Analyzing the results of the 1963 Canadian federal election, which saw the Liberal party victorious after six years of Progressive Conservative rule, American Ambassador Walton Butterworth predicted that Canada would henceforth more stable, responsible, sophisticated and generally cooperative than at any time since 1958. That Butterworth would single out that year as being of such importance is interesting but not a surprise. Although Tory leader John Diefenbaker became Canadian prime minister as head of a minority government in 1957, it was not until a snap election in March 1958 that he won a resounding majority of seats in the house of commons, the most to that point in Canada's history. A former lawyer and long-serving member of parliament, Diefenbaker was a fiery populist who rose to power on a growing tide of nationalism - some would call it anti-Americanism - that was coming to prominence in Canada thanks to uneasiness among Canadians over the economic ties between their country and the behemoth to the south. That Diefenbaker was a populist and a nationalist is secret. His clashes with John Kennedy, American president from 1961 to 1963, are well known and have been the subject of much academic and popular history. Less well known, and examined, is how Canada-US relations played out during the years 1957 to 1961 when Dwight Eisenhower was the American president.1Of the Diefenbaker-Eisenhower years, as Butterworth observed, 1958 served as an important benchmark, because, to many observers, it was clear that at this point something was rotten with the state of the CanadianAmerican relationship. Nationalism in Canada had come to the fore, the United States was subjected to frequent criticism from north of the border, and with a parliamentary majority Diefenbaker seemed poised to enact nationalist legislation, particularly in economics. In the late 1950s, a host of troublesome economic issues divided the two countries: Canadian trade with China, of which Washington disapproved; high levels of American investment in Canada, of which Ottawa was wary; the disposal of surplus US agricultural goods, which cornered Canada out of the market; and the imbalance in Canadian-American trade, which favoured the United States. These problems fuelled nationalist anger and contributed to Conservative electabllity. So throughout 1958 American diplomats, government officials, and legislators sought ways of dealing with Diefenbaker. Examining this relative high point of interest in how Canada-US relations functioned, this article traces reactions in Canada and the United States to Diefenbaker's electoral victories and nationalism, including American efforts to highlight and mitigate sources of Canadian discontent. Ultimately, these steps, which were largely applauded by Canadians, did little to stem the rise of Canadian nationalism, a force that loomed over bllateral relations throughout the following decades.REDISCOVERING HISTORYDiefenbaker's election victory in 1957 jolted Livingston Merchant, the American ambassador in Ottawa. Having been in the Canadian capital for a year, Merchant sensed that with the arrival of a Tory premier his position was going to become more stressful; he told the State Department that there was bound to be an intensification of nationalistic feeling, which could mean that trouble lay ahead, particularly in the economic field. Americans had much to be fearful of, for United States investment in Canada had doubled from 1950 to 1957, from US$3.58 billion to US$8.33 billion, and US firms were heavily involved in a wide range of sectors from mining and manufacturing, pulp and paper, and oil and gas extraction. Merchant's foreboding soon dissipated, however. Meeting the new prime minister soon after the election, the ambassador came away pleased that, while certainly nationalistic, the new government was not anti- American. In spite of a sharp exchange over economic issues their talk was friendly and Merchant left believing that there would be no change in the fundamentals of Canadian foreign policy, a view Secretary of State John Foster Dulles came to share. …