No. 348.
Mr. Bell to Mr. Bayard.

No. 76.]

Sir: Referring to ray No. 60 of the 26th October last, I now have the honor to inform you that the minister of foreign affairs, Mr. Van Karnebeek, has replied to the observation comprised in the report of the commission of the Second Chamber respecting the budget of the department of foreign affairs for the year 1886.

The minister, after referring to the protocol of the conference upon the Suez Canal, published by the English Government, admits that the conference did not reach the desired result.

It is claimed, however, that there is ground for the belief that a practical solution of the pending questions will be arrived at through diplomatic negotiations.

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The minister says that the new treaty of commerce and navigation with Spain has encountered great difficulties owing to the conclusion of pretended treaties of reciprocity which the United States have concluded with some American states and with Spain, by virtue of which treaties there is assured, on one side and on the other, certain favors on the condition that they will not be granted to third powers in virtue of the “most favored nation clause.”

The treaty with Spain, the minister further says, concerns especially the islands of Cuba and Porto Rico, and from the intimation from the Government of Spain this treaty will make it difficult to admit the Netherland vessels and merchandise in those two colonies upon the footing of the most favored nation; that is, upon the footing of the United States.

On the other hand, the Netherlands Government does not consent to the new theory adopted by the United States and Spain as to the signification of the “most-favored nation clause,” a clause upon which are based all the treaties of commerce concluded by the Netherlands.

Consequently the Netherlands Government have decided to suspend temporarily the negotiation with Spain, and especially has this course been determined upon as it has been shown that the treaty of reciprocity between the United States and Spain has produced a very unfavorable impression among the other powers, and as it has also encountered very serious opposition in the United States, it is not improbable that in the end it will not be ratified.

The question of the importation of Netherlands sugar into the United States has by right attached itself to the question of the treaty of reciprocity, and must depend, therefore, for its fate upon this treaty. * * *

I have, &c.,