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sion in which I took no part on scope of article as to whether it refers purely to customs or other matters. Debate inconclusive and somewhat perfunctory.

Article 3. I introduced redraft of article and made brief statement following closely instructions your 65. While no exception was taken to the idea of incorporating in some form provisions of the convention of November 3, 1923, vigorous debate took place on subparagraph (e), French and Italian delegations opposing its inculsion on the ground that scope is too broad and would necessitate another conference to debate it. Austrians and Poles supported subparagraph (e) but Austrians desired elimination of phrase "having regard to the normal volume of trade of the respective countries in the particular class of goods in question.” Being requested by the President at the instigation of Dutch delegation to explain this phrase, I stated that it is not to be considered as a mathematical formula but as a principle which supplements the previous phrase "an equitable share of such importation or exportation.”

Article 11. No debate on this article. In view of the somewhat delicate position of America in this matter I preferred not to carry out in plenary session instruction on page 14 your 65 but to talk over matter informally with President pointing out our difficulty and requesting his cooperation. Will report results.

Chair announced no plenary session for afternoon but meetings of groups 1 and 2 of rapporteurs.

WILSON

560.M2/37 : Telegram

The Secretary of State to the Chief of the American Delegation

(Wilson)

WASHINGTON, October 19, 1927–9 p. m. 5. Your 4, October 18, 10 p. m. As long as there is probability of usefully employing the draft article concerning export duties set forth in Department's 1, October 17, 5 p. m., Rumanian text, even as revised, would be unsatisfactory because conflicting. Bearing in mind that Rumania employs export duties extensively, at least for revenue purposes, you may consider whether you would care to suggest privately to your Rumanian colleague that in view of the Economic Conference recommendations regarding export duties, he would wish to substitute "import" for "customs” in his revised text. Alternatively, you might allow the present Rumanian text to be adopted tentatively and make the change indicated in case later developments should bring about adoption of article on export duties. Department leaves to your discretion time and manner of your introducing, in

the absence of satisfactory similar declaration by another delegate, the addition to Article 1 set forth in its Instruction No. 65, October 6. See Department's comment, page 2 of that instruction. Comment on remainder of your telegram follows.

KELLOGG

560.M2/44 : Telegram

The Chief of the American Delegation (Wilson) to the Secretary

of State

GENEVA, October 19, 1927-11 p. m.

[Received October 1949:31 p. m.] 8. Afternoon, first meeting, group 2.

Article 3. Discussion hinged on American amendment reported my 5, October 19, 2 p. m. Detailed information was requested on exact interpretation of phrases occurring in subparagraph (e) notably "equitable share", "normal volume of trade" and last sentence. Delegation was embarrassed by lack of specific interpretation (see my 2, October 18,1 p. m.18). Very determined opposition developed to subparagraph (e) in the present form, notably, that it involved principles of wider scope than contemplated in draft of convention and introduced the question of most-favored-nation to allocation of rations. French delegation which in plenary session had opposed American alteration in toto, finally offered compromise reading as follows:

"In the event that, during the application of the provisions of the present Conference, certain states should be led to maintain certain prohibitions and retain a few exceptions (French, derogations) in the form of licenses, the following rules shall apply: (a), (6), (c) and (d) of the United States proposal. Point (e) of this proposal' shall be replaced by the following sentence:

'The Conference did not express itself on the method of allocation of quotas, but expressed the opinion that an equitable allocation of these quotas is one of the essential conditions of equitable commercial treatment of the states'." The foregoing to be inserted in final act.

Convinced that we could not obtain full satisfaction on this article, I stated that I would refer this compromise to you, reserving the right to reopen the question in case your decision was unfavorable. The Department may prefer the phraseology which seems preferable to me, namely, to begin the last paragraph: "The Conference is of the opinion that an equitable allocation, et cetera”. If so I should nevertheless appreciate instructions as to whether I should accept the

18 Not printed

original phraseology in the event that I am unable to cause the adoption of this alteration. Furthermore, you may care to provide for the difficulty outlined on page 4, middle paragraph your 65, by insisting on the insertion after the word "quotas" of the words “to other contracting states”.

Request urgent reply as to the Department's views on compromise and further information as to specific Comission).

WILSON

560.M2/37 : Telegram

The Secretary of State to the Chief of the American Delegation

(Wilson)

WASHINGTON, October 20, 1927—7 p. m. 6. Your 4, October 18, 10 p. m.

(1) Referring to Dutch suggestion Department feels that question of level of import tariffs is outside the agenda and that nothing could in any event be gained by bringing into discussion such a controversial question.

(2) Department concurs that under draft convention rights and obligations extend to contracting parties only, also that question of obligations of individual contracting parties under treaties of their own with particular states ought not to be discussed at this Conference. For your own information, however, it appears that a most-favored-nation provision in the form now being included in the treaties we are negotiating, if included in a treaty between this Government and a state party to the proposed convention, would oblige such state to extend to American commerce any favor that, under the convention, it extended to parties thereto, regardless of whether the United States were such a party. It should be observed, however, that Article VII of the treaty proposed by the United States to Austria and to other countries, calls for equitable rather than equal treatment in respect of rations or quotas.17

(3) Department approves your statement in discussion of Article 6 and awaits your further comment before commenting upon discussion of Article 9.

KELLOGG

17 For previous correspondence as to the status of negotiations with Austria regarding the treaty, see Foreign Relations, 1925, vol. I, pp. 516-517. The text of the draft treaty as submitted to Austria in 1923, printed ibid., 1923, vol. 1, p. 400, does not include the paragraph calling for equitable rather than equal treatment in respect of rations or quotas. For text of this paragraph in draft treaty submitted to France, see ibid., 1927, vol. 1, pp. 639, 842.

238346-42-vol, 1----2:3

560.M2/44 : Telegram

The Secretary of State to the Chief of the American Delegation

(Wilson)

[Paraphrase)

WASHINGTON, October 20, 1927–8 p. m. 7. Your No. 8, October 19, 11 p. m. As some time may elapse before provisions of a convention to abolish prohibitions and restrictions become fully effective, and as numerous exceptions seem likely to be adopted, Department holds view that article 3 is of importance and wishes you to make every reasonable effort to have this article adopted approximately in form in which you proposed it in accordance with Department's instructions.

Department is fearful that any provision in a multilateral convention less positive and inclusive than provisions it wishes to incorporate in its bilateral treaties will weaken its position in negotiating such treaties. Accordingly, question presents itself whether it might not be preferable to omit article 3 altogether if unobtainable in reasonably satisfactory form. Most of the other countries are probably parties to convention for simplification of customs formalities and are, in consequence, bound by its provisions whether or not it is quoted or referred to in convention now being drafted.

Essential portion of subdivision (e) is, in Department's opinion, the part requiring granting of licenses and assignment of quotas and formalities of whatever kind to be equitable. If you are able to obtain provision substantially to this effect you may accept it and consent to omission of rest of other provisions of subdivision (e), including the one regarding normal value to trade.

Department perceives no serious objection to draft introduction as proposed by French starting at "In the event that”, but thinks drafting is not as good as your substitute. As meaning is substantially same, Department perceives no reason to change our draft. Not clear, furthermore, why French should object to declaration in agreement but should be willing to insert it in final act.

Rather than include nonbinding provisions in final act or elsewhere, the Department suggests for your consideration that, after the precedent of the Customs Formalities Conference of 1923, provisions be included when they are acceptable to most states but be subject to reservations by states finding difficulties. Before any such arrangement is proposed, however, please comment and request final instructions.

If you are not able to have included provision substantially equivalent to paragraph (e), report your recommendations and request instructions.

Your suggestion that “to other contracting states" follow “quotas” is approved, but Department does not regard this matter as of great importance.

KELLOGG

560.M2/45 : Telegram

The Chief of the American Delegation (Wilson) to the Secretary

of State

GENEVA, October 20, 1927--10 p. m.

[Received October 21–2:23 a. m.] 11. Sixth session. British introduced fairly satisfactory article relating to prison-made goods. Also one embodying ideas similar to yours on standards. I introduced yours on standards and, knowing British were introducing one on other question, refrained for the moment from doing so. Also introduced in accordance with instructions amendments on article 4, paragraphs 6, 9, and 10 and on article 7. Since article 5 is the crucial one I withheld amendment for the moment to watch course of events.

Exception was taken by Italians, French, and Germans to a further paragraph under article 4 relative to standards. I therefore made a statement to dispel idea that our regulations constituted a barrier to trade and endeavored to demonstrate that they are great assistance to trade.

President then declared that unless Conference would refrain from details and attack essence of problem he would be compelled to call on us one by one for our declaration as to whether we desired in general to strengthen the convention or to weaken it. The British desired in general to eliminate from scope of convention everything which is not strictly of economic nature and preached the principle of making a document such as could be signed by the maximum number of states. The Germans insisted on revision of paragraph 1 of article 4 to cover only arms and munitions of war. The Italians are inclined to agree with the Germans while the French made no secret of their dissatisfaction with the present situation relative to British dye restrictions. This is behind a great portion of discussion going on between these four nations but it has not clearly come to surface yet. I learn that the British intend, if it comes to the surface, to defend the dye restrictions under article 4, paragraph 1 as necessary for national defense to build an industry capable of producing explosives.

I presented general survey without going into details, reserving that for the subcommittee, on our views respecting the articles under debate, namely, 4, 5 and 7. (See my 12, October 20, 10 p. m.)

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