My dear Mr. Ambassador:

I refer to discussions during recent months between officers of the Department and the Embassy concerning the developments in connection with the St. Lawrence Seaway and Power Project. As you know, the joint resolution approving the project is likely to be brought up on the floor of the Senate at the end of January, having been favorably reported by the Senate Committee on Foreign Relations. Proponents of the project feel that the chances for favorable action by the Senate at this session are better than they have ever been. Meanwhile, Chairman Dondero of the House Public Works Committee plans to resume late in January the hearings on the joint resolution which were adjourned last July. There is some uncertainty about the prospects for the resolution in the House, but it is likely that it will be brought up in the House also during this session.

There are several aspects of the project which I know you agree should be the subject of exchange of information and discussion between the two Governments at this stage. It is not suggested that there should be formal negotiations or anything of the sort. That would come, as I see it, when the resolution is considerably further along. Meanwhile, however, the proponents of the project feel that they should be better informed concerning the Canadian point of view about various phases of the project and Canadian facts and figures relating to costs, traffic, tolls, et cetera. There is no doubt that questions will be asked on the floor of the Senate and also in the House Public Works Committee concerning the Canadian point of view and the Canadian facts and figures.

In the above connection I believe you may have transmitted to Ottawa copies of the study by the Department of Commerce entitled "An Economic Appraisal of the St. Lawrence Seaway Project" in the series headed "Industry Report: Domestic Transportation" for AuguSt.November 1947. As you know, this study examines the potential traffic of the seaway, particularly in terms of iron ore, grain, bituminous coal, and petroleum, and touches briefly upon the capacity of the seaway and the possible revenues to be obtained from tolls. The comments of your people on this study would be of particular value to us, and we feel that the study should offer your people a useful basis of approach to the traffic, capacity, and revenue aspects of the problem. I think the same thing might be said of the report of the Subcommittee of the Senate Committee on Foreign Relations on Senate Joint Resolution ill, which followed the Subcommittee hearings of last May and June. This report, as you recall, contains a good deal of detailed information concerning costs and traffic and tolls. I should mention particularly in connection with the Senate report that our people brought the Canadian cost figures up to date on a somewhat rule-of thumb basis in order that they should compare realistically with the up-to-date U.S. figures. I believe your people may wish to review this aspect and send us any corrections which ought to be made.

The following general questions are intended as of possible assistance to your people in Ottawa in developing the sort of information which would be useful to us here. The questions are not all-inclusive and I realize that it would be impossible to give an exact answer to everyone of them:

(1) What are the present Canadian estimates for the Canadian share of construction costs and on what date are these estimates based?

(2) What are the Canadian estimates for the traffic capacity of the waterway, especially, of course, from Lake Erie to Montreal?

(3) What is the Canadian estimate of the traffic capacity of the Welland Canal for toll-paying traffic, bearing in mind the continued utilization of the Welland Canal by smaller toll-free vessels?

(4) What are the present Canadian estimates concerning the nature and volume of the traffic utilizing the projected seaway?

(5) Do the Canadian officials concerned with this problem have any comments or suggestions concerning the traffic estimates made in the above-mentioned study by the Department of Commerce and in the above-mentioned report of the Subcommittee of the Senate Foreign Relations Committee?

(6) Do the Canadian officials in question have any comments or suggestions concerning the U.S. estimates relating to the potential Labrador iron ore deposits?

(7) Are there any Canadian comments concerning the conclusion in the above-mentioned Department of Commerce report to the effect that wheat would be brought eastward over the waterway in lake vessels and transshipped at Montreal into ocean-going vessels for export?

(8) Have the Canadian officials any comments or suggestions in connection with the tolls aspects of the project as outlined in the Senate report and the Department of Commerce study?

(9) Do the U.S. toll estimates appear realistic? Are the rates for individual commodities fair? Does it appear to the Canadian officials that the rates suggested and the revenues anticipated therefrom would make the project self-liquidating? (We fully appreciate at this end that while your Government has agreed in principle to the imposition of tolls, providing arrangements can be made satisfactory to both Governments, it would be premature to expect any formal and definitive statements in answer to this question. Nevertheless we are hopeful that your people may find it possible to give an indication whether we are proceeding in the right direction and whether our estimates are generally well founded.)

In view of the imminence of the consideration of the project on the Senate floor and by the House Public Works Committee, we should be very grateful if you could get word from Ottawa for us at the earliest possible moments.⁵⁷

Sincerely yours,
JOHN D. HICKERSON

⁵⁷La réunion non officielle rapportée dans le document suivant immédiatement a été substituée à une réponse détaillée écrite, parce que les etudes canadiennes requises n'étaient pas encore terminées.
The informal meeting recorded in the immediately following documeni was substituted for a detailed written reply, as ihe appropriate Canadian studies were not yet complete.