Papers Relating to the Foreign Relations of the United States, 1923, Volume I

711.632/14

The Minister in Austria (Washburn) to the Secretary of State

Vienna, December 18, 1923.
[Received January 15, 1924.]

No. 374

Sir: Referring to my despatch No. 361 of the 30th ultimo,⁴ and especially to my despatch No. 293 of September 7, 1923,⁴ in response to Department’s instruction No. 579 of August 3, 1923, enclosing a copy of a proposed Treaty of Friendship, Commerce and Consular Rights between the United States and the Austrian Republic, I now have the honor to submit the following detailed report of the conferences and negotiations at the Foreign Office here, which have been many. I am for the most part contenting myself with comment upon those Articles where amendments have finally been actually suggested. Various other Articles have either in writing or orally been the object of challenge or scrutiny, but the Austrian experts have in the last analysis, as to these provisions, professed themselves as satisfied with the explanations which have been made. I address myself to each Article where changes are proposed, seriatim.

Article I: About this Article the Foreign Office has been especially solicitous. In the first memorandum submitted to me (see my Despatch No. 341 of November 2, 1923)⁴ some concern was expressed concerning the interpretation to be attached to the following clause, being lines 3, 4 and 5 of page 2 of Department’s draft, to-wit: “submitting themselves to all local laws and regulations duly established.” The Austrian Federal Government understood this clause as applying to all matters dealt with in the foregoing stipulations of the paragraph and it was suggested that this intent be made quite clear by substituting, in lieu of the language above quoted, the following, to-wit: “submitting themselves in all matters dealt with in this paragraph to all local laws and regulations duly established.” Upon my pointing out, however, that the following language in Article I beginning with the fifth line from the bottom, page 1 of the draft: “and generally to do anything incidental to or necessary for the enjoyment of any of the foregoing privileges upon the same terms as nationals of the state of residence or as nationals of the nation hereafter to be most favored by it, submitting themselves to all local laws and regulations duly established”, seemed to dispose of this criticism of the Austrian experts, they withdrew their above proposed amendment. I cannot conceive that I am wrong about this, but I should be glad to have the Department confirm my interpretation, in order that I may be authorized to give the desired assurances.

In the above mentioned memorandum, it was further suggested that the Austrian Federal Government would “appreciate” it if the following paragraphs could be added at the end of Article I:

(A) “The nationals of each High Contracting Party, who have their residence in the territories of the other and who should come to be expelled by judgment at law, by police measures legally applied and executed, or by virtue of the police regulations concerning public morals and paupers, shall be received with their families in any case by their native country.

(B) “The High Contracting Parties engage themselves reciprocally to give to indigent nationals of the other who fall ill, become mentally deranged or meet with an accident within their territories the same care, and the same treatment accorded to their own nationals until the repatriation can be effected without prejudice for the person concerned or for others.

(C) “For the costs incurred in such cases and for the burial of dead paupers, no reciprocal compensation shall take place at the charge of State, Province, Municipality or other public funds; merely a private redress being reserved against the person concerned or others who may be under such obligation on application of the competent authority the High Contracting Parties will grant each other reciprocal assistance according to their respective laws in order to assure that these costs be refunded in an equitable measure to those who have incurred them.”

The Austrian experts seem to attach considerable importance to these various paragraphs. I finally said that if the word “deportation” were substituted for “repatriation” in the next to the last line of proposed paragraph B, I could see no serious objection in principle to Paragraphs A and B as proposed, and I would so state to the Department. As to proposed paragraph C, however, it seemed to me to present some difficulties in view of the federal and state powers under our constitutional system, and I stated that I was reluctant to submit it to the Department in the form as drafted. Dr. Richard Schüller (see my Despatch No. 349 of November 16 last),⁵ who has since his return from Geneva been devoting some attention to this particular treaty, saw the force of my objection and rather than permit this paragraph C to delay an agreement is content to strike it out altogether. He so informed me at the end of last week. The following language in paragraph C could, I suppose, without serious objection be retained in some form, if it were thought desirable, it being merely declaratory of the present existing rule as I understand it, to-wit:

“For the costs incurred in such cases and for the burial of dead paupers, no reciprocal compensation should take place at the charge of State, Province, Municipality or other public funds; merely a private redress being reserved against the person concerned or others who may be under such obligation.”

In a second memorandum recently handed to me by the Federal Chancellery, Department for Foreign Affairs, it is further pointed out with respect to Article I:

“The draft contains the stipulation that the nationals of each Party shall be permitted to own, erect or occupy buildings and to lease lands. The fact that no right to acquire landed property is stipulated and the fact that Article IV of the draft provides for the possibility of a national of one of the Contracting Parties being disqualified by the laws of the country to own a property descended to him by inheritance, justify the supposition that the American Government in consideration of the laws existing in several States of the United States do not intend to grant to Austrian citizens by this Treaty the full right of acquiring land in the same way as American citizens. If this should be the case, the Federal Government would be glad to be informed what interpretation the American Government give to the term ‘own buildings’. According to Austrian laws it is impossible to own a building without owning the ground whereon this building is situated, the building being always considered as a pertainance [sic] of the ground.”

I explained that the system of ground rents obtains with us in some States and a system of long term leases in most of the others, virtually assuring ownership of buildings on land so rented or leased. This was satisfactory. Quoting further from this same memorandum:

“The Federal Government would further point out that the right of foreigners to acquire landed property in Austria depends on the respective foreign country granting to Austrian citizens in this respect national treatment. The exclusion of Austrian citizens from the right to acquire land only in some of the States of the United States of America would have the consequence that no American citizen could acquire landed property in Austria. The Federal Government would wish to avoid this consequence and proposed therefore that a stipulation be inserted in Article I by which the Contracting Parties grant to the nationals of the other the right to acquire land as far as foreigners are not excluded from such acquisition by the laws of the country. A stipulation of this kind would have as consequence that Austrian nationals would enjoy in the United States of America with respect to the acquisition of landed property a treatment not less favorable than the nationals of any other country, while American citizens would be admitted to the acquisition of land in Austria without any exception.”

What is here desired is a formula for reciprocity. As I understand from Dr. Schüller, before a local Court would confirm the right of an American citizen to acquire property in Austria, it would have to be satisfied by some such affirmative declaration like the one above proposed as to corresponding rights of Austrian citizens in the United States. I would therefore suggest the insertion in Article I of a paragraph in the following sense:

“The nationals of each High Contracting Party shall be permitted to acquire land upon the same terms as nationals of the most favored nation.”

Finally, with respect to Article I, the Austrian Federal Government proposes to insert in the enumeration of occupations wherein the respective nationals may engage and the purposes for which land may be leased the word “agricultural” just before “commercial” in the sixth line from the bottom on page 1.⁶ I therefore submit this suggestion. If the local law in some of the states makes such an amendment inadvisable, I feel certain that Dr. Schüller would consent to delete it. Otherwise, I would recommend that the proposed amendment be accepted. For purposes of comparison I here give Article I, as in the original draft, and also with the proposed amendments. The alterations are indicated by italics:

[Here follows text of article I as in the original draft of the treaty which is printed on page 400.]

Article I (with alterations)

“The nationals of each of the High Contracting Parties shall be permitted to enter, travel and reside in the territories of the other; to exercise liberty of conscience and freedom of worship; to engage in professional, scientific, religious, philanthropic, manufacturing and commercial work of every kind without interference; to carry on every form of commercial activity which is not forbidden by the local law; to own, erect or lease and occupy appropriate buildings and to lease lands for residential scientific, religious, philanthropic, manufacturing, agricultural, commercial and mortuary purposes; to employ agents of their choice, and generally to do anything incidental to or necessary for the enjoyment of any of the foregoing privileges upon the same terms as nationals of the state of residence or as nationals of the nation hereafter to be most favored by it, submitting themselves to all local laws and regulations duly established.

“The nationals of each High Contracting Party shall he permitted to acquire land upon the same terms as nationals of the most favored nation.”

“The nationals of either High Contracting Party within the territories of the other shall not be subjected to the payment of any internal charges or taxes higher than those that are exacted of and paid by its nationals.

“The nationals of each High Contracting Party shall enjoy freedom of access to the courts of justice of the other on conforming to the local laws, as well for the prosecution as for the defense of their rights, and in all degrees of jurisdiction established by law.

“The nationals of each High Contracting Party shall receive within the territories of the other, upon submitting to conditions imposed upon its nationals, the most constant protection and security for their persons and property, and shall enjoy in this respect that degree of protection that is required by international law. Their property shall not be taken without due process of law and without payment of just compensation.

(A) “The nationals of each High Contracting Party, who have their residence in the territories of the other and who should come to be expelled by judgment at law, by police measures legally applied and executed, or by virtue of the police regulations concerning public morals and paupers, shall be received with their families in any case by their native country.

(B) “The High Contracting Parties engage themselves reciprocally to give to indigent nationals of the other who fall ill, become mentally deranged or meet with an accident within their territories the same care and the same treatment accorded to their own nationals until the deportation can be effected without prejudice for the person concerned or for others.

(Provisionally suggested without recommendation):

[C] “For the costs incurred in such cases and for the burial of dead paupers, no reciprocal compensation shall take place at the charge of State, Province, Municipality or other public funds; merely a private redress being reserved against the person concerned or others who may be under such obligation?”

Article V: The Austrian Federal Government, in order to make the stipulations of this Article concerning the exercise of the right of freedom of worship tally with Austrian legislation, in lieu of the phrase “provided their teachings or practices are not contrary to public morals”, as found in line 13 of Article V on page 4 of draft,⁷ propose to insert the words: “provided their teachings and practices are not inconsistent with public order or public morals, and provided further they conform to all laws and regulations duly established in these territories.” I was disposed to challenge the phrase “public order” until it was pointed out to me that this language was taken from Article 63 of the Treaty of St. Germain. In response to my objection that it was, of course, theoretically possible for the benefits sought to be conferred by this Article to be nullified by local laws and regulations, it was answered that Article 63 of the Treaty of St. Germain was inconsistent with any such policy even if it should be contemplated. Article 63 provides:

“Austria undertakes to assure full and complete protection of life and liberty to all inhabitants of Austria without distinction of birth, nationality, language, race or religion.

“All inhabitants of Austria shall be entitled to the free exercise, whether public or private, of any creed, religion or belief, whose practices are not inconsistent with public order or public morals.”

This provision of the Treaty is incorporated in the present Austrian Constitution by the following language:

(A) “Art. 149. (1) In addition to this law (the federal constitution) the following laws shall, within the meaning of Article 44, paragraph 1, be regarded as constitutional laws with due consideration for the changes necessitated by this law;

. . . . . . . . . . . . . .

“Section V of Part III of the Treaty of St. Germain, of September 10, 1919, State Law Gazette, 1920, No. 303.”

(See The New Constitutions of Europe, page 291, by Howard Lee McBain and Lindsay Rogers, Doubleday, Page & Company, 1922.)

Relevant Austrian laws and regulations which have been called to my attention are the law of May 25, 1868, concerning marriage laws for Catholics; the law of April 9, 1870, concerning marriages of persons who do not belong to any legally recognized church or religious society; law of May 25, 1868, concerning the relation of schools towards the church. The chief law cited in this connection is the State Fundamental Law of April 21, 1867, which contains, inter alia, the following provisions:

Article 14. “Full freedom of religion and conscience is guaranteed to everyone.

“The enjoyment of civil and political rights is independent of religious profession; political duties, however, shall not be derogated from by religious profession.

“No one can be forced to perform a religious action or to participate in a religious ceremony, insofar as he is not subject to the authority of another person duly authorized by law.

Article 15. “Each legally recognized church and religious society has the right to common and public exercise of religion, settles and manages its internal affairs independently; remains in possession and enjoyment of its institutions, foundations and funds designated for religious purposes, education and charity, but, like any other society, is subject to the general laws of the State.

Article 16. “Adherents of a religious profession, not recognized by law, are allowed to exercise their religion at home, so far as this is not against the law nor injurious to morality.

Article 17. “Science and its teaching is free. Any citizen who has lawfully shown his qualifications is entitled to establish schools and educational institutions and to give lessons there.

“Teaching at home is not subject to such restriction.

“Religious teaching in the schools is the duty of competent church or religious society.

“The State has the right of supreme management and control with regard to the entire teaching and educational system.”

Finally, with respect to this Article the Austrian Federal Government proposed to substitute the word “established” for “reasonable”, as found in line 21 of Article V on page 4.⁸ I very early sensed that the Austrian experts attached much importance to these provisions and I am certain that the present prelate Chancellor is especially solicitous about Article V. In view of the above mentioned Article 63 of the Treaty of St. Germain and the present state of local law and practice, it has not seemed to me that the proposed alterations can be deemed as vital from our standpoint. The Austrian Government proposed to cancel the succeeding Article VI wholly, but upon this point I have been obdurate. The proposed disposition of Article V is more or less coupled with the proposed disposition of Article VI.

Article V as found in the original draft and with the proposed amendments follows:

[Here follows text of article V as in the original draft treaty printed on page 402.]

Article V. (with proposed amendments)

“The nationals of each of the High Contracting Parties in the exercise of the right of freedom of worship, within the territories of the other, as hereinabove provided, may, without annoyance or molestation of any kind by reason of their religious belief or otherwise, conduct services either within their own houses or within any appropriate buildings which they may be at liberty to erect and maintain in convenient situations provided their teachings and practices are not inconsistent with public order or public morals and provided further they conform to all laws and regulations duly established in these territories; and they may also be permitted to bury their dead according to their religious customs in suitable and convenient places established and maintained for the purpose, subject to the established mortuary and sanitary laws and regulations of the place of burial.”

Article VI: With respect to this article the attitude of the Austrian Federal Government is shown in the following excerpt:

“The Government of the United States are certainly aware that there exists a certain diversity between the American and the Austrian point of view with respect to the legal status of persons who have declared their intention to adopt another country’s nationality. According to the Austrian law Austrian citizens who have taken out their ‘first papers’ in the United States remain Austrian citizens, because these first papers do not yet confer upon them the American citizenship. The Federal Government find it difficult to confirm by a treaty the different principles of the United States Government and the practice deriving therefrom. They would therefore propose that Article VI be cancelled.”

As above stated, I have consistently taken strong ground against the cancellation of this Article, pointing out with some detail the various reasons why the Government of the United States deemed this provision important as reserving to it a necessary belligerent right. (See my comments with respect to this Article in my despatch No. 293 of September 7, 1923⁹) I further found when I got below the surface that the chief obstacle in the minds of the Austrian experts against the incorporation of such an Article lay in the fact that the Austrian Government would thereby expose itself to the charge of an unneutral attitude towards friendly nationals with whom we might happen to be at war if it should, by formal treaty stipulation, recognize our right to draft for compulsory military service Austrian nationals, even though the right to draft was conditional. Although it was felt that the reciprocal benefits flowing from such an arrangement as is proposed in Article VI were very unequal, the reasons for the American desire to have such a provision were fully appreciated. I was specifically asked whether any other country had agreed to incorporate any such provision, to which I replied that we were just now inaugurating negotiations with various Powers, with the outcome of which I was not acquainted. Finally, the Austrian Government agreed, either by protocol or exchange of notes at the time of signing the treaty, to waive its right to object to the drafting of Austrian nationals for compulsory military service upon the conditions and within the limitations prescribed by Article VI. This, of course, will eliminate this Article from the proposed treaty, but it will secure to us the substance of what we here desire. I trust the Department will approve of this arrangement. Dr. Schüller has agreed to collaborate with me in drawing up a draft of a protocol or notes to be exchanged, for the approval of our respective Governments, and I am sure he will presently do so. I can cable this draft later to the Department for its consideration if the time does not permit its transmission by post.

Article VII: The Austrian Federal Government, of course, welcomes the phraseology of the most favored nation provisions as found in this Article. It has no objection to the exceptions carved out in the last paragraph. It proposed, however, that a similar clause be inserted with regard to the special arrangement that might be made between Austria on one side and Czechoslovakia and Hungary on the other under the provisions of Article 222 of the Treaty of St. Germain. The following clause corresponding to the text of Article I, paragraph 2 of the commercial treaty concluded between Austria and France on July 22, 1923, was proposed:

“The United States renounce to claim the special advantages that Austria might grant with respect to custom duties by application of Article 222 of the Treaty of St. Germain, as comprised in Article II of the treaty between the United States and Austria, concluded on August 24th, 1921.”¹⁰

The amendment suggested by me at the end of Article VII is, however, wholly satisfactory to the Austrian Federal Government, to-wit:

“Likewise this article shall not apply to arrangements which may be made by the Austrian Government with the Governments of Hungary, or of the Czechoslovak State within the meaning of Article 222 of the Treaty of St. Germain anything in Article 2 of the Treaty between the United States and Austria establishing Friendly Relations, concluded August 24, 1921, to the contrary notwithstanding.”

This provision, or one similar to it, would seem to be unobjectionable under all the circumstances and I therefore recommend its incorporation.

Articles VIII and XIII: The Austrian experts direct attention to the fact that Article VIII stipulates that the nationals and merchandise of each Party shall receive national treatment with regard to “transit duties” whereas the provisions of Article XIII state that “persons and goods in transit shall not be subjected to any transit duty”. There would appear to be a certain inconsistency in these two provisions and the “Federal Government would be grateful for an exact interpretation of the comparative meaning of these two different formulas”.

Upon this point I ask instructions.

The Austrian Government has no special objection to both stipulations, but in accepting the provision that persons in transit shall not be subjected to any transit duty it interprets the words “transit duty” as not comprising transit visa certificates and the charges collected for the same. Bearing this interpretation in mind, there is, under the Austrian law, no transit duty upon persons and none upon merchandise, except upon monopolies such as tobacco, salt and explosives.

Article XI: The Austrian Federal Government understands that under our municipal law licenses may be required, but it desires to point out that foreign commercial travelers need no license in Austria and that it is sufficient for them to have a certificate issued by the competent authority of either country attesting their character as commercial travelers (Legitimationskarte). No visa of this certificate by an Austrian consul is required. The Austrian experts are prepared, however, to adopt the text as set forth in the draft, except as hereinafter pointed out, adding merely that under the present regulations it is not necessary for American commercial travelers to obtain a visa or license.

The Austrian Trade Law (Gewerbeordnung) is regarded as almost fundamental or organic and it is represented that in order to bring Article XI into conformity with this law two amendments are necessary. I quote:

“According to the Austrian trade-law (Gewerbeordnung #59) commercial travelers are only allowed to take orders for merchandise from merchants, industrials, tradesmen and in general, such persons in whose business articles of the offered kind are employed; they may, for this purpose carry samples, but no merchandise to be sold directly. The stipulation contained in letter c) of the draft would therefore be contrary to Austrian legislation; the Federal Government hope for this reason that the Government of the United States will consent to cancel this paragraph”.

In lieu of Article XI, Section G, the Austrian Government desires to retain only so much of the text of the original draft as is embraced in the following words, to-wit: “Salesmen who vend directly to the consumer shall not be considered as commercial travelers”.

The explanation for this lies in the fact that peddling depends, according to Austrian law, on a special personal concession. Under the Austrian Constitution provincial governments may regulate and prohibit peddling. As a matter of policy, foreigners are not given special personal concessions to peddle because “of our neighbors in the Succession States”. From the Austrian standpoint, therefore, peddlers must be excluded from those who enjoy favored nation privileges and the Federal Government represents itself as unable to make any contractual obligations concerning the treatment of peddlers.

As amended, therefore, Section C, would be eliminated altogether, which would, of course, necessitate a relettering of the sections and in lieu of present section G, we would have the following: “Salesmen who vend directly to the consumer shall not be considered commercial travelers.”

Article XII: The Austrian Federal Government has no objection to Article XII, section B, as it now stands, if it be understood that the cancellation of the bond is effected in Austria at the port or place of reexportation.

With respect to Article XII, Section C, it is pointed out that according to the Austrian Trade Law above mentioned (Gewerbeordnung), it is forbidden to all commercial travelers, whether Austrian or foreign, to deal with private customers; they may only deal with revenders or with business firms. Accordingly, it is proposed with respect to this section, to strike out everything after the semicolon in line 5 of section C, page 11¹¹ of the draft, so as to read:

“Article XII, Section C. It is understood that the traveler will not engage in the sale of other articles than those embraced by his line of business”.

I am informed that the principles laid down in the proposed amendments to Articles XI and XII as above noted are embodied in other commercial treaties concluded by Austria, inter alia, those with Italy and France of April 28 and June 22, 1923, respectively.

Article XV: The gravamen of the criticism with respect to this Article lies in the following—that the phrase beginning in line 5 of Article XV¹² “offences locally designated as crimes and subjecting the individual guilty thereof to punishment as a criminal” is broad enough to include all grades of public offences which in the common law are classified as treason, felony and misdemeanor. The term “crimes” was also contained in Article II of the Consular Convention between the United States of America and Austria-Hungary of July 7, 1870. In the German text of this Convention the term has been rendered “Verbrechen”. According to Austrian law “Verbrechen” is a punishable action which in contrast with “Vergehen” or “Uebertretungen” is threatened with prison (“Kerkerstrafe” instead of “arrest”). I infer from this that “Vergehen or Uebertretungen” is punishable with fine and not with imprisonment. The Austrian experts are apprehensive that the English word “crimes” does not correspond to the Austrian term “Verbrechen”, which imports something more closely corresponding to a felony. They are fearful that the use of the word “crimes” in Article XV might have the consequence that Austrian consular officials in the United States could be prosecuted for relatively small offences or misdemeanors involving imprisonment, (for example, overspeeding with an automobile or an offence against the sanitary laws such as expectorating in the public highways), whereas American consular officers in Austria enjoy a much greater immunity. “As the Federal Government suppose that this is not the intention of the American Government, they propose to substitute in Article XV for the words “crimes and criminals” the terms “felonious crimes and felon” which they consider a more adequate rendering of the Austrian term ‘Verbrechen’ and ‘Verbrecher’.”

The Austrian Federal Government further points out that according to paragraph 3 of Article XV, “Consular Officers shall be subject to the jurisdiction of the courts in the state which receives them in civil cases” and interprets this stipulation as meaning that the receiving state is the United States of America and not the respective state of the Union wherein the Consular officer may reside.

The Austrian Federal Government in this connection draws attention to Article III, section 2, paragraph 2 of our Constitution providing “that in all cases affecting ambassadors, other public ministers and consuls and those in which a state shall be party, the Supreme Court shall have original jurisdiction.” To this I have replied that this provision has been construed not to mean exclusive jurisdiction so as to prevent the vesting of power in any such case in inferior Federal Courts (U.S. v. Ravara, 2 Dall 297). It is my understanding, however, that a consul can be impleaded only in a Federal Court and that state courts as distinguished from Federal Courts cannot take cognizance of offences charged against him. (Kosloff’s Case, and Mr. Fish, Secretary of State, to Count de Colobiano, Moore’s International Law Digest, Vol. 5, Pgs. 65 and 74 respectively).

It occurs to me in this connection that a United States Attorney would hardly be likely to proceed criminally against a Consul in cases involving misdemeanors without explicit directions from the Attorney General and it is possible that the Austrian Federal Government might be satisfied with this assurance. Upon this point I ask for instructions. As I gather from Dr. Schüller, aside from the apprehension that Austrian consular officers may be prosecuted for petty offences the main thought here is to be quite sure that the treaty does not contemplate any change in the existing procedure. Upon this point I have felt quite at liberty to reassure him.

Article XVI: The Austrian Federal Government interprets the language at the beginning of this article “consular officers including employees in a consulate nationals of the state by which they are appointed other than those engaged in private occupations for gain within the state where they exercise their functions,” et cetera, as relating to “consuls de carrière” as opposed to honorary consuls. To this I replied that under our system there were numerous consular officers, vice consuls and employees who are American nationals and who are not “de carrière” who would undoubtedly come within the purview of this language. This explanation is satisfactory. The desire of the Austrian Government is to avoid being obliged to accord favored nation treatment to nationals of the neighboring or Succession States who seek to obtain commissions as honorary consuls or to exercise consular functions without compensation for the purpose of securing tax exemption.

Furthermore, the Federal Government proposes to strike out the clause beginning in line 13, Article XVI,¹³ to-wit: “or income derived from property of any kind situated or belonging within” on the ground that these words are too general and vague. I quote in this connection from the first memorandum submitted to me:

“Should the Government of the United States attach importance to inserting a clause concerning the taxing of income other than that derived from immovable property (and, of course, the income derived from the commercial activity of honorary consular officers) the Federal Government would propose to adopt the following wording:

“… shall be exempt from all taxes, National, State, Provincial and Municipal, levied upon their persons or upon their property, except taxes levied on account of income derived from any property situated within the territories of the State within which they exercise their functions, according to the laws of that State, upon all foreigners, who have no domicile or residence within that State.”

The Federal Government also proposed to substitute for the words “for governmental purposes by that owner” as found in the 7th line from the bottom of Article XVI (2nd paragraph)¹⁴ the words “for purposes of the diplomatic representation of that Party, shall be … etc.” I pointed out that the paragraph so amended had no logical place in an article dealing with consular exemptions. Dr. Schüller promptly agreed that this was so and said that he would be content if the word “governmental” were eliminated and the words “diplomatic or consular” inserted in lieu thereof, so as to read “for diplomatic or consular purposes.” He thought the word “governmental” much too broad. A building owned by the Soviets and used for industrial purposes would, from the Soviet standpoint be “used exclusively for governmental purposes.”

As amended, therefore, in the first paragraph of Article XVI the clause beginning in line 13,¹³ “or income derived from property of any kind situated or belonging within” would either be suppressed altogether, or in lieu thereof the paragraph would be altered so as to read:

“Consular officers, including employees in a consulate nationals of the State by which they are appointed other than those engaged in private occupations for gain within the State where they exercise their functions shall be exempt from all taxes, National, State, Provincial and Municipal, levied upon their persons or upon their property, except taxes levied on account of income derived from any property situated within the territories of the State within which they exercise their functions, according to the laws of that State, upon all foreigners, who have no domicile or residence within that State. All consular officers and employees, nationals of the State appointing them shall be exempt from the payment of taxes on the salary, fees or wages received by them in compensation for their consular services.”

The second paragraph would read, as amended:

“Lands and buildings situated in the territories of either High Contracting Party, of which the other High Contracting Party is the legal or equitable owner and which are used exclusively for diplomatic and consular purposes by that owner, shall be exempt from taxation of every kind, National, State, Provincial and Municipal, other than assessments levied for services or local public improvements by which the premises are benefited.”

Article XVII: The Austrian Federal Government in this connection points out that this Article of the draft:

“stipulates the right for consular officers to place over the outer door of the respective office the arms of their State with an appropriate inscription designating the official character of the office, to hoist the flag of their country on their offices and over any boat or vessel employed in the exercise of the consular function. The Federal Government would appreciate it very much if the American Government would consent to add a clause by which consular titles, arms and flags are protected against illegal use. The Government of the United States are certainly aware of the fact that foreign consular officers in the United States have often been obliged to apply for the aid of the local Authorities against such illegal use, committed, it is true, chiefly by emigrated conationals of the consuls, and that such aid was sometimes denied to them in some States for the lack of legal dispositions to this effect. The Federal Government wish to point out that the laws existing in Austria always give the possibility to proceed against an illegal use of the titles, arms or flags of an American consulate. They hope therefore that the American Government will consent to create a conventional basis for a reciprocal protection of Austrian consular titles, arms and flags in the United States.”

I am not informed and I have not the means at hand of determining with certainty whether our existing Federal Statutes can be construed so as to make the illegal use of Austrian consular titles, arms and flags in the United States an offense. If not, some affirmative legislation would, of course, be necessary to give force and effect to a treaty stipulation of this character. I do not think vital importance is attached to this criticism and, if existing legislation be inadequate, I am of the opinion, which I have been at pains to confirm, that an assurance that such legislation would be recommended would be satisfactory, for the request seems to be wholly reasonable. I have therefore asked for instructions upon this point.

Article XX: As to this Article it is pointed out that paragraph 1:

“obliges the local authorities to inform under certain circumstances the nearest consular officer of the other Contracting Party of the fact of the death of a national. According to the view of the Federal Government it would be in the interest of the nationals of both Parties, if such an obligation were established also for the case that a national were declared by the local authorities to be insane or to be otherwise incompetent. The Federal Government propose therefore to add to paragraph 1 of Article XX the following sentence: ‘In the event a national of either of the High Contracting Parties should be declared incompetent or insane like notice should be given to the nearest consular officer?’”

The above quoted alteration, to-wit, “in the event a national of either of the High Contracting Parties should be declared incompetent or insane like notice should be given to the nearest consular officer” would, therefore, be inserted after the word “interested” in line 15 of the first paragraph of Article XX.¹⁶

This Article especially has given the Foreign Office here some concern. See in this connection my before-mentioned despatch No. 361.¹⁷ The Austrian Consular Representatives in the United States were instructed several weeks ago to report upon this provision particularly, and Dr. Grünberger tells me that a reply should be received before the end of the year. They were instructed to reduce any objections they may have to a minimum. If any further alterations are here proposed I will advise the Department promptly, but the Foreign Office is optimistic that this will not result in any material delay. The Consular provisions of the treaty are, I understand, the only outstanding features upon which the Foreign Office reserves the right to offer further suggestions.

Article XXII: With respect to this article:

“The Federal Government are of opinion that the immunities of consuls with respect to custom duties, as well as in other respects, could advantageously be resumed in the following text:

‘On condition of reciprocity, the Consular officers of either of the High Contracting Parties shall enjoy in the territories of the other all the privileges, rights and immunities, which the Consular officers of any other country enjoy or may enjoy.

‘It is understood that, always on condition of reciprocity, the privileges, rights and immunities extended to the consular officers of one of the Contracting Parties within the territories of the other, shall never depass the privileges, rights and immunities granted by the former to the Consular officers of the latter Party.’

[“]In case the Government of the United States should attach importance to maintaining Article XXII in the form inserted in the draft, the Federal Government would be prepared to adopt it, provided the following amendments be introduced:

‘…. the privilege of entry free of duty of their baggage and their used transmigration-goods accompanying the officer to his post;’

“In explanation of this proposed text the Federal Government wish to point out that the Austrian law on custom-duties provides for an immunity of custom duties only for escutcheons, flags, arms, official stamps and official prints of the Consulates, while consular officers and their suite enjoy an immunity for baggage and transmigration-goods only according to the general provisions of the law in this respect.”

The Austrian experts in lieu of the language proposed by them, to-wit: “the privilege of entry free of duty of their baggage and their used transmigration goods accompanying the officer to his post” agreed to accept a substitute drafted by me. Article XXII, line 13,¹⁸ strike out after the word “duty” the words “of their baggage and all other personal property whether accompanying the officer to his post or imported at any time during his incumbency thereof,” and insert the following: “their personal or household effects actually in use which accompany such consular officers, their families or suites or which arrive shortly thereafter;”

The words “household effects” I borrowed from Par. 1531 of the Tariff Act of 1922, where it is employed in a comprehensive sense. Coupled with the word “personal” (“personal or household effects”) the privilege of free entry here guaranteed would appear to be sufficiently broad. The Federal Government first desired, as it will be perceived, that such effects should accompany the officer to his post, but is content to accept the modification contained in the words “which arrive shortly thereafter.” I recommend, therefore, that the amendment above proposed be accepted. In the form as amended, therefore, the first paragraph of Article XXII will read:

“Each of the High Contracting Parties agrees to permit the entry free of all duty and without examination of any kind, of all furniture, equipment and supplies intended for official use in the consular offices of the other, and to extend to such consular officers of the other and their families and suites as are its nationals, the privilege of entry free of duty their personal or household effects actually in use which accompany such consular officers, their families or suites which arrive shortly thereafter, provided, nevertheless, that no article, the importation of which is prohibited by the law of either of the High Contracting Parties, may be brought into its territories.”

There remains for brief discussion at this time the question of the bearing of the system of import licenses now in force in Austria upon such a treaty as is here contemplated. I have asked both the Consul and the Trade Commissioner to supply me with all their available information upon this subject. This system may potentially affect many commodities. In practice it pinches American interests mainly as regards automobiles. See in this connection my despatch No. 363, of November 30, 1923.¹⁹ I am assured at the Foreign Office that this system of import licenses or prohibitions is a temporary weapon mainly employed in retaliation against the hostile tariff legislation of the Succession States and that it will be laid aside with the enactment of a new tariff shortly to be introduced to supplant the present antiquated one now on the statute books. The possibility of inflicting great if not irreparable damage upon the American automobile export trade with Austria by means of such a device is of course very great and pending the receipt of the Departmental instructions in response to my above mentioned despatch No. 363, the matter is giving me some concern. I am not, however, especially disturbed about our failure to receive most favored nation treatment. Both Dr. Grünberger, who was formerly a Sektionschef in the Department of Commerce, and Dr. Schüller have assured me emphatically that they will intervene actively in our behalf and at their suggestion I am submitting a detailed list of applications for import licenses which have either been rejected or which are now pending and unacted upon. The prospects of trade expansion in this direction with Austria’s economic recovery seem for the moment to be very bright, judging from what the various agents tell me and I am not sure that being accorded the largest contingent granted to any other country will be adequate. The Trade Adviser has gone so far as to intimate that no treaty which does not guarantee or permit the unrestricted importation of automobiles and commodities generally will “satisfy the Department of Commerce.” Nevertheless, I cannot overlook that our present favored nation policy as embodied in Article VII seems clearly to recognize by implication the right of each of the Contracting Parties to impose conditions and prohibitions on the importation of any article providing they be not discriminatory. Compare second paragraph of Article VII in this connection, to-wit:

“Each of the High Contracting Parties binds itself unconditionally to impose no higher or other duties or conditions and no prohibition on the importation of any article, the growth, produce or manufacture, of the territories of the other than are or shall be imposed on the importation of any like article, the growth, produce or manufacture of any other foreign country.”

I am waiting to see what happens to the pending applications and also for official instructions already requested, before taking this matter up in further detail with the Department.

The above review seems rather formidable at first glance, but I think upon analysis it will be found to present few questions of difficulty and I should be glad to receive the Department’s conclusions and instructions in the premises as promptly as may be conveniently possible. I am sure the official disposition here is to push the matter to a conclusion with all convenient speed. I note that the Treaty with Germany has already been concluded. Germany’s unilateral favored nation obligations in the Treaty of Versailles extend over a period of five years. Austria’s corresponding obligations were for three years and the time limit has expired. Austria’s situation is therefore somewhat different and it was unavoidable that the draft submitted by me to the Foreign Office in September last should receive more or less deliberate scrutiny. Moreover, Dr. Schüller’s absence in Geneva and the supposed necessity of communicating with the Austrian consular officers in the United States have inevitably contributed to delay.

Just as I am concluding this despatch I am advised by Dr. Schüller that he is now definitely prepared to waive in toto Clause C at the end of Article I referred to on pages 3 and 4 of this despatch,²⁰ so that the Clause provisionally suggested on page 8²¹ may, if the Department elects, be ignored.

I have [etc.]

Albert H. Washburn

4. Not printed.
4. Not printed.
4. Not printed.
5. Not printed.
6. Ante, p. 400 (9th line).
7. Ante, p. 402 (7th line).
8. Ante, p. 402 (10th line).
9. Not printed.
10. Foreign Relations, 1921, vol. i, p. 274.
11. Ante, p. 407 (2d line).
12. Ante, p. 408 (3d line).
13. Ante, p. 409 (7th line).
14. Ante, p. 409 (3d line).
13. Ante, p. 409 (7th line).
16. Ante, p. 411 (7th line).
17. Not printed.
18. Ante, p. 412 (6th line).
19. Not printed.
20. See pp. 414–415.
21. See p. 417.