Border Argument

Hard words wash across the Canadian border into the U. S. in the wake of hard liquor. Last week there was a recrudescence of the argument about the two countries' Prohibition responsibilities. At Ottawa William D. Euler, Canada's Minister of National Revenue whose blunt speaking on the same subject has riled U. S. officials before (TIME, June 3), lectured the Washington government on ways and means of checking rum-smuggling. Treasury officials in Washington snorted indignantly. Two facts are basic in this international dispute: 1) Canada grants clearance of liquor cargoes for the U. S. on excise payments; 2) the U. S. requires, under its navigation laws, no clearance for pleasure craft under five tons--the category into which most rum runners fall--bound for a foreign port. For months U. S. officials have been trying to persuade Canada to deny liquor clearance papers, to make it illegal in Canada to export liquor to the U. S. Last week Minister Euler met this U. S. request with a counter-proposition: "If the U. S. will insist upon clearance for their own boats to enable them to check and control their own people, the Canadian Government is quite ready to consider any further reasonable measure of co-operation with them." Minister Euler said two other things that tended to increase the heat in already superheated Washington: 1) "Practically 100% of the rum runners are American citizens who ply their trade in U. S. boats": 2) "Only 2% to 5% of the liquor in the U. S. comes from Canada." Commissioner of Prohibition James M. Doran answered statement No.1: "No one is in a position to know whether the boats . . . are Canadian-owned or American-owned because nearly all vessels which Canada has reported as clearing for the U. S. with liquor cargoes are not recorded in the U. S." Statement No. 2 was particularly offensive to Assistant Secretary of the Treasury Lowman in charge of Prohibition who has repeatedly asserted that 85% of U. S. liquor comes in via Canada. Minister Euler definitely rejected the U. S. proposal that Canada, by act of Parliament, prohibit clearance papers for U. S. liquor cargoes, explaining that such a prohibition would "drive the traffic underground, saddle us with heavy expenses and do our neighbors no good." Continued the Dominion official: "Liquor in Canada, whether we may like it or not. is legal merchandise. Once liquor has paid the excise, it is as free as other legal commodities ... for exportation." "...Our citizens would be corrupted [if export liquor were outlawed] the traffic would be diffused. . . . The Canadian law would be violated and the duty would be laid on the Government of Canada to maintain a greatly augmented preventive force and punish the violation of ... a law which, after all, would only be enacted to assist in the enforcement of the law of a foreign country. . . .

"The U. S. has no effective check on their own boats and their own people engaged in the violation of their own law. If they would follow the Canadian practice [of clearances] they would have a means of control which would in a large measure provide the remedy for the conditions of which they complain." Assistant Secretary Lowman in Washington failed to see it that way. Said he: "It makes no difference what [clearance] regulations you have, because bootleggers will not register their vessels in any event. They are just as willing to ignore the navigation laws as they are the prohibition and customs laws. For the Canadian Government to refuse clearance papers to liquor laden vessels is the only restrictive measure that would have any real effect." There the international argument rested, temporarily.