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

800.01 M 31/132a: Telegram

The Secretary of State to the Ambassador in Great Britain ( Harvey )

Washington , July 24, 1922—2 p.m.

218. Department’s 448, August 4, 1921, 8 p.m.²³

Please present to the Foreign Office a note in the sense of the following:²⁴

“In my memorandum of August 24, 1921, on the subject of mandates, I included pursuant to the instructions of my Government the following suggestions regarding the draft mandates for the so called C mandate territories other than Yap:²⁵

(a) That article V should be changed so as to embrace nationals of the United States and that it would be preferable, to avoid ambiguity as to educational and charitable activities of missionaries, to have in this article the same provision as in article VIII of the British B mandate for German East Africa;

(b) That it was desired that the mandatories should guarantee to the United States most-favored-nation treatment in all C mandate territories, reserving however the present special treaty rights of the United States with respect to German Samoa;

(c) That there should be a provision similar to that proposed in the other forms of mandates prohibiting monopolistic concessions or the monopolizing of natural resources by the mandatory;

(d) That, as in other cases, any modification of the mandate should be subject to the assent of the United States.

In the communications which my Government has thus far received on the subject of mandates, no direct references have been made to the above points. Your Lordship set forth, however, in notes of December 22 and December 29, 1931,²⁶ that it has never been the intention of His Majesty’s Government to deprive the United States of any of the rights and privileges to which it is entitled as a result of the common victory over Germany, and in particular that His Majesty’s Government disclaim any intention to discriminate against United States nationals and companies. In view of these cordial assurances, my Government has assumed that there would be no disposition to deny to the United States in the C mandate territories any guarantees which may be appropriate for the safeguarding of the present or prospective American interests in those territories, and in particular that no action would be taken prior to the assent of the United States to the mandates, which would be discriminatory or otherwise contrary to the spirit of the expected guarantees.

Nevertheless, certain circumstances and action have recently been brought to the attention of my Government, which in the absence of correspondence on the subject of C mandates since my memorandum of August 24 last, appear to my Government to justify an immediate inquiry.

The circumstances and action to which reference is made may be briefly summarized as follows:

1. In my memorandum of August 24, I stated that the Government of the United States had protested against the discriminatory tariff imposed by New Zealand in violation of the treaty concluded at Washington, December 2, 1899.²⁷ Subsequently, further representations were made and the Embassy was informed some weeks ago that the matter was still under discussion with the New Zealand Government. In the meantime, however, there has been, so far as my Government is informed, no suspension or repeal of the discriminatory duties. Although the treaty rights of the United States are in this instance controlling, my Government believes that, apart from these rights, there should be, prior to the assent of the United States to the mandate, no discrimination of any kind in the mandate territory against the citizens or commerce of the United States.

2. Somewhat similar action appears to have been taken with respect to former German South West Africa. It is understood that an act to amend the tariffs of the Union of South Africa, published in the South African Official Gazette of May 30, 1921, and reported to have come into force June 7, 1921, contemplates that this mandate territory should be regarded for customs and excise purposes as a part of the Union, which, it is understood, accords certain tariff preferences to other parts of the British Empire. The result of this legislation would be discrimination against the United States. If it is the purpose of the Union of South Africa to keep legislation of this character in force, the Government of the United States feels that it must request for its goods imported into South West Africa any benefits or preferences accorded to any other similar goods.

3. The Governor General of the Australian Commonwealth on February 22, 1922, proclaimed certain amendments to the regulations under which the Treaty of Peace (Germany) Act 1919–1920, providing for the sale of enemy property and apparently applicable to such property in the mandate territory or New Guinea [sic]. The amended regulations contain the following provisions:

‘The Custodian shall not sell any property to any purchaser other than to

(a). a person who is an Australian soldier within the meaning of the Australian Soldiers’ Repatriation Act 1917–1920, or who is a natural-born British subject;

(b) a company in which the majority of the shares are held by persons who are natural-born British subjects and of which the Articles of Association contain a provision prohibiting the sale or transfer of shares in the company to persons who are not natural-born British subjects;

(c) a company registered in any part of His Majesty’s Dominions, in which the majority of the shares is held by persons who are natural-born British subjects and which is approved by the Attorney-General.’

The effect of such provisions would be to discriminate against American nationals and companies who might desire to participate in the purchase of the property concerned.

4. It appears that on November 22, 1921, an official statement was made in the Australian Parliament regarding oil deposits in mandate New Guinea indicating, if the statement has been correctly transmitted to my Government, that it was at that time the purpose to reserve all such deposits for the exclusive use of the authorities administering the mandate. Previous to this, the feeling was expressed in the Australian Parliament that under class C mandates, such as that of New Guinea, the mandatory might impose whatever restriction it pleased upon both men and goods. Statements of this tenor are less disturbing if it is assumed, as my Government has been inclined to do, that the views of the Government of the United States regarding mandates and the acceptance in general of these views by His Majesty’s Government had not at that time been made known to the officials of the Commonwealth. My Government has not been made aware, however, of any subsequent correction of these statements or of any further announcements of a more reassuring nature; and American interests are left in uncertainty regarding the possibility of participation in certain important branches of economic activity in New Guinea.

5. In previous correspondence, I have called Your Lordship’s attention to the agreement by the Japanese Government to furnish a duplicate, not a copy, of its annual report which is to be submitted to the League of Nations on the administration of the mandate territories. A provision to this effect is incorporated in the treaty between the United States and Japan relating to the mandated islands in the Pacific north of the Equator, and His Majesty’s Government has agreed to the insertion of a similar provision in the proposed treaty relating to Palestine. It is assumed accordingly that there will be no objection to following a similar procedure with regard to the reports on the administration of the C mandate territories administered by the Union of South Africa, the Commonwealth of Australia and New Zealand. Pending the conclusion of a definite agreement regarding all of the C mandates, my Government would be glad to receive duplicates of the reports submitted to the League of Nations on the administration of those territories.

It is hoped that His Majesty’s Government will find it possible at an early date to convey to this Government the desired assurances on the points raised by my Government with regard to C mandates and embodied in my memorandum of August 24, and that, until an appropriate treaty is concluded relating to these territories, no action will be taken of a monopolistic character or discriminating against American nationals and companies or otherwise prejudicial to American rights and interests.”

Hughes

23. Foreign Relations, 1921, vol. ii, p. 106.
24. Note addressed to the Foreign Office, July 26.
25. For texts of draft mandates, see Foreign Relations, 1921, vol. i, p. 118.
26. ibid., vol. ii, pp. 111 and 115.
27. Malloy, Treaties, 1776–1909, vol. ii, p. 1595.