Mr. Hay to Mr. Leishman.

No. 161.]

Sir: Your dispatch No. 131, dated February 16, 1899, with its in closures, is received.

The communication of His Excellency the President of the Swiss Confederation, addressed to you under date of the 14th of February, which accompanied your dispatch, has been carefully considered.

His Excellency was correct in assuming that we have no desire to withhold from Switzerland the usual grant of most-favored-nation treatment in respect to compensatory and reciprocal agreement, allowing to Switzerland the benefit of such concession for an equivalent compensation. The projet of treaty transmitted to him left all the Articles VIII to XII in force, except in respect to the claim of compensatory [Page 755] grants to third nations. The privilege claimed by His Excellency seemed to us to be involved in the articles as they remained after applying the construction of the treaty which was given in article 1 of our projet.

In order, however, to remove all doubt, we withdraw article 1 of the projet submitted to His Excellency, and propose to substitute the following articles, which repeat the language of Articles VIII and X of the existing treaty, with an added clause which follows substantially the customary provisions of our treaties with other European Governments:

Article I.

In all that relates to the importation, exportation, and transit of their respective products the United States of America and the Swiss Confederation shall treat each other, reciprocally, as the most-favored nation, union of nations, state or society. In order the more effectually to attain the object contemplated each of the contracting parties hereby engages not to grant any favor in commerce to any nation, union of nations, state or society which shall not immediately be enjoyed by the other party, who shall enjoy the same gratuitously if the concession shall have been gratuitous, or on giving a compensation as nearly as possible of proportionate value and effect, to be adjusted by mutual agreement, if the concessions shall have been conditional.

Article II.

The foregoing article is adopted as a substitute for Articles VIII, IX, and XII of the treaty between these high contracting parties signed at Berne on the 25th day of November, A. D. 1850, and the articles so numbered shall cease to have effect from the date of exchange of the ratifications of this convention.

* * * * * * *

In respect to the remaining suggestions of His Excellency as embodied in his projet of treaty, we regret to find them unacceptable in principle.

Article III of that projet reasserts the principle on account of which we felt obliged to denounce the existing treaty. It simply limits its application to a given list of exports. Our whole system of commercial treaties is based upon the principle of equality of treatment toward all friendly nations. Hence, all noncompensatory modifications of our tariff upon imports, whether by legislation or convention, inure to the benefit of all countries having most-favored-nation stipulations with the United States, and all compensatory modifications inure to the benefit of all who will give to the United States an equivalent compensation.

It was the necessity of bringing the Swiss treaty into harmony with this long-continuing policy of the United States which led to this correspondence. That object would be defeated by an acceptance of His Excellency’s projet.

The amendment of the existing treaty which we propose, while it secures no exceptional advantage to Switzerland, continues our mutual treaty relations on a basis of security against the effects of discriminating adverse action by either party, and leaves them free to adjust by a separate convention the conditions of their special commerce.

After the adjustment of this prior question of the existing treaty we shall be most willing to proceed with negotiations for continuing to Switzerland by reciprocal agreement the benefits of the concessions made to France which Switzerland now enjoys only for the limited time of the duration of the denounced treaty. This we hope to accomplish in the most friendly spirit.

It appears to us to be equally desirable for the interests of both countries that the general relations established by the treaty of 1850 [Page 756] should remain undisturbed. His Excellency the President will doubtless concur in this opinion. In that case, the only question is whether Switzerland will accept in respect to commerce the same position in her relations with the United States which is occupied by the other countries of Europe. This is the object of the proposals on our part. If they are accepted, the denunciation may be revoked, and the new convention can be made to go into effect at the expiration of the year’s notice already given, leaving to Switzerland the exceptional advantages now enjoyed until that date.

You will communicate the foregoing views to His Excellency, and leave with him a copy of this instruction. It will be more convenient for the negotiation if the Swiss Government will be pleased to give its instructions on the subject to the Swiss minister at Washington, who was formerly charged with them, and with whom the further negotiations may be conducted with greater facility.

I am, etc.,

John Hay.