The U.S. Embassy has sent us a Note on this subject, No. 99, dated November 29, 1954, the text of which is as follows:

"The Ambassador of the United States of America presents his compliments to the Secretary of State for External Affairs and has the honour to refer to the agreement for the establishment and operation of a Joint Royal Canadian Navy-United States Navy Experimental Station at Government Point, Shelburne, Nova Scotia, effected by the Exchange of Notes of May 1 and May 10, 1954.

"The Ambassador recalls that paragraph 3(b) of the Annex to the first of these Notes provides that the permission to use United States Navy construction battalions is limited to the year 1954. He also recalls that, at the meeting of the Permanent Joint Board on Defence last October, it was noted that (because of unanticipated delays occasioned by severe weather conditions, difficult terrain, and certain design modifications requested by the Royal Canadian Navy) it had been found that the construction of the Experimental Station could not be completed until around April 1, 1955. Furthermore, in accordance with Canadian Navy recommendations, it was agreed that the paving of roads on the site should be postponed until the summer of 1955.

"As a result of the foregoing and because budgetary considerations preclude construction by other means, the services of a forty-man construction battalion detachment would be highly desirable both for completion of the Station's construction phase and for road surfacing from May 1 to September 15, 1955.

"The Ambassador hopes that, in view of the considerations outlined, the Canadian Government will find it possible to agree to permit the use of United States Naval Construction Battalions at Shelburne during the desired period in 1955."

Paragraph 2 of the Note refers to the discussion of the matter at the last meeting of the Permanent Joint Board on Defence, held on October 18-19, 1954. Enclosed is a copy of the record in the Journal of the discussion at the meeting.? The attitude adopted by General McNaughton at the meeting was that, under the circumstances as described by the U.S. Navy Member of the Board, the desire of the U.S. Navy to employ U.S. Naval Construction Battalions at Shelburne from May 1 to September 15, 1955, appeared to be reasonable.

While in principle I am not happy at the thought of extending the period during which USN Construction Battalions may be used when we were so definite in limiting their use to the year 1954, it seems to be that under the circumstances the request is a reasonable one. I have accordingly written to the Deputy Ministers of the interested departments, i.e. National Defence, Labour and Defence Production, to say that and to ask for the views of their departments on the Embassy's request, including the views of their Ministers if it is considered that they should be consulted.

I have also informed Mr. Winters who is interested as the Cabinet Minister from Nova Scotia. A copy of the letter which was sent to him on December 6 is attached for your information.?

I should be grateful to know if you agree that the Embassy's request is a reasonable one and that, assuming there is no objection from the interested departments, the request might be granted. ⁷⁰

Cabinet approved the original request for the establishment and operation of the Experimental Station at its meeting on April 22, 1954. As you were not present, the item was sponsored by Mr. Claxton, acting on your behalf. Do you agree that it will not be necessary to submit the present request to the Cabinet? ⁷¹ Do you wish to sign the Note to the U.S. Embassy in reply to their request? ⁷²

R.A. MACKAY
for Under-Secretary of State for External Affairs