It is 1989 and the United States is in an economic freefall because "From Franklin Roosevelt on, every chief executive has played a game of tag, pinning a multiplying financial burden on the office of his successor," (said by the POTUS in part 1) and by increasing scarcity of oil.
CIA estimates put the depletion of the Middle East oilfields at just two years away. The total worldwide demand for oil is more than 50% of estimated supplies and while nuclear and other alternative energies are trying to make up the difference they are coming up short. Canada is now the exclusive supplier of electricity to 15 states in the northeast after investing billions in a massive new hydro-electric power plant in Quebec. To make matters worse, a top-secret experimental sub developed by NUMA has recently discovered a stratigraphic trap, potentially the richest kind of oil deposit, which lies just across the border in the territorial waters of Quebec.
Radicals in Quebec resembling the FLQ, secretly led by Canadian MP Henri Villon, are pushing for a referendum on independence from Canada. Newly elected Canadian Prime Minister Charles Sarveux fears that if Quebec declares independence Canada will disintegrate as the other provinces either follow Quebec into independence or possibly petition the U.S. for statehood.
Heidi Milligan, a U.S. Navy Lieutenant Commander, is working on her PhD in history by researching the naval policies of President Woodrow Wilson between assignments. She stumbles across a reference to a "North American Treaty" in a long forgotten letter and is intrigued when she finds out that all traces of the treaty appear to have been erased from the National Archives.
The North American Treaty, it is later revealed, was a landmark agreement between the United States and the United Kingdom. In 1914, the U.K. finds itself in economic hard times with war looming on the horizon. Fearing that the nation will not survive without a large infusion of capital, the Prime Minister, H. H. Asquith, with the cooperation of King George V, quietly approach the United States and offer, for the sum of one billion dollars, to sell Canada to the United States. President Wilson quickly agrees and pays a down payment of $150 million to seal the deal. Tragedy strikes when, on the same day in May 1914, the American copy of the treaty plunges to the bottom of the Hudson River when the Manhattan Limited express passenger train attempts to cross a downed railroad bridge and the British copy plunges to the bottom of the St. Lawrence River when the linerRMS Empress of Ireland
is accidentally rammed by a Norwegian collier. With both nation's copies of the treaty lost and the British cabinet outraged at having Canada sold off without their knowledge, Wilson orders all records of the treaty destroyed and records the $150 million payment as a war loan.
Now that knowledge of the treaty has once again emerged, the President of the United States orders NUMA and Dirk Pitt to attempt to recover the copies of the treaty, which have both lain submerged for more than 70 years. The treaty becomes the cornerstone in the President’s plan to save the United States from national bankruptcy by proposing an audacious plan, to merge the United States and Canada into one nation, "the United States of Canada."
The British see the loss of Canada to the United States as the start of the unacceptable and unthinkable disintegration of their Empire. If Canada is allowed to leave the Empire, so too might Australia, or even Wales and Scotland. The British Secret Intelligence Service recalls one of their best former agents, Brian Shaw, from retirement and orders him to keep an eye on the American salvage efforts and to ensure the destruction of the North American Treaty at all costs.
The salvage team decides to try for the St Lawrence copy of the treaty on the grounds that this copy would have been packed in waterproof material to guard against the risk of damage on the sea voyage. Despite efforts by Shaw and hired thug Foss Gly to sabotage the project, the treaty is recovered, but it transpires that the waterproof covering was unable to withstand several decades of immersion and the document has turned to pulp.
They then try to recover the Hudson copy, hoping that some freak of chance will have saved it from a similar fate. The atmosphere becomes increasingly panicked as extensive searches fail to discover any trace of the wrecked train, either in the wreckage of the bridge or elsewhere in the river. Extra suspense is provided by the mystery of the "ghost train" which on stormy nights howls up the abandoned trackbed and suddenly vanishes on reaching the site of the bridge.
Pitt solves this particular mystery by chance - walking along the trackbed one night the "ghost train" passes him and he sees that it is faked by means of a locomotive headlight and a PA playing locomotive sounds running along a cableway strung above the trackbed. This gives him the clue as to the whereabouts of the real train - it was in fact the victim of an elaborate scheme to rob it of a cargo of bullion. One group of robbers demolished the bridge with black powder charges, then staged a holdup of the nearest station; while one of them kept the stationmaster at gunpoint on the floor, another, who remained outside, played a gramophone record of train sounds and flashed a lantern through the windows to give the impression of a passing train, misleading the stationmaster into thinking that he had failed to prevent the train tumbling off the downed bridge. In fact another group of robbers had hijacked the train further up the line, diverted it along a disused spur into an abandoned underground quarry, and then blown up the entrance to the quarry concealing the train and allowing them to remove the heavy load of bullion at their leisure through the quarry's old ventilation tunnels.
Pitt locates the quarry and discovers that the robber gang had failed to ascertain whether the ventilation tunnels were actually passable; in fact they were flooded, trapping both robbers and train passengers in the quarry to starve to death. Pitt passes through the tunnels by means of diving equipment and finds the train. Shaw, meanwhile, has mined into the quarry from above and arrives at almost the same moment. There is a fight for the possession of the treaty - which is intact - and Pitt is victorious.
Pitt races desperately to deliver the treaty to the President before he delivers a crucial address in which possession of the treaty will be decisive. He makes it by the skin of his teeth. The President receives the treaty, announces that from now on Canada and the U.S. will be united as "The United States of Canada".
Heidi Milligan and Pitt say goodbye at Kennedy Airport, where Pitt has arranged for Shaw (who is currently under arrest as an enemy agent) to also say goodbye. After Heidi leaves to board her plane, Pitt informs Shaw that he has arranged for Shaw's release and departure on the same plane with Heidi, claiming that "The President owes me a favor." Shaw releases himself from his handcuffs and Pitt remarks, "James Bond would have been proud of you ... I hear you two were quite close."