711.5221/12: Telegram
The Acting Secretary of State to the Ambassador in Spain (Willard)
No. 2116. Department’s telegram 2107, April 4, 1919, 11 A.M.61
You will address a note to Minister of Foreign Affairs textually as follows:
“By a note dated May 8, 1918, after stating that since the Spanish Government apparently considered that it was not in a position to acquiesce in the arrangement proposed by my Government to eliminate from the treaty of July 3, 1902, as of July 1, 1916, the stipulations which were inconsistent with the provisions of the Act of Congress approved March 4, 1915, known as the Seamen’s Act, I gave your Excellency, on behalf of the Government of the United States, a notice of termination of the treaty in its entirety, whereby the treaty would in due course expire on May 8, 1919.
On February 12, 1919, the Spanish Ambassador at Washington proposed to the Government of the United States that it withdraw the notice of termination and abrogate instead Articles 23 and 24 thereof. I am instructed by my Government to say to your Excellency that it desires to accede to the wishes of the Spanish Government in this matter, but it is of the opinion that at this time and in this connection, two other matters which have been the subject of correspondence between the two Governments should be arranged.
On several previous occasions I have had the honor to point out to the Spanish Minister of Foreign Affairs that the Government of [Page 56] the United States is of the opinion that the discrimination by the Spanish Government against imports of American coal and coke by reason of the Spanish transport tax favoring coal coming into Spain from European countries was not in accordance with the equality and reciprocity of treatment assured to citizens of the United States by the treaty of July 3, 1902. In the note from the Minister of State to me of February 21, 1914,62 it was pointed out that the readjustment desired by my Government could be accomplished only by means of a new law, and in a note of March 23, 1914,62 the Minister of State suggested that an agreement on this point might be had by a special treaty between the two countries. Subsequently, however, by Royal Decree dated April 7, 1915, Spanish customs duties and transportation taxes on coal of foreign origin were removed. The Government of the United States is of the opinion that treatment equally favorable to that accorded by the Spanish Government to coal and coke from European countries should be permanently secured to American coal and coke at this time.
In proceeding therefore to the withdrawal of the notice of termination of the treaty of 1902, my Government desires to obtain the formal assurance of the Spanish Government that in the event that the Government of Spain shall revive the transport tax on coal imposed by the law of July 20, 1900,63 or shall enact new legislation of similar kind, treatment will be accorded by the revised law to coal and by any new law to passengers and cargoes in either direction between the United States and Spain upon an equality with the treatment of coal and passengers and cargoes between Spain and the most favored nation as long as this treaty between the United States and Spain, or Articles 2, 7 and 8 thereof shall remain in force.
The other matter which my Government desires to have arranged at this time relates to the suggestion made to my Government by the Spanish Ambassador at Washington in notes dated February 3, March 10, and March 18, 1919,64 that certain provisions of the Income Tax Laws of the United States and their administration are in violation of Article 2 of the Treaty of July 3, 1902. The Ambassador referred particularly to the provision that citizens or subjects of the two countries shall not be subjected to any taxes or conditions more onerous than those imposed upon the citizens or subjects of the country imposing the tax or condition. The Government of the United States is of the opinion that, under the terms of the 3d paragraph of Article 2, providing that such Article is not intended to constitute any exception from the tax laws made in the United States applying to foreigners in general, it is clear that neither the provisions nor the administration of either of the income tax laws in question constitute a violation of the treaty, since each of these laws and the administration of them treats aliens without discrimination in regard to the country of their citizenship. In connection with the withdrawal of the notice of the termination of the treaty in question, [Page 57] my Government trusts that the Spanish Government will accede to the opinion of the Government of the United States that neither the income tax laws nor their administration constitute any violation of the treaty.
The Government of the United States has, therefore, instructed me, upon the receipt of satisfactory and formal assurances by the Spanish Government in respect of the two matters above set forth, formally to withdraw the notice of the termination of the treaty of July 3, 1902 contained in my note to the Minister of Foreign Affairs of May 8, 1918, except as to Articles 23 and 24, which shall be regarded by both Governments as abrogated, insofar as these Articles are in conflict with the Act of March 4, 1915, (38 Stat. L. 1164), such abrogation being effective from July 1, 1916, while the other provisions of these two Articles, especially those concerning the arrest, detention and imprisonment of deserters from war vessels, shall continue to remain in force. If your Excellency’s Government is willing to accede to the proposals of the United States, I shall be pleased to be so advised at the earliest moment in order that I may thereupon take the necessary steps to withdraw the notice of the termination of the treaty of July 3, 1902, except as to Articles 23 and 24, before May 8 next.”
Upon receipt of a reply to this note, you are instructed to telegraph its contents to the Department and to await further instructions.