File No. 22772/4.

The Secretary of State to Chargé Tarler.

No. 205.]

Sir: The department acknowledges the receipt of your confidential dispatch, No. 565, of February 24, 1910, on the subject of the apparent discrimination against American manufactures in so-called “open tenders” for Government work; also of Mr. King’s No. 539, of November 8, 1909, inclosing copies of specifications, tender, and contract for the supplying of cast-iron pipes and accessories in the Bangkok waterworks, as well as a copy of a letter from a local firm, dated the 17th idem, on what are termed “specials.”

The department has carefully noted what you state as a firm conviction that the so-called “open tenders” for Government supply work are such in name only; that the specifications and conditions imposed are discriminatory against American manufactures and in favor of those countries which have advisers in the departments which formulate the said specifications and ultimately award the final contracts; and that the present system, therefore, as countenanced by the Siamese Government, defeats the practical applica-cation of the principle of equal commercial opportunity for all nations—a principle which you state must obtain if American commercial interests expect to gain a foothold in Siam.

In this connection the department had already noted Mr. King’s statement with reference to the opinion reported as generally prevailing at Bangkok that tenders for the waterworks supplies for that city, drawn up by a foreign adviser in the public works department, have been specifically shaped for a local firm of the same foreign nationality. He also pointed out that for political reasons advisers of different nationalities, loaned by their Governments, have been placed in the several departments, and that it is natural that such advisers in purchasing supplies for their respective departments should favor the market witn which they are best acquainted and for which they are expected by their Governments to work. These views are now confirmed by you in the dispatch under acknowledgment.

It would appear that as a result of this policy of favoritism the commerce of Siam, though nominally a country granting equal and impartial privileges for trade, is closed in great part to the markets of the United States, and American manufacturers and exporters interested in the present and future outlook for American trade in that country may well be apprehensive. Moreover, such a situation seems to this Government to indicate a disregard if American treaty rights.

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Article X of the treaty of 1856 between the United States and Siam provides:

The American Government and its citizens will be allowed free and equal participation in any privileges that may have been or may hereafter be granted by the Siamese Government, to the Government, citizens, or subjects of any other nation.

This Government holds that this article has application not only to free and equal privileges in the commerce conducted through the seaports of Siam, but equally to a fair field and no favor in competing for the trade of the Siamese Government as it arises in the several departments. The right and privilege of fair and open competition for the trade of Siam in all its departments should be granted to all nations, and a recognition of this principle carried into practice would furnish to the Siamese Government the right and privilege in turn to buy in the market affording the best advantage. Such a liberal interpretation guaranteeing open tender in all Government contracts is but the logical and necessary corollary of the open-door policy.

It is believed that a declaration of principle to the above effect would upon becoming operative open the way for a larger and more substantial progress in Siam and would operate powerfully to enhance her own commercial and industrial interests.

The traditional friendship between the United States and Siam, which has existed unbroken from the commencement of diplomatic intercourse between the two countries, is without doubt destined to become more intimate in the future, since the possession of the Philippine Islands by the United States has brought the two countries into a relationship of neighbors, and it is believed by this Government that the cultivation of sentiments of neighborly good will would be no less agreeable to Siam than to the United States. The position of this Government on the question of the open door and equal opportunity and the extent of our commerce and other interests, both actual and prospective, warrant our taking the positive stand outlined above in favor of open tender on all Government contracts in Siam, and this Government would learn with great satisfaction of the willingness of the Siamese Government to assure free and impartial conditions of tender for supplies for the various Government departments.

You may present formally to the Siamese foreign office the views of this Government as above outlined.

I am,

P. C. Knox.