On Tuesday, May 31st, 1949, a meeting was held in the office of Mr. Plumptre to discuss the general problem of settlement of our accounts with those European countries to which we supplied goods for the succour of the civilian population in the latter part of the war and in the early post-war period.

2. The following were present:
Department of External Affairs Mr. [A.F.W.] Plumptre
Mr. [L.] Mayrand
Mr. [A.C.] Anderson
Mr. [P.] Tremblay
Mr. [K.C.] Brown
Mr. [W.P.] McLeod
Mr. [A.J.] Matheson
Mr. [J.B.] Seaborn
Department of Finance
Mr. [R.B.] Bryce
Mr. C.L. Read

3. The amounts of the debts due to us by the various countries concerned are as follows:

Belgium - $7,822,462.00 U.S.
Denmark - 565,200.00 "
France - 12,389,021.00 "
Greece - 612,352.00 "
Italy - 28,400,000.00 "
Norway - 1,703,098.00 "
Yugoslavia - 226,242.00 "

In some of these countries, it may be necessary to take at least partial settlement in local currencies. The question then arises: what is the best way of using the money- Three major uses to which it can be put are the purchase of premises, the financing of regular expenditures by our own and other government departments, and the support of a cultural and educational program. The projects are to be in that order of priority. It is emphasized that any cultural and educational program would have to have the approval of Parliament.

4. The situation with respect to the settlement of military relief credits is briefly as follows:

          a) Greece Greece will not be able to make more than nominal settlement and we are prepared to accept premises in full payment. Before his departure, we should brief the new Ambassador, whoever he may be, to find suitable premises.

          b) Yugoslavia We have agreed to accept dinars in full settlement of the account. They will be used for the operations of the Mission which, within about two years, will use the total amount available. Our Minister is attempting to negotiate an agreement.

          c) Albania External Affairs is to find out where we stand re Albania. Is a bill to be presented to that country for military relief- Will we get any share of it?

          d) Italy Italy will only be able to make a nominal settlement, considering the magnitude of the account. Nominal settlement should include both premises and some money for an educational and cultural program. We should start to negotiate when we have the Desy-Monette report on premises, which will probably be in the summer.

          e) Netherlands A residence has been bought but suitable premises for the Chancery have not yet been found. We have approximately 6.2 million guilders for local use by the Canadian Government and by Canadians for cultural and educational purposes. There should be a substantial amount for culture and education.

          f) Belgium We are getting 300,000 francs per month from the Belgians which is being used for the expenses of the Mission. As Belgium's exchange position is relatively good, we should, at least at the beginning of negotiations, try to accept a minimum in local currency (for government expenses only) and ask for the rest in dollars. We should agree to the British reductions. We should move forward soon with the Belgian negotiations, attempting to present the bill though diplomatic channels, i.e., via Brussels in the first instance.

          g) France The French financial position is such that we cannot expect to get a large portion of our $13,000,000 account paid in dollars. We will have to accept a larger amount in local currency and should, therefore, be able to allot between 1 and 2 million dollars for culture and education as soon as we know the cultural and educational program.

          h) Luxembourg We should tell the Belgians that we are about to present a bill to Luxembourg as well. We should be able to get most of the Luxembourg settlement in dollars.

          i) Denmark The Danes have offered to pay us a further 1,000,000 kroner for the settlement of their account. We should delay acceptance until we have agreed upon the total amount of our claim and until we have a clearer picture of the amount to be spent on premises and on expenditures by other government departments. The premises question should be taken up again soon.

          j) Norway We will probably have to accept a substantial amount of the Norwegian settlement in local currency. We should, therefore, explore the possibilities of the purchase of premises and of a cultural and education program.

5. Premises. It was agreed that the acquisition of premises should have high priority in ways of using currencies. Our representatives abroad should make new efforts to find suitable premises. Consideration should be given to finding an assistant for Mr.Monette, the departmental architect.

6. A statement of the estimated annual expenditures by government departments is attached.? The Administrative Division will check to see if there are any additional expenditures for, for example, the Department of Labour and the Secretary of State's Department, and if so, will submit a new estimate.

7. The discussion on a memorandum prepared by the Information Division of External Affairs on "The Use of Funds Blocked in Western European Countries for Cultural and Educational Purposes" emphasized the following points:

          a) Insofar as the settlement of military relief accounts is concerned, it is our obligation to Parliament (i) to obtain dollar settlements if we possibly can, and (ii) to give the purchase of premises and expenditures by other government departments priority over cultural and educational programs. Therefore, we can only hope definitely for a cultural and educational program in France, Italy and the Netherlands, and possibly in Denmark and Norway. b) Consideration should be given to giving assistance to (i) musicians, for study and performances; (ii) sports and physical culture.

c) Mr. Bryce doubted that it would be possible to capitalize that portion of the local currency which we intend to allot to cultural and educational purposes and use the interest from it for annual expenses on this program. Hence, it seems that we will have to use up the amount allocated to culture and education over a period yet to be decided, possibly 10 to 20 years. This might serve as the nucleus for a continuing program.

d) Any program which we are able to evolve for the use of funds in this way should be brought to the attention of the Royal Commission headed by Mr. [Vincent] Massey.⁷

⁷Commission royale d'enquête sur l'avancement des arts, lettres et sciences au Canada. Royal Commission on National Development in the Arts, Letters and Sciences.