File No. 19654/9.
[Inclosure.—Translation.]
The Minister for Foreign
Affairs to Minister Sherrill.
Foreign Office,
Buenos
Aires, February 28,
1910.
Mr. Minister: The contract entered into
between the National Executive and and Mr. John Oldman having been
approved by Congress, to which matter your excellency’s note of July
17 last year refers, whose receipt I had the honor to acknowledge
the 31st of the said month, this ministry did not consider a reply
thereto indispensable, but the fitness of such having been intimated
I am pleased to defer to that desire by means of this note.
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Your excellency, in the said note of July 17, states, under
instructions, that your Government supposes that that of this
Republic had in mind the treaty of 1853 with the United States and
it was not its intention to infringe in any way its provisions, in
making a certain cable contract called the “Contrato ad referendum”
entered into between Executive and Mr. John Oldman on behalf of the
Western Telegraph Co., for the construction and development of a
direct cable between the Argentine Republic and the Continent of
Europe. Your excellency adds that you hope the Argentine Government
will wish to avoid all infraction of American rights under the
treaty of 1853 and finally calls my especial attention to articles
8, 13 and 17 of that contract.
The assumption of the Government which your excellency worthily
represents is very logical and just. This Government has not
forgotten the provisions of the said treaty, not only because they
are obligations which it is always ready to fulfill, but also
because it is its greatest desire to tighten the bonds of friendship
which unite it with the United States.
This Government considers that the contract with the Western
Telegraph Co. by its very nature in no way affects the treaty of
1853, and that the most-favored-nation clause therein contained can
not be invoked in this case.
The effect and the application of this clause is subordinate to the
legal principle of secundum subjectum materiam—that is to say,
according to the material. That clause being in a treaty of
commerce, its application and the favors which it brings can not be
cited, except in so far as they refer to commercial relations and
especially regarding customs tariffs, free trade, or protection,
without its influence comprehending contracts on ways of
communication in general, whether by telegraph or railroad, these
being considered as public services and consequently subject to
special conventions.
The said principle that the most-favored-nation clause includes only
the regulations which govern trade relations has been adopted by
many countries, among them the French Republic, where the courts
have, in cases submitted to their jurisdiction, expressly so decided
it.
Moreover, article 3 of the Treaty of Friendship, Commerce, and
Navigation of 1853 between the Republic and the United States, which
doubtless served your excellency as a base for the observations
which now occupy me, says “That any favor, exemption, privilege, or
immunity whatever, in matters of commerce or navigation, which
either of them has actually granted, or may hereafter grant, to the
citizens or subjects of any other Government, Nation, or State,
shall extend, in identity of cases and circumstances, to the
citizens of the other contracting party, gratuitously, if the
concession, etc.” So that its results are confined to acts of
commerce and navigation and the concession in question can not be
considered as such, since, as I have shown, ways of telegraphic
communications are considered as public services.
Examining this question from another point, it seems proper to add
that the landing of cables on one territory to connect it with
another country is a matter which is exclusively subject to the will
of the sovereign of that territory, from which it follows that the
concessions for its improvements are also subject to the will of
that sovereign represented by the government of the nation.
This theory, which may be said to be universal, has been applied by
England, France, Spain, Portugal, Brazil, Peru, Ecuador, Colombia,
Mexico, Japan, etc., in granting exclusive concessions and by the
United States itself, as set forth in an official report, of the
Attorney General regarding the landing of a cable between territory
of the Union and that of the Republic of Cuba. (Official opinions of
the Attorneys General of the United States, Washington, 1900, Vol.
XXII, pp. 514 to 519.)
It says, among other things, this:
The intention of connecting our territory with foreign
territory is a matter which is subject to the sovereign
control of this Government * * * permission to land a cable
can not be given nor with held in opposition to the desire
of the government which exercises sovereign power. The
laying of cables-especially in this last quarter of a
century, was done at great cost and danger and it has been
very common among nations, including the United States, to
grant exclusive concessions for a term of years to-companies
which raised the necessary capital and were engaged in such
enterprises.
I believe that the matter is sufficiently explained to demonstrate
that the concession cited in no way affects the treaty of 1853, and
that this Government, in according it, did not desire in any manner
to infringe the condition thereof and that I might omit referring to
articles 8, 13, and 17 of the contract with the Western Telegraph
Co., to which my attention was kindly called.
Nevertheless, and with the desire to be deferential to your
excellency and your Government, I will add in this respect, that, if
indeed articles 8 and 13 of that contract constitute an obligation
on the part of the Argentine Government not to accord its assistance
to another company and to employ the cable of the Western for its
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official dispatches,
these obligations are compensated for by those which the company
incurs for the benefit of the State, and thus is decided the
problems of transcendental importance of direct communications with
the Continent of Europe and North America, freeing them from the
surcharges and high rates to which they are subject to-day.
With regard to article 17, the right which it establishes is simply a
preference and does not constitute a privilege, having reference to
the legitimate and reasonable purpose of assuring during a certain
time the interest on capital invested, and it is only under like
conditions that cables which could be constructed in virtue of
conventions with foreign powers are excluded.
I renew, etc.,
