influenced by the views of Belgian Foreign Minister Paul-Henri Spaak, emphasized the political benefits for the Western alliance of closer integration in Europe and discounted the economic costs to Canada. The Minister of Finance, Walter Harris, and his ally, the Minister of Trade and Commerce, C.D. Howe, took a more hardheaded view, and were unprepared to welcome either the Common Market or the proposed European Free Trade Area. But Pearson carried the Prime Minister with him against these two formidable opponents, and in the end, Canada's attitude to developments in Europe was not unsympathetic.

A similar lack of enthusiasm characterized Canada's approach to other European institutions. In the Organization for European Economic Cooperation (OEEC), Canada remained an aloof and reluctant participant in the organization's program for trade liberalization. Louis Rasminsky, Deputy Governor of the Bank of Canada, explained that Canada preferred broadly based institutions like the World Bank or the GATT. Canadian policy in the OEEC, he quipped, might be summed up thus:

Thou shalt not kill, but needst not strive
Officiously to keep alive. [Document 406]

Canada's attitude to the Intergovernmental Conference on European Migration (ICEM), which helped organize the orderly flow of migrants from Western Europe to Canada, Australia and South America, was more malevolent. Despite the ICEM's strong support among Canada's allies in Western Europe, the Department of Citizenship and Immigration was anxious to destroy the organization, which some Immigration officials thought favoured Australia. External Affairs was hopeful that its European representatives could marshal enough evidence to change Canadian policy, provided they used their "ingenuity, circumspection and some finesse." [Document 406]

In the Far East, Canada remained deeply involved in overseeing the uncertain peace in Indochina. Despite their imperfections, and there were many, Pearson concluded in early 1956 that the three International Commissions for Supervision and Control (ICSC) in Vietnam, Laos and Cambodia remained the principal bulwarks "against a blowup in Indochina of the kind that could suddenly produce a major war." [Document 613] As France prepared to complete its withdrawal from Vietnam, Canada resolved to remain on the ICSC, convince Saigon to assume responsibility for the ceasefire arrangements, and reassure the sceptical Indians that the Commission would continue to function.

With Canadian support, the Commission weathered the succession crisis during the spring of 1956, before resuming its work investigating ceasefire violations by North and South Vietnam. Increasingly frustrated by Hanoi's ability to manipulate the ICSC, Canada sought more and more to restore a balance to the Commission's activities. It worked closely with South Vietnamese authorities to limit Saigon's exposure to Commission investigations into their infringement of "democratic freedoms." The Canadian Commissioner in Vietnam, Bruce Williams, eventually campaigned for the elimination of Commission outposts in North Vietnam in order to "dispel the illusion that arms control was effective." [Document 677]

Though the Commissions worked much better in Cambodia and Laos, Ottawa still found peacekeeping dangerous and burdensome. India vigorously opposed repeated Canadian efforts to wind up the Commission in Cambodia, where it had long since finished its work. As a result, relations with New Delhi and its mercurial diplomatic gadfly, Krishna Menon, suffered. In Laos, Ottawa welcomed efforts by Communist and non-Communist factions to resolve their differences through negotiations, but was disturbed to discover that Washington did not. "[B]y obstructing the desire for reunification of their country which we think is almost unanimously held by Laotians," Léger observed presciently, "we might eventually tend to drive them from the pro-Western into a strictly neutral or even anti-Western position." [Document 734]

Tired and easily irritated by the burdens of government, Prime Minister Louis St. Laurent played a diminished role in the elaboration of foreign policy during the period covered in this volume. Nevertheless, he was actively involved in several important economic questions. He used his warm relationship with Eisenhower on several occasions to seek White House support for Canadian industries harmed by American subsidies and trade restrictions. He also played an important role in defining Canada's attitude toward the European Common Market.

Pearson remained the most important member of the government's foreign policy team. In his absence, Paul Martin, the Minister of National Health and Welfare, continued to represent him in Cabinet and abroad. In the fall of 1956, Martin toured South Asia and Indochina, an experience that affected him deeply and long influenced his view of Asian Communism. [Document 673] Other ministers with notable foreign policy responsibilities included Ralph Campney, the Minister of National Defence, C.D. Howe, the powerful Minister of Trade and Commerce, and Walter Harris, the Minister of Finance, and a leading contender in the undeclared race to succeed St. Laurent.

During his final 18 months as Secretary of State for External Affairs, Pearson was able to draw on the advice of the experienced group of senior officials with whom he had worked closely for years. Jules Léger stayed on as Under-Secretary of State for External Affairs, assisted by his deputy, R.M. Macdonnell. There were, however, important changes at the assistant under-secretarial level. In late 1955, W.D. Matthews, the Minister to Sweden and Finland, was promoted to Assistant Under-Secretary. In June 1956, John Watkins returned from his post as Ambassador to the Soviet Union and was appointed Assistant Under-Secretary to replace Jean Chapdelaine, who took over from Matthews as Minister to Sweden and Finland. In December 1956, Marcel Cadieux became Assistant Under-Secretary and Legal Advisor in place of Max Wershof, who went to Geneva as Permanent Representative to the European Office of the United Nations. And finally, in April 1957, Douglas LePan, who had finished his work as Secretary to the Royal Commission on Canada's Economic Prospects, was promoted to Assistant Under-Secretary. John Holmes alone remained an Assistant Under-Secretary throughout the period covered in this volume.

There was no change in representation at Canada's major posts abroad until late in the spring of 1957. Dana Wilgress remained Permanent Representative to the North Atlantic Council and Representative to the Organization for European Economic Co-operation. Norman A. Robertson stayed in London as High Commissioner to the United Kingdom until May 1957, when he replaced Arnold Heeney in Washington as Ambassador to the United States. Heeney returned to Ottawa as Chairman of the Civil Service Commission. Georges Vanier continued as Ambassador to France.

Like other recent volumes in this series, Volume 23 is based primarily on the records of the Department of External Affairs and the Privy Council Office. These were supplemented where necessary by the private papers of Cabinet ministers and senior officials, and the files of the Departments of National Defence, Finance, Citizenship and Immigration, and Trade and Commerce. In preparing this volume, I was given complete access to the files of the Department of External Affairs and generous access to other collections. A complete list of the archival sources consulted in the preparation of this volume may be found on page xxvii.

The selection of documents is guided by the general principles outlined in the Introduction to Volume 7 (pp. ix-xi), as amended in the Introduction to Volume 20 (p. xxiii). In short, the series tries to provide a "self-contained record of the major foreign policy decisions taken by the Government of Canada," by concentrating on Canada's most important bilateral and multilateral relationships and on the major international issues that directly involved Cabinet members in substantive policy decisions.

The editorial devices used in this volume remain those described in the Introduction to Volume 9 (p. xix). A dagger (+) indicates a Canadian document that has not been printed. Editorial excisions are shown by an ellipse (...). The phrase "group corrupt" indicates decryption problems in the transmission of the original telegram. Words and passages that were struck out by the author, marginal notes and distribution lists are reproduced as footnotes only when important. Unless otherwise indicated, it is assumed that documents have been read by the addressee. Proper and place names are standardized. The editor has silently corrected spelling, punctuation and capitalization, as well as transcription errors whose meaning is clear from their context. All other editorial additions to the documents are indicated by the use of square brackets. Documents are reprinted in either English or French, depending on their language of origin.

The preparation of this volume was a collective effort. The Historical Section continues to depend on the expertise of the National Archives of Canada for help in locating relevant records. Paulette Dozois, David Smith and Robert McIntosh of the Government Archives Division responded quickly and cheerfully to requests for help. Maureen Hoogenraad of the Manuscript Division was equally helpful. Ciuineas Boyle, Access to Information Co-ordinator at the Privy Council Office, and her colleague, Herb Barrett, facilitated access to Cabinet records for the period. Corrinne Miller, archivist at the Bank of Canada, was indispensable in dealing with that collection.

Michael Rasminsky and Andrew Coyne kindly granted permission to reprint material from their fathers' collections. My overseas colleagues, Heather Yasamee and Keith Hamilton of the Records and Historical Services, Foreign and Commonwealth Office, helped arrange for the declassification of several important British documents. William Burr of the National Security Archive, Washington, D.C., was also helpful in this regard. Mark Hayes of the Naval Historical Center in Washington, Marijke van Faassen of the Institute of Netherlands History, David S. Patterson of the Office of the Historian, United States Department of State, and Kunihiro Haraguchi of the Diplomatic Record Office, Ministry of Foreign Affairs of Japan, identified some of the individuals in the List of Persons.

Ted Kelly helped research parts of this volume and guided it through production with diligence. Christopher Cook, whose knowledge of the archival collections reflected in this volume is unrivalled, remained my main research assistant. He was ably assisted at times by Joseph McHattie, Nelson Joannette, and Tina McLauchlan. Michael Stevenson also contributed research for several sections in this volume and compiled the index. As always, it was a pleasure to work with this team of fine historians.

Don Barry, Hector Mackenzie and Norman Hillmer, former editors of this series, offered advice and encouragement. My colleague, Mary Halloran, provided good-humoured support. The general editor of this series, John Hilliker, carefully reviewed the whole manuscript, and played a major role in helping to define the scope of this volume as well as its predecessor. The series would not be possible without the support of the director of the Outreach Programs and e-Communications Division, Roger Bélanger, and his predecessor, Gaston Barban. I remain solely responsible for the final selection of documents in this volume.

The Historical Section provided the supplementary text and coordinated the technical preparation of the volume. The manuscript was typed and formatted by Aline Gélineau. The Translation Bureau supplied the French for most of the footnotes, the captions and ancillary texts. My colleague in the Communications Services Division, Francine Fournier, generously shared her knowledge of the finer points of French grammar; Martha Bowers graciously helped with the English. Gail Kirkpatrick Devlin proofread the entire manuscript and helped compose the List of Persons.

My wife, Mary, and my children, Katherine, Michael and Stephen continued to support me through this project in countless and delightful ways. I thank them.

Greg Donaghy