This morning the U.S. Ambassador called, and in the course of his call gave me his own account of the conversations between Mr. Dulles and the Canadian Ministers. Mr. Merchant was present at all times when discussions took place.

2. Disarmament: According to Mr. Merchant's report, a good deal of the time between Mr. Diefenbaker and Mr. Dulles was spent on the subject of disarmament.

He said that Mr. Dulles had explained to Mr. Diefenbaker some of his worries about the disarmament discussions in London². He was concerned lest an agreement might be reached which would unwittingly give the Russians considerable advantage. He mentioned his fears of which we are already aware, particularly the fear that the result might be a neutralized Europe, and his concern over the status of East Germany in any inspection scheme. Mr. Diefenbaker raised with Mr. Dulles the question whether or not he should issue a statement of the Canadian position on zones of inspection in order to bring it publicly in line with what the U.S. already said. Mr. Diefenbaker indicated that if he did so, he would prefer to omit the first proposal which was the proposal to open all of Canada along with the U.S. in return for inspection throughout all of the Soviet Union. Before leaving Ottawa, Mr. Dulles, who in the meantime was somewhat concerned about a foreshortened Canadian announcement of this kind, suggested to Mr. Diefenbaker that he might put off issuing a statement until the situation in London had clarified a little.

Mr. Merchant was not quite certain, but he thought that Mr. Dulles had told Mr. Diefenbaker that he would send him a message from London giving him an impression of his discussions, and that on the basis of this report Mr. Diefenbaker would decide whether to make a statement. Mr. Merchant explained to me that a public statement of the kind Mr. Diefenbaker had suggested would make the Canadian position somewhat different from that of the U.S., but the U.S. could not abandon its proposal of inspection of all of the U.S. and all of the Soviet Union, as this was the original Eisenhower proposal.

3. Exchange of Visits: Mr. Dulles said that President Eisenhower would be very happy to have Mr. Diefenbaker pay a visit to him in Washington. He was not quite certain which dates would be convenient and would be glad to have Mr. Diefenbaker's suggestions. Mr. Diefenbaker said that he expected to be in Washington with the Queen for several days³. Mr. Dulles said that they would, of course, be happy to see Mr. Diefenbaker at that time, but what the President had in mind was a visit at which Mr. Diefenbaker would be the principal guest and there would be time for discussions. Mr.  Diefenbaker said that it probably would have to be early in October, but I gather there was nothing very definite considered. The question also arose of a meeting of the Joint Committee⁴, and my impression from Mr. Merchant was that there was some agreement in principle for the possibility of such a meeting, but nothing specific was arranged.

4. China: Mr. Dulles raised the question of China. He gave Mr. Diefenbaker a copy of his recent speech in San Francisco⁵ and hoped that Mr. Diefenbaker would be able to study it. He emphasized the strength of U.S. policy on this subject and the fact that they had no intention of changing it. Mr. Diefenbaker said that he had already read parts of this speech and he agreed with them. He said that his position had not changed since 1954 when he had said that he would oppose in the House a move for recognition of Peking. He did not necessarily rule out recognition permanently, but he thought it would be mistaken at this time because it would discourage anti-communist forces in Asia.

5. Exchange of Security Information:⁶ Mr. Diefenbaker referred to the Canadian note on the exchange of security information, and expressed the hope that there would be an American reply in the near future. Mr. Dulles said that this would be forthcoming, and Mr. Merchant indicated to me his expectation that this would be received in the next week or so.

6. Economic Matters: Mr. Merchant expressed strongly the view that the exchanges on economic questions had been very valuable because they had been quite frank on both sides. He thought it was a very good opportunity for those present to get the others' points of view on some of the problems involved. From his conversation I would gather that most of this discussion took place after dinner, and that the lead on the Canadian side was taken by Mr. Fleming and Mr. Fulton. Mr. Diefenbaker, however, did speak of the Canadian feelings on such subjects as surplus disposals⁷ during his talks alone with Mr. Dulles. Some of the points which Mr. Merchant noted in these discussions were as follows:

7. In reply to what he described as Mr. Fleming's very candid explanation of our attitude on disposal of surplus wheat, Mr. Dulles said that he thought the policy of liquidating surpluses under PL-480 would dwindle during the next year and probably by that time no longer be used. However, he wished Canadian Ministers to understand the purposes of this action. He said that they recognized the difficulties caused some of their friends. However, these policies had been pursued for general international purposes with which he was sure the Canadian Government would be in agreement. If, as he expected, the U.S. would cease disposing of agricultural goods in this way, Canada would find itself with still greater problems connected with such surpluses. The U.S. had been using this policy for the most part to help countries like India and Pakistan which were in desperate need and which would be in a very serious position if they did not receive such assistance. In a year's time, therefore, there might be a very serious situation in which Canada might be involved. Mr. Merchant said that he personally referred to the recent American suggestions that Canada might collaborate with the U.S. in a surplus disposal policy towards Poland. He hoped that the new government might have a look at this kind of possibility. In reply to Mr. Fleming's statement that Canadians particularly objected to the fact that these disposal agreements negotiated with the U.S. tied the market of the recipient countries to the American purchase in the future, Mr. Merchant said that he told Mr. Fleming that this was true in only a very few cases, that out of a hundred or more such agreements he knew of only about four in which there was such provision. Mr. Fleming said that he had not understood this to be the case.

8. On the subject of American investments in Canada, Mr. Merchant said that Mr. Dulles and he tried to explain that this was the result of the free enterprise system and not in any sense a result of deliberate official American policy to gain a slice of the Canadian economy. If Canada wished to get investments from other countries, it was, of course, entirely up to them to do so.

9. Mr. Fleming spoke strongly about the way in which the U.S. practised restrictive trade measures in response to pressure groups within the country. He referred particularly to the question of lead and zinc⁸ and also what he described as a recent arbitrary exclusion of hardboard. Mr. Merchant said that he stated quite frankly that this was a matter in which not only the U.S. was guilty. He said that one might get the impression from Canadian statements and newspaper editorials that Canada practised nothing but complete free trade and avoided protection of any kind. Since his arrival here, however, he had been involved in protesting a great many arbitrary measures by the Canadian government. He referred particularly to restrictions on Florida grapefruit about which the Floridians felt very bitter. He mentioned the regulations on turkeys as the latest of this kind.⁹ He said that he mentioned these cases simply in order to argue that these problems were mutual and that they could only be solved by both countries considering together the interests of each other.

J.W. H[OLMES]

¹Les fonctionnaires canadiens n'ont rédigé aucun compte rendu officiel de la visite de Dulles.
No official record of Dulles' visit was prepared by Canadian officials.

²Voir/See Volume 24, Document 117.

³Voir/See Document 2.

⁴Voir/See Document 138.

⁵Voir/See United States, Department of State, Bulletin, Volume XXXVII, No. 942, July 15, 1957, pp. 91-95.

⁶Voir 4^e partie, section B de ce chapitre./See Part 4, Section B of this chapter.

⁷Voir 5^e partie, section C de ce chapitre./See Part 5, Section C of this chapter.

⁸Voir 5^e partie, section B, subdivision II de ce chapitre./See Part 5,

⁹Voir 5^e partie, section E de ce chapitre./See Part 5, Section E of this chapter.