On January 31st, I forwarded to you a memorandum† concerning the American proposal for a reference to the International Joint Commission, covering the waters of the Mid-western Watershed.

On February 22nd, the Secretary of the Cabinet Committee on Reconstruction, wrote to me advising me that the Committee had agreed that it would be unwise to make any decision at the present moment.

A domestic development of interest in relation to this whole matter is the creation of the Western Provinces Water Board in early February. This Board met in Regina in late February for the purpose of drafting recommendations to cover the organization and functions of the Dominion Provincial Water Board. Such a Board would be very vitally interested in the proposed United States reference.

Mr. Audette⁷¹ has just returned from the Semi-Annual Meeting of the International Joint Commission in Washington. At the adjournment of the Commission's Meetings, he and Mr. Meek were met by representatives of the Department of Slate and of the Bureau of Reclamation, whose object was to press for a decision by the Canadian Government on the United States proposals.

The United States representatives expressed considerable disappointment at the delay in this matter. They pointed out very clearly that unless some decision were forthcoming very shortly, the United States Government would either proceed to undertake works to divert water from the Belly River without our consent or, as an alternative, the United States Government might, under Article 1X of the Boundary Waters Treaty of 1909, refer the matter to the International Joint Commission for examination and report without the concurrence of the Government of Canada.

The United States officials indicated their willingness to guarantee in any reference to the International Joint Commission, the complete inviolability of the St. Mary and Milk Rivers Award. This represents a great step towards allaying Canadian opposition to their proposal.

The pressure being brought to bear by the United States authorities seems to be more than mere routine pressure. If the United States should adopt the first alternative and divert waters from the Belly River, our only recourse would he a reference to the International Joint Commission, and in view of our previous refusal, our position might be somewhat embarrassing. Should the United States Government adopt the second alternative and proceed with a reference of its own, this would create a new and not entirely happy precedent, as this has never been done since the creation of the International Joint Commission.

Even under normal conditions such a unilateral application would not be desirable. At the present moment it would he singularly inopportune. Although the Treaty calls for six Commissioners (three on the United States and three on the Canadian side), there are at present only two Commissioners on the United States side and only one on the Canadian side. The result of this is that a "majority of the Commission" cannot be found to conduct hearings or other proceedings, and the Commissioners take the view that this prevents the useful exercise of their jurisdiction in any matter. It is consequently apparent that even if the United States did refer the matter to the Commission, it probably would not act until the number of Commissioners was brought up to a minimum of four.

However, the Americans appear to view the lack of a quorum on the Commission with some concern and stay even view our reluctance to appoint at least one more Commissioner as a further evidence of dilatory tactics on our part. This point of view was not made clear in the course of conversations with-the United States authorities but could he read between the lines.

It is my view that the language of the reference proposed by the Americans is not acceptable, but it is also my opinion that we should not resist the reference in principle. This view is shared by Mr. Perrault,' and, I believe, by Mr. Meek. If it is the intention of the Government to adopt this view in the long run, I would suggest its early adoption in principle, in order to prevent the United States from either forcing our hand by a direct diversion of the Belly waters or from proceeding by a single reference to the International Joint Commission.

I would be grateful for your comments.

L.B. P[EARSON]

⁷¹L.C. Audeite, Direction juridique.
L.C. Audette, Legal Division.

⁷²J.C. Perrault, commissaire, Commission mixte internationale.
J.C. Perrault, Commissioner, International Joint Commission.