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For your further confidential information and guidance, the Department was informed some time ago that there was a movement on the part of Spain to seek from the countries of Latin America special commercial concessions in return for certain advantages to be accorded to their commerce in Spain. In this connection see the Department's circular instruction dated April 19, 1926.°
Reference is made confidentially to the Embassy's despatch No. 346 of December 20, 1923, which touched inter alia on the possibility that the Chilean Government would desire some exception to the most favored nation clause covering either the Latin American countries as a whole or, more specifically, Bolivia and Argentina. While it would appear inadvisable to raise the question of exceptions in any discussions with the Chilean Government, the Department suggests that, in case Chilean officials should introduce the matter, you might assume an attitude of discouraging the exemption of any large group of countries, and in case the suggestion is made that one or two specific countries should be exempted, you might state that you will report the matter to Washington. You will of course avoid any commitment.
The Department either has transmitted or expects at an early date to transmit instructions, similar to the present instruction, to the American missions in the other South American capitals except Ecuador, the political regime now functioning in which is not recognized by the United States, and, at least for the present, Panama, with which there remains pending an important treaty of a different character.1 I am [etc.]
FRANK B. KELLOGG
The Ambassador in Chile (Collier) to the Secretary of State
SANTIAGO, October 6, 1927—6 p. m.
[Received October 7–9:03 a. m.] 146. Minister of Foreign Affairs after studying German treaty is willing to negotiate on those general conditions but says Bolivia would have to be excepted because of economic situation and existing treaties and future political reconciliation. Last night Under Secretary told me both Peru and Bolivia would have to be excepted but Minister of Foreign Affairs mentioned only Bolivia. I told Under Secretary exception was too great. Minister of Foreign Affairs said he would have to create a commission on which Minister of Hacienda
10 i. e., the unperfected treaty between the United States and Panama, signed July 28, 1926. See Foreign Relations, 1926, vol. II, pp. 828 ff.; also ibid., 1927, vol. WII, pp. 484 ff.
and Minister of Fomento would be represented. Minister of Foreign Affairs said he would discuss matter with two colleagues mentioned and perhaps could give me a memorandum Monday, but when I asked if he would like to have you prepare a draft treaty he said yes enthusiastically. I suggest you rush it to me unless you can cable me what to draft by reference to German treaty. I have presented matter in such a manner that Minister of Foreign Affairs almost thinks he suggested it and I believe I have convinced him that to conclude a treaty would cover him with glory. [Paraphrase.] He informed me that he had recently negotiated commercial conventions with Germany and Spain. [End paraphrase.] I do not believe this is generally known. He assured me that nothing in them would prevent entering into treaty with us along these lines, that there is no favor granted that would be obstacle to our negotiations. I think I have inspired Minister of Foreign Affairs with desire to negotiate at once and it is barely possible that a treaty could be concluded in time to submit to Congress at its special session which it is now thought will convene on October 17th.
I do not think any treaty can be concluded unless Bolivia is excepted and it is likely that Congress will insist Peru also be excepted. Minister of Foreign Affairs thinks congressional discussion would make it impossible to conclude a treaty in less than two months. Under Secretary says six months because of necessity of consulting Chamber of Commerce for promoting national industry, et cetera.
The Secretary of State to the Ambassador in Chile (Collier)
WASHINGTON, October 14, 1927–7 p.m. 52. Your 146, October 6th, 6 p. m. Please draft treaty on basis of treaty with Germany as follows and submit it to the Foreign Office. All references herein are to Articles of that Treaty. Articles of your draft when completed will have to be renumbered.
Use without change Articles 2, 3, 4, 5, 6, 8, 9, 10; 17 to 28 both inclusive. Strike out entirely articles 14, 15 and 30. Use other articles amended as follows.
Preamble. Substitute “Chile” for “Germany" and leave names of plenipotentiaries blank.
Article 1. Remove brackets from last paragraph and rewrite as follows: "Nothing contained in this Treaty shall be construed to affect existing statutes of either of the High Contracting Parties in relation to the immigration of aliens or the right of either of the High Con
tracting Parties to enact such statutes.” (See Treaty Series Number
Article 7. Use paragraphs 1, 3 and 6 without change. In paragraph 2, line 4, after “or” insert "charges or bases of such duties or charges and no." In line 4 substitute “or” for “and no." In line 8 after “other” insert "from whatever place arriving.” At the end of paragraph 2 add "nor shall any such duties, charges, conditions or prohibitions on importations be made effective retroactively on imports already cleared through the customs or on goods declared for entry into consumption in the country.” Between paragraphs 3 and 4, insert the following paragraph:
“In the event of licenses being issued by either of the High Contracting Parties for the importation into or exportation from its territories of articles the importation or exportation of which is restricted or prohibited, the conditions under which such licenses may be obtained shall be publicly announced and clearly stated in such a manner as to enable traders interested to become acquainted with them; the method of licensing shall be as simple and unvarying as possible and applications for licenses shall be dealt with as speedily as possible. Moreover, the conditions under which such licenses are issued by either of the High Contracting Parties for goods imported from or exported to the territories of the other Party shall be as favorable with respect to commodities, formalities and otherwise as the conditions under which licenses are issued in respect of any other foreign country. In the event of rations or quotas being established for the importation or exportation of articles restricted or prohibited, each of the High Contracting Parties agrees to grant for the importation from or exportation to the territories of the other Party an equitable share, in view of the normal volume of trade in the particular class of goods between the two countries, in the allocation of the quantity of restricted goods which may be authorized for importation or exportation. In the application of the provisions of this paragraph no distinction shall be made between direct and indirect shipments. It is agreed, moreover, that in the event either High Contracting Party shall be engaged in war, it may enforce such import or export restrictions as may be required by the national interest." In paragraph 4, line 3, after “extend” insert "by treaty, law, decree, regulation, practice or otherwise.” For paragraph 5, use corresponding paragraph of Treaty with Esthonia, which includes goods exported as well as goods imported, and substitute therein “Chile” for "Esthonia.” Between paragraphs 5 and 6 insert new paragraph as follows:
"In the same manner there shall be perfect reciprocal equality in relation to the flags of the two countries with regard to bounties, drawbacks and other privileges of this nature of whatever denomination which may be allowed in the territories of each of the Contracting Parties, on goods imported or exported in national vessels
Treaty of Dec. 23, 1925, with Estonia, Foreign Relations, 1925, vol. II, p. 70.
so that such bounties, drawbacks and other privileges shall also and in like manner be allowed on goods imported or exported in vessels of the other country.”
In paragraph 7 strike out lines 2 to 5 inclusive and 7 to 12 inclusive. Compare with last paragraph of Article 7 of the Treaty with Esthonia. A new Article relating to customs procedure will be transmitted later for insertion immediately after Article 7. Do not postpone submission of draft to Foreign Office pending its receipt.
Article 11. In lines 22 and 27 substitute "High Contracting Parties" for "United States."
Article 12. Add at end of second paragraph a new sentence as follows: "If such consent be given on the condition of reciprocity the condition shall be deemed to relate to the provisions of the laws, National, State or Provincial under which the foreign corporation or association desiring to exercise such rights is organized."
Article 13. Strike out the last sentence of the first paragraph.
In place of original articles 14 and 15 insert the following Article of two paragraphs
“Commercial travelers representing manufacturers, merchants and traders domiciled in the territories of either High Contracting Party shall on their entry into and sojourn in the territories of the other Party and on their departure therefrom be accorded the most favored nation treatment in respect of customs and other privileges and of all charges and taxes of whatever denomination applicable to them or to their samples.
If either High Contracting Party require the presentation of an authentic document establishing the identity and authority of a commercial traveler, a signed statement by the concern or concerns represented, certified by a consular officer of the country of destination shall be accepted as satisfactory."
Article 16. Strike out of the United States" from line 11. In lines 22 and 23 substitute “or to any discrimination” for “and shall be given national treatment." Substitute "or any other matter” for "and all other matters."
Article 29. Strike out everything following "zone" in line 12.
Article 32. Substitute "Spanish” for "German.” Leave name of City and date blank.
Omit Senate resolution. Reservation regarding immigration is incorporated in text of draft as last paragraph of Article 1. Department will instruct you further regarding reservation as to national treatment of shipping. Prepare draft but do not present it pending further instructions.
The complete text will be forwarded by early pouch. Consideration is being given in regard to exception of treatment accorded Bolivia and Peru.
The Ambassador in Chile (Collier) to the Secretary of State
SANTIAGO, October 24, 1927–4 p. m.
[Received 9:10 p. m.] 161. Your telegram 52, October 14, 7 p. m. Am uncertain whether the Department wishes me to submit draft of commercial treaty to the Foreign Office as stated in two places or whether it wishes this withheld pending further instructions as distinctly stated in end of message. Please cable instructions.
Minister of Foreign Affairs tells me Minister of Hacienda and new Minister of Fomento or Promotion are considering the treaty in principle. Minister of Hacienda is said to oppose waiver of power to grant special favors.
Special session of Congress not yet called owing to disturbed internal political conditions . . . These have preoccupied the attention of the Cabinet so that treaty could not have been presented advantageously last week even if that were your desire. Moreover rumors of Cabinet organization would have made such a move useless. It is now thought Congress may convene middle of November.
The Secretary of State to the Ambassador in Chile (Collier)
WASHINGTON, October 27, 1927—6 p.m. 56. Embassy's telegram number 161, October 24, 4 p. m. Please cable Department whether you think any material prejudice to negotiations would result if we deferred submittal of draft treaty until the middle of November or thereabouts, so as to allow time for further consideration of question whether to include in draft treaty substance of United States Senate reservation regarding national treatment of shipping.
711.252/8: Telegram The Ambassador in Chile (Collier) to the Secretary of State
SANTIAGO, October 30, 1927-noon.
[Received 5 p. m.] 164. Your telegram 56, October 27, 6 p. m. Believe postponement desirable, will promote ultimate success. Special session of Congress not yet called and date uncertain. Every measure in which we are