I should like to discuss some points arising from your despatch. In the first place, I think it unlikely that the Poles would permit a Canadian Customs official to come here and examine the domestic sales records and cost records of one or more Polish manufacturers. They might give the authority if they are sufficiently short of dollars. They might even prepare a false set of books for our benefit. The Customs official would, in any case, have considerable difficulty in understanding the costing and pricing system of a Communist State, and the difference between the official and real value of the zloty. Our understanding that the information obtained would be "confidential" would be cold comfort to the Poles. I presume that you do not mean that it should be withheld from interested agencies of the Canadian Government, because this form of scruple in dealing with a Communist State would be somewhat out of place. For these reasons I suggest that the procedures set out in your despatch may not be suitable for Poland, however much they apply to other countries.

2. If we send a note along the lines of your despatch to the Poles I imagine that they would think it an opening move in a programme of restriction of Polish exports to Canada. They might think that this action is linked to other aspects of Canadian-Polish relations and perhaps may consider it a rebuttal to the recent renewal of the art treasures campaign. I doubt if they would regard our action as an administrative step by the Customs authorities.

3. It may be that the information required could be obtained from western countries which conduct considerable trade with Poland such as the United Kingdom and Sweden. The authorities of these countries might have better data than that which a Canadian Customs officer could obtain by investigation here.

4. I have considerable doubts, therefore, whether the presentation of a note to the Poles along the lines of your despatch would have the results you wish and I think that it might be misinterpreted. I am therefore taking no action until you have a chance to consider the points raised in this despatch.

T. LE M. CARTER