_.Q_.

The opposition on this one is very tough, however. And in addition, the
Tennessee-Midwestern group which is importing Trans-Canada gas in the Upper Mid-
west, is not being very helpful to the Consumers Gas project just now. The
Tennessee-Midwestern people fear export of Canadian gas into New York State could
jeopardize the Upper Nfidwest deal. In addition, they'd like to distribute the
gas themselves, not the small St. Lawrence Gas Co. set up now to do the distribu-
tion.

The Tennessee-Midwest attitude is, let's settle the Upper Midwest deal
first, then talk about New York State. Thus, they are seeking to postpone any
serious action on the Consumers Gas project until the FPC has acted on the Trans-
Canada deal at Emerson, Manitoba.

W * * Canadian farmers are very much affected by a squabble between the Senate
and House over extension of Public Law 480, that U.S. surplus disposal law. The
House passed a law extending it for one year and authorizing spending of $1.5
billion for accepting foreign currencies instead of dollars. The Senate, however,
went for three years and $4.5 billion. So now a compromise must be worked out.
The Administration wants only a one year extension, and presumably Ottawa would
be far happier with this, too.

Under this law, while much humanitarian good has been done in distribut-
ing surpluses, Canadian farmers also have found some customers become former
customers. We‘ve lost out to the U.S. because of this cut-rate law in sales to
Europe, South America and Africa. The law will be around for a good many years
to come, but even so, it would be better for Canada to have the year-to-year
renewal. . .better, that is, at least until the Americans are willing to join in
a truly effective multilateral consultation on surplus disposals.

* * There are a lot of bills of importance to Canada now either being rushed
through the dying days of the Congress or being put on the shelf. We'll have a
full report on these in the next issue. There is such a rush around this town
when the Congress is winding up a Session that many bills slip through barely
noticed in all the hurly burly.

For instance, mandatory pilotage on the Great Lakes is one of these. ‘A
bill for this has been on the House calendar for several weeks. It's been passed
over twice, but may get approval before the Congressmen go home. The Boggs bill
providing tax deferrals for U.S. corporations making foreign investments, is an-
other one. This could, in effect, mean a kind of temporary subsidy for American
plants operating in Canada. The bill still is in the "iffy" stage in the House,
but will bear watching. Q

And it's important to remember that those bills of interest to you which
do not pass this year, still remain alive for 1960. A bill only dies when a

.Congress ends, and this 1959 Session is only the first half of the present Congress.

So, while we may have escaped many a headache during this year, it very likely
will come back to haunt us next year.

* * And one of these headaches certainly will be the "Chicago water steal."
The Senate action in referring this to the Senate Foreign Relations Committee is