2. During the war, for the first time, U.S. installations were constructed in Canada. Although the Government appears to have felt that it was undesirable to have U.S. installations in Canada, our construction industry was taxed to the limit and the United States were pressing for installations which were unnecessary for Canadian requirements. Thus we agreed to U.S. construction of the Crimson Route, the Canol pipeline system, and the Alaska Highway. My recollection is (although I have not checked the files) that the United States also did considerable construction in the way of improvements to existing airfields on the Northwest Route. We also permitted the United States to station forces in Canada for the protection of the Sault Ste. Marie locks. In no case, however, did we give the United States any long-term rights of occupation or use, all installations were for the emergency only.

3. Following the war we proceeded to liquidate all U.S. defence interests in Canada. We took over the Crimson Route, reimbursing the United States, partly on the basis of continuing value to Canada. We took over the maintenance of the Alaska Highway, agreeing, however, that U.S. forces might have the right of passage over the Highway. The United States withdrew its forces from the Canadian side of Sault Ste. Marie. The only "unliquidated" item that remained was Canol; the United States still has the ownership of the 4line from Skagway to the Highway and the 3inch line from Whitehorse to the Alaska boundary, but the remaining lines appear to have been abandoned. The principles of joint defence in the immediate postera were set forth in the thirty-third and thirty-sixth recommendations of the PJBD, copies of which are attached.^?

4. The incorporation of Newfoundland raised new problems. We accepted the three U.S. bases and assured the United States that we had no intention of questioning their continued occupation of the bases and continued possession of necessary military rights. We did, however, question certain rights which we regarded as unnecessary and subsequently secured a modification of the Bases Agreement in these respects. One condition of the bargain, not expressly stated but implied, was the granting of a twenty-year lease to an area or areas within the Goose Bay Air Base, subject to Canadian command and control of the Base, This lease has not yet been formally completed but we should be able to complete it shortly. The fact is, of course, that U.S. lines of air communication lie across Newfoundland and Northeastern Canada, and we could hardly have expected the United States to withdraw from this area even under conditions of a quiescent world.

5. There have, of course, been profound changes in our defence situation and policy during the past four years, because of the increasing tension in the international situation. On the whole, these changes indicate a growing maturity in foreign policy: we have come to accept a substantial measure of responsibility for the preservation of a world order which we feel is essential for the security of our way of life and the safety of Canada as a nation. Thus we are participating in resisting aggression in Korea and in countering threats to aggression in Europe. These new responsibilities are heavy and costly, and I am afraid the tendency is growing to carry them at some expense to the maintenance of effective autonomy at home. It is to this latter phase of our policy that the remainder of the paper is mainly directed.

6. During the last four years we have been under repeated requests from the United States for closer cooperation in joint defence of North America and for facilities to enable the United States to operate effectively abroad. Following is a summary of the more important requests dealt with or pending:²

1) Weather Stations. The original proposal was that the United States would establish weather stations in Canada. This proposal was eventually modified to provide for joint weather stations, to which Canada would have command. Only one exclusively U.S. weather station (Padloping Island), built in wartime, See Washington's comments in Letter 1848 Aug. 20,1952.^?
appears to remain. Although friction between Canadian and U.S. personnel has sometimes occurred, largely because of pay differentials and seniority of the U.S. Second-in-Command over Canadian officers in charge, on the whole, this scheme seems to be working satisfactorily.

2) Loran Stations. During the war certain Loran Stations were established by the United States in Nova Scotia and Newfoundland. After the war the Nova Scotia stations were taken over by Canada, but only recently have we been able to persuade Transport to agree in principle to taking over Newfoundland stations although the United States has long been willing. The United States has also requested and been granted permission to survey sites for new Loran stations in the Arctic archipelago. No request for establishing stations has yet come forward.

3) Radar. The original U.S. proposal was for the establishment of an extensive chain across Northern Canada. Over a two-year period this request was modified and an agreement was eventually reached for the establishment of thirty-one stations, most of them within reasonable access of settled areas along the following lines:

(a) Title to all sites to remain vested in Canada;

(b) The United States to pay for, roughly, twoof the construction and operating costs, and Canada one

(c) Canada to do the construction and Canadian materials to be used as far as practicable (all but eight stations in the Newfoundland-Labrador area are being constructed by Canada),

(d) Canada to man at the outset thirteen stations (later amended to fourteen), the United States the remainder, although Canada can take over the manning of any further stations at any time. No plans are being made by the RCAF to man additional stations.

The United States has subsequently requested permission to survey sites in the Arctic islands for two additional stations (presumably for the protection of Thule Base, Greenland). The request for surveys has been granted.

At the last meeting of the Permanent Joint Board on Defence the United States proposed the establishment of six additional stations in Ontario to protect the U.S. Great Lakes area against low-flying aircraft which might get through the radar net approved and under construction. Three at least of these sites would be in settled areas in Southern Ontario. The United States defence authorities have been put off with requests for further information, but we shall certainly be under pressure for the establishment of these sites. These sites would not be covered by the existing agreement.

4) Frobisher. The United States has requested and been granted the use of Frobisher as a staging and supporting field for Thule. Use is on a year-to-year basis, and if substantial improvements are made to the field, as is likely it may be hard to get the U.S. forces out. The principle of Canadian command and control has been maintained, the RCAF agreeing to a Canadian Commanding Officer, Canadian operation of the control tower, and a small detachment for maintenance purposes.

5) GLOBCOM Sites. About a year ago the United States requested small sites in Newfoundland adjacent to Harmon Field and to Pepperrell for the establishment of global communication facilities. The original proposal was that the same terms and conditions as applied to the leased bases - i.e., ninety-years, etc. - should apply, but they were subsequently induced to modify this. The United States has since dropped the proposed sites near Pepperrell, but has added sites in or near Goose Bay. The final proposal accepted by the Ministers concerned and the United States is that the Goose Bay sites should be brought under the terms of the Goose Bay lease and that the United States have occupation of the Harmon site without fixed tenure, either Government having the right to terminate the arrangement subject to consideration by the PJBD, but in such circumstances the PJBD should have regard to the relationship of these facilities to the Goose Bay facilities. In effect, the United States has secured twenty-year tenure for these sites as well as Goose Bay.

6) Torbay. As you know, the United States has informally proposed the development of Torbay as an airhead for supplying outlying stations of the Northeast Command and as a fighter base with accommodation for one squadron. The Canadian Section of the PJBD was able to postpone formal presentation of the request by asking the United States to examine whether their needs could not be met elsewhere (e.g., the Harmon or Argentia bases). It can hardly be said however that the issue is dead. If the United States is granted permission to develop Torbay it will certainly demand some assurance of tenure.

7) Northeast Command. Some time ago the Canadian Government, after prolonged consideration, agreed to the establishment of a U.S. Northeast Command for the Newfoundland-Northeast area of Canada. We were assured at the time that this was not an operational command but merely an administrative one. Indications are, however, that the command authorities assume (and perhaps rightly from their instructions) that it is an operational command. Certainly, under the U.S. Bases Agreement, the United States has the right to take measures to defend the bases. Nor is there any express limitation on the type of operations that may be mounted from the bases, even in peacetime.

The problem is how to reconcile the principle of Canadian command for the defence of Canadian territory (agreed to in Joint Defence plans), with the fact of U.S. rights to defend their own bases in Newfoundland. The problem. is most acute in air defence, since air defence of the bases cannot be localized in the base areas and since in fact the only important targets in the area (except St. John's) are the bases. The RCAF plans do not provide for the stationing of any air defence forces in Newfoundland, even in wartime. For some time this problem has been under discussion between the U.S. Northeast Command and the Canadian Atlantic Command (Halifax) and in the Chiefs of Staff. I understand the present tendency in the Chiefs of Staff is to propose that the U.S. Air Defence Forces in Newfoundland should be given responsibility for the defence of this area in Canadian territory by placing U.S. Air Defence Forces in the area for this purpose under the control of the Canadian Air Defence Command (Montreal). However, the U.S. Northeast Command comes directly under the Joint Chiefs of Staff and is responsible for protecting air transport and SAC operations through the area, responsibilities which complicate the problem.

8) SAC Operations over Canadian Territory or from Bases in Canadian Territory. As you know, there have been special discussions on this problem.

9) Reciprocal Reinforcements in Air Defence. At the request of the United States, arrangements have been made for reciprocal reinforcements on the initiative of Air Defence Commanders of Air Defence Forces of the two countries in the event of war - the United States has pressed for the use of the term "emergency", which however we have avoided.

10) Interceptor Flights. At the request of the United States, the PJBD recommended, and both Governments approved, that the Air Defence Forces of either country under certain conditions might intercept unidentified aircraft over the other, but might not fire thereon. The USAF are now pressing for an extension of this right to permit of opening fire (a) on a plane committing, or manifestly intending to commit, hostile acts; or (b) in the event that the Air Defence Commander responsible for defence of the area authorizes such firing.

11) Haines Pipeline. As you know, Cabinet has approved construction in principle, but apparently there was no support in Cabinet for Canadian participation. This may give the United States in effect a more or less permanent right-of-way across Canadian territory.

Some General Observations

7. It may be that we shall receive fewer demands for new facilities in Canada now that the U.S. Defence acceleration seems to be slackening down. On the other hand, we should not overlook the possible shift in U.S. policy towards greater defence at home and lesser defence abroad should there be a Republican victory next November, and especially if the new President were Mr. Taft or a compromise candidate. A shift in the emphasis of policy towards continental defence would almost certainly result in more pressure for facilities in Canada, pressure which might be very difficult to withstand.

8. Certain other difficulties may be noted: We have repeatedly asked the U.S. authorities for a full statement of their requirements in the Northeast region, but with little result. On different occasions we have been given to understand that nothing more is required, only to have new requests arise shortly thereafter. The fact is, of course, that the U.S. defence programme has been a developing one and that probably they have been unable to give us a final statement of requirements. We have also repeatedly asked to be informed well in advance of requests, but, again, with little result. The Haines pipeline is a specific example of how things are constantly done. We gave permission for the survey about two years ago, but we heard nothing more until the last meeting of the PJBD, when they came forward with a request for an answer in two weeks because of the alleged urgency of the requirement. I suppose the reason is that their requirements, like ours, are not governed only by military needs but by appropriations, and they cannot really say that any facility is a requirement until they have the appropriation. As soon as they get the appropriation for an item the military are often in a hurry to get it done. In part the reason is, no doubt, that the military authorities may have already waited a long time for approval by their own financial authorities, and are already impatient by the time the request is put forward to us. But in part the reason is the U.S. military authorities are very reluctant to take us - or the State Department for that matter - into their confidence at the planning stage. Again, the Haines pipeline is an example. This situation inevitably annoys Canadian officials and Ministers: the U.S. authorities in turn are liable to become impatient even by the necessary delay in "processing" a request. One further point is that the establishment of a U.S. facility in Canada inevitably leads to subsidiary requests and sometimes to attempts by U.S. Service personnel to exercise control over Canadians in other ways. For example, there has been more than one incident at Goose when they have attempted to control Canadian ships. The situation in the Arctic is also in point. U.S. activities there now far surpass those of Canada, and there have been numerous incidents of U.S. military personnel "throwing their weight about." For example, some months ago the USAF at Thule ordered an RCAF plane on aerial photography over Canadian territory to stop taking photographs and land at Thule. (We heard of the incident only inadvertently, so no action was taken in the Department.) We may anticipate further expansion of the activities of the United States in this area, as indicated above with regard to radar and Loran (see attached photostat chart).^?

9. On our part, I think we should recognize that certain other Departments, notably National Defence and Finance, are not very concerned with protecting Canadian sovereignty or autonomy. In fairness to National Defence, our new Defence policy has, of course, imposed on them very heavy responsibilities for operations abroad. In addition, the practice of the Cabinet is to impose an upper limit to defence expenditures, which is always substantially less than the programme which National Defence feels is essential to fulfil their responsibilities. National Defence has then to cut requirements. Naturally, they seek to avoid housekeeping or guard duties for the United States (e.g., radar stations), and tend to assume that their primary responsibilities are the definite commitments of participation abroad rather than protecting such intangibles as sovereignty or autonomy at home.

Conclusions

It is clear that we cannot avoid close cowith the United States in the territorial defence of the Continent, and in facilitating its operations abroad in collective defence enterprises in which we are partners. I feel strongly, however, that we should follow as closely as possible the line of policy which was worked out during and especially after the war, which may be briefly summarized as follows:

(a) The United States should be granted no long-term rights of occupation to defence sites in Canada;

(b) As far as possible, facilities should be joint enterprises, in which Canada should maintain command and control;

(c) Canadian command for the defence of Canadian territory (to make this effective we should be prepared to provide the major forces required for the defence of Canadian territory);

(d) We should avoid entering into arrangements which would permit the stationing of U.S. forces in Canada and seek to liquidate existing arrangements permitting this (e.g., the manning of radar stations by U.S. personnel), the Bases Agreement and Goose Bay Lease excepted.