Dear Mr. Wrong,

I have been asked by the United Kingdom Government to take up with the Canadian authorities the question of the negotiation of an agreement with regard to the charter to the United Kingdom of vessels owned by Canada.

During the war, as you will be aware, the Ministry of War Transport had on bareboat charter a number of "Fort" ships. As a result of an agreement signed on the 17th August last' these ships were put at the disposal of the Ministry on Mutual Aid terms.

When Sir Cyril Hurcomb, Director General of the Ministry of War Trans-port, was in Canada last October he obtained Mr. Howe's agreement that the United Kingdom Government should retain these "Fort" ships on bareboat charter for a period of two or three years. It was agreed that the terms should be discussed and that a new agreement should be drawn up. It was also agreed that hire at a rate of 10% per annum on a valuation of 500,000 Canadian dollars per ship should be paid in respect of all the "Fort" ships other than sixteen of them which had been operating on Admiralty service. These latter ships would be free of hire for so long as they remained on naval service.

Negotiations took place earlier this year between the representatives in Montreal of the Ministry of War Transport and the Park Steamship Company acting on behalf of the Canadian Government and in March the Ministry were informed that the Canadian Government wished the new agreement to be signed in Ottawa on behalf of the two Governments in the same way as the agreement of the 17th August, 1945, had been signed.

When Mr. Hynard (the M.W.† . representative in Montreal) returned to the United Kingdom in April, he took with him a new draft of the agreement which had been prepared by the Canadian authorities. There are certain points in the new draft which the Ministry of Transport do not feel able to accept and they have now prepared for consideration a redraft of which I enclose a copy.† The nature of the suggested alterations, and the reasons for them, are set out in the memorandum and a copy of which I also enclosed.

As the memorandum points out, the Canadian authorities have asked that the United Kingdom authorities should redeliver the oil burning "Forts" which they have on charter and take in exchange coal burning ships. I under-stand that the Ministry of Transport have pointed out to the Canadian authorities the difficulties in which this would involve the United Kingdom authorities but, in accordance with the Canadian Government's wishes, the Ministry are proceeding with the exchanges as fast as they can and expect to be able to complete the change by the 1st October, 1946. But they trust that the Canadian authorities will understand that it would not be possible to redeliver the oil burners at sixty days' notice, since most of the ships are in a position or have commitments, which make this impracticable.

I have also been asked to mention that, in agreement with Mr. Howe, the Ministry of Transport have entered into contracts for the sub-charter of the "Forts" on bareboat terms for the period of the agreement. The United Kingdom authorities hope, therefore, that the agreement between the two Governments may be signed in the near future so that the contractual right of the United Kingdom authorities to the services of these ships is probably [sic] established.

I should be grateful if you could arrange for the enclosed memorandum and revised draft agreement to be considered by the appropriate Canadian authorities. If any elucidation of any particular points is required, I should be grateful if you would let me know as I am sure that the Ministry of Transport in London will be very glad to supply any further information desired. Alternatively if the Canadian authorities would prefer to have a discussion on the subject I should be very glad to assist in whatever way may be thought convenient.

Yours sincerely,
P. A. CLUTTERBUCK

¹Voir Canada, Recueil des traités, 1945,
¹See Canada, Treaty Series, 1945, No. 9. N' 9.