711.5221/21: Telegram
The Ambassador in Spain (Willard) to the Acting Secretary of State
2635. Department’s 2156, May 6, 6 p.m. Embassy complied with instructions therein contained in note to Foreign Office under date of May 8th delivered upon said date and to which Foreign Office has replied under the date of May 9th as follows:
“Excellency: In your kind note of yesterday, withdrawing in the name of your Government the notice of the termination of the Treaty of Friendship and General Relations between Spain and the United States, of July 3rd, 1902, Your Excellency asks me to notify you of the formal acceptance by the Government of His Catholic Majesty of said withdrawal, adding that said acceptance shall be considered ‘as [an] acceptance of the conditions upon which it is made’ such conditions are summed up in the above mentioned note of Your Excellency and in order to avoid any possible misunderstanding I take the liberty of mentioning them in detail and of making suitable statements regarding each one of them.
Above all Your Excellency says that articles 23 and 24 ‘shall be regarded by both Governments as abrogated, in so far as these articles are in conflict with the act of the 4th of March, 1915 (38 [Page 62] statutes 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 in force.’
Concerning this point I have already accepted in the name of His Majesty’s Government, by declaring in my note of the 3d instant that ‘articles 23 and 24 will be considered as repealed in so far as they are in contradiction with the American Seamen Act of March 4th, 1915, although the other provisions of those two articles, especially those which refer to the detention and imprisonment of deserters from war vessels, shall continue in force. It is unnecessary to say—I added—and Your Excellency will find it entirely just, that reciprocally the consular officers of the United States in Spain will not be able to exercise the faculties [powers] of which, by virtue of the partial revocation of the above mentioned articles 23 and 24, the consuls of Spain in the United States are deprived.’
Your Excellency says ‘The withdrawal of the notice of the termination of this treaty being expressly upon the condition that in the event that the Spanish Government shall revive the transport tax on coal imposed by the law of July 20, 1900,68 or shall enact new legislation of similar kind, treatment will be accorded by 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.’ With respect to this I answered Your Excellency: ‘Meanwhile, treaty between Spain and the United States and its articles 2, 7 and 8 remain in force and on the supposition that in this period the Royal Order of April 7th, 1915, is repealed, the treatment of coals and cokes proceeding from the United States will be based on the equality with the treatment between Spain and the most favored nation.’
In fact, His Majesty’s Government which by above mentioned Royal Order suppressed the transport tax upon coals and cokes, considers itself in a position not to reestablish tax except upon acknowledged conditions, one of which might be the equality of treatment, upon [from] this point of view, between articles from the United States and those of other countries, which before were more favored in the tariff. The attitude of His Majesty’s Government upon this point will be appreciated by the Government of the United States which since the year 1916 has been requesting a decision in this sense. Furthermore I must inform Your Excellency that, by virtue of article 18 of the so-called Law of Maritime Communications of June 14, 1909, and the Royal Decree of January 28, 1910, issued by the Ministry of Fomento, there are already exempted from payment of transport tax on certain conditions several articles, among which are included cotton, petroleum, hoops and lime phosphates. But as regards the obligation that any new law should grant to passengers and cargoes in each direction between the United States and Spain [Page 63] the equality of treatment with passengers and cargoes of the most favored nation, Your Excellency will understand that the Government of His Majesty has no faculties [power] to contract it, because the particular matter to which I refer, that is, the transport tax, is regulated by a law that has not been repealed, and whose annexed tariffs are based upon the distinction of navigation between classes, the last of which concerns all articles outside of Europe. The obligation of the acceptance of the above mentioned point should constitute a fundamental amendment to said tax, and Your Excellency will understand—I repeat—that the Government of His Majesty is not prepared for such an important change which must always require the intervention of the Cortez and which would exceed the advantages extended to other countries of America and to extra-European countries in general.
Since the beginning I have supposed that the Government of Your Excellency recognized this and did not attribute to the matter a decisive influence upon the present negotiation, because the note of Your Embassy of April 11th in expressing the wishes resolved [sic] at this moment ‘from [two?] other matters’ which had been the subject of correspondence between both Governments alluded to the ‘differential treatment by the Spanish Government of importations of American coal and coke by reason of the Spanish transport tax.’ After recalling that this treatment had been suppressed since April 7th, 1915, it added that ‘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.’
Lastly it is said in Your Excellency’s note that the withdrawal of the denunciation is made ‘upon the further express condition that neither the income tax laws of the United States nor their administration constitute any violation of the provisions of this treaty.’ To which I have answered taking up the reasons set forth by Your Excellency in your note of April 11: ‘It will be understood that in conformity with the terms of paragraph 3 of article 2 of the treaty, said article will not be construed as annulling the laws of either of the two contracting countries, but that they shall be applicable to all foreigners in general, and therefore, in the concrete case of the laws imposed on incomes in the United States and its regulations up to the present time, the Government of His Majesty will not insist in sustaining that they are contrary to the treaty.[’]
By the terms of the present note I consider myself informed, in the name of His Majesty’s Government, of the withdrawal of the termination of the United States of the Treaty of Friendship and General Relations between both countries of July 3, 1902, which will continue in force upon the expressed conditions, as if the denunciation had never been made; that is to say, that as the treaty ended its first and normal period of force on the 14th of April 1913, now it has to continue in force for twelve months after one of either of the contracting parties notifies the other of its intention to amend it or to terminate it.
[Page 64]If Your Excellency has anything to remark in connection with the premises, I should appreciate it if you would inform me with all possible urgency; in [the meantime?] I avail myself of the opportunity to renew to Your Excellency the assurances of my highest considerations.”