The attached letter from Mr. Hull deals
entirely with the proposed United States base in
Newfoundland.    It raises three points
(a) The procedure for expropriation and compensation.
I think Mr. Hull's recommendations on this point fit in
all right with the Government of Newfoundland's own
proposals which we recently communicated to the State
Department - see papers 2391/U2 and 2391A6.   We must
however refer the matter to London and Newfoundland
before we can return any definite answer to the State
Department.    I attach the necessary draf#.
(b) The actual definition of the United States base.
It will be remembered that after agreeing upon a
definition which was set out in our letter (the
"preliminary lease'1) of November 11th to Colonel Knox,
the Navy Department discovered that they wanted
something more and asKed for "a staging point for
landing aircraft* in the immediate vicinity of St.
George's".   This addition was duly agreed upon by
H.Jf.G. and the Newfoundland authorities, but now
for the reasons explained in fcr. Hull's letter, the
American authorities have decided that instead of
putting their landing ground close to St. George's
they want it several miles away and therefore propose
that the wording be altered to run "a staging point for
land aircraft in the general vicinity of St. George's".
I do not imagine that there is lively to be
any difficulty about this but here again we shall have
to refer to London and Newfoundland.    I attach the
necessary draft.
(c)   The lease.   Hp. Hull's letter reminds us that a
draft lease was communicated some time ago to Lord
Lothian and asks for our observations on this lease.
This of course refers to the document communicated -by
Colonel Knox (not Mr. Welles) to Lord Lothian on
October ICth and which we were under the impression
had as a result of the conversation between the
Ambassador, the Fresident and Colonel Knox on October
lUth, been withdrawn by the latter (see paper 2 5^1/17).
Even though the lease was,we thought,withdrawn,a copy
was sent to London and Newfoundland at the time so
that they are both already in possession of it. This
question of the leaj/e had however better be considered
along with all the other letters about which Mr. Butler
is speaking to Mr. Dunn today.
FRHM:DH
(HZ) S787/250
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