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DEPARTMENT OF STATE
WASHINGTON
December 13. 1940
I.:y deer Mr. Charge d1 Affaires:
I refer to your letter of November 11, 1940 addressed
to the Secretary of the Navy, to Lord Lothian's letter
of November 28, 1940, and to an Informal memorandum
dated December 2, 1940 which Mr. Hoyer Millar handed
to Mr. Hlckerson of this Department, all In regard to
the orooosed United States bases In Newfoundland.
It Is my understanding that the British and Newfound-
land authorities are in agreement that the United States
authorities may commence any works on the proposed
bases in Newfoundland at once; that the Newfoundland
authorities are orepared to institute immediately such
condemnation proceedings as may be necessary to acauire
title to privately owned property and subsequently to lease
such properties to the United States Government in
accordance with the provisions of the basic exchange of
notes of September 2, 1940.   Officers of the United
States
Mr. N. M. Butler, C.V.O.,
Charge d'Affaires ad interim of
Great Britain.
it
States forces in Nevtfoundland are being instructed to
communicate with the authorities in Newfoundland respect-
ing the relative priorities in which they desire condemnation
proceedings to be instituted in these areas in order that
construction may be commenced at once and prosecuted with-
out delay.    In the informal memorandum dated December 2
it is stated that the Newfoundland authorities suggest
that a special board of three should be constituted to
be presided over by a Judge of the Newfoundland Supreme
Court; one of the other members to be a businessman and
the third to be a person having experience in regard to
land values.   It was stated that this board would take
evidence and would advise the Government of Newfoundland
which, if satisfied, would make recommendations to the
United States authorities regarding the payments to be
made to the British Government for the dispossessed
private owners.
This proposed procedure is agreeable to the American
Government subject to the following understandings:
1.   That any compensation for privately owned prop-
erty acquired by the Newfoundland authorities and leased
to the United States would, in accordance with the basic
exchange of notes of September 2, 1940, be subject to the
agreement of the United States Government.
2.
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2.    That the United States authorities mould freely
be afforded facilities by the British and Newfoundland
authorities to make such investigations as may be deemed
advisable by the United States authorities of any recom-
mended payments which might appear to the United States
authorities to be excessive.
It is assumed that the special board contemplated in
Newfoundland would have authority to take and actually
vxmld take evidence under oath.    It would be my hope that
in the ordinary course of the board's proceedings evidence
would be taken to show:
(1) The price which each owner actually paid
for his property;
(2) The date on which he acquired the property;
(3) The actual cost of any improvements erected
upon the property subsequent to its purchase;
(4) The assessed value of the property for pur-
poses of taxation during the current year
with an indication of any changes in the
assessed value in the last three years;
(0) The amount of taxes paid on the property
with certified copies of tax receipts;
(6) An indication of the usual practice in the
country as to the ordinary ratio between
the assessed value of property and the
current selling prices;
(7) Evidence concerning the price at which
similar property in the locality, both
within and outside the leased area, has
been sold, indicating dates of sales, or
could be Durchased.
In
In his letter of November 28, 1940, Lord Lothian
was good enough to inform me that the British and
Newfoundland authorities were agreeable to adding the
following sentence to the schedule listed in your
letter of November 11 to the Secretary of the Navy:
"(4) A staging point for land aircraft in
the immediate vicinity of St. George's".
After consultation with the War and Navy Departments I
request that the word "general" be substituted in the
above sentence for the word "immediate"; the sentence
would then read:
"(4) A staging point for land aircraft in
the general vicinity of St. George's".
The reason for this proposed change is that when an
Informal request was first made regarding this proposed
staging field the area had been seen by the United States
authorities only from the air.   Ground reconnaissance of
the area by United States officers has demonstrated that
the most suitable area is near Stephenville which is
about ten miles from St. George's.    I believe that the
situation would be adequately met, however, by continu-
ing to refer to this staging field as in the general
vicinity of St. George's.
You may recall that some time ago "r. Welles handed
Lord Lothian the draft of a proposed lease for the bases in
Newfoundland
2
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Newfoundland.    Our informal committee dealing with these
bases would be p\Lad to receive such comments on this draft
leese as your authorities may v:lsh to make.
I am, my deer Mr. Butler,
Sincerely yours,