Papers Relating to the Foreign Relations of the United States, 1927, Volume I

711.252/–

The Secretary of State to the Ambassador in Chile ( Collier )

Washington , August 19, 1927 .

No. 765

Sir: This Government has, as you are aware, entered upon the policy of negotiating with other countries general treaties of friendship, commerce and consular rights, of which the central principle in respect of commerce is an unconditional most-favored-nation clause governing customs and related matters.¹ This policy was inaugurated pursuant to the principles underlying Section 317 of the Tariff Act of 1922;² it seeks assurances that equality of treatment for American commerce will be maintained in all countries. Besides the provisions relating to commerce, those treaties include provisions relating to rights of nationals of each country in the other country, protection of property and rights and immunities of consuls.

Reference is made in this connection to the Department’s Diplomatic Serial No. 211, dated August 18, 1923,³ and to the Embassy’s despatch No. 346, December 20, 1923.⁴ The Department’s program of negotiating commercial treaties was delayed pending the favorable action of the United States Senate on the first treaty drafted in accordance with the new policy, the ratification of which treaty was not consented to until 1925. This Government is now prepared to enter into such a treaty with Chile and desires to do so as promptly as practicable.

The first treaty to become effective expressing the present policy of this Government was the Treaty of Friendship, Commerce and Consular Rights with Germany, signed December 8, 1923, ratifications of which were exchanged October 14, 1925.⁵ Similar treaties have been signed by the United States with Hungary, Esthonia and Salvador, of which the ones with Esthonia and Hungary have been brought into force by exchange of ratifications.

A treaty containing the unconditional most-favored-nation clause was signed with Turkey on August 6, 1923. About a dozen other treaties containing it are in process of negotiation. Modi vivendi based upon the same principle, entered into with the following countries, are in force—Brazil, Czechoslovakia, Dominican Republic, Finland, Greece, Guatemala, Haiti, Latvia, Lithuania, Nicaragua, Poland (including Danzig), Rumania and Turkey.

Two copies of the treaty of December 8, 1923, with Germany are enclosed.⁶ You are requested, unless you perceive objection, to inquire whether it would be agreeable to the Government of Chile to proceed to the negotiation with the United States of a similar treaty. A special draft will, of course, be prepared for presentation to Chile if this proposal is acceptable to the Chilean Government. It is probable that certain departures from the text of the German treaty should be made either in the special text to be submitted to the Government of Chile or, on behalf of either party, during the course of negotiations.

It would be gratifying if, among its early treaties embodying the principle of unconditional most-favored-nation treatment, the United States could celebrate a general commercial treaty with Chile. The lack of a general commercial treaty with Chile since the Convention of Peace, Amity, Commerce and Navigation, concluded May 16, 1832,⁷ was terminated on January 20, 1850, is a matter of regret to this Government and it hopes that a comprehensive modern agreement may now be entered into. You will of course keep in mind in this connection that a most-favored-nation clause with a condition, such as that contained in the first sentence of Article II of the Treaty of 1832, would not now be acceptable to the United States.

For your confidential information, though the Department, in proposing a treaty with Chile, is influenced chiefly by its policy of concluding with other countries generally treaties containing the unconditional most-favored-nation clause, you are nevertheless desired to use especial diligence in seeking a favorable response from the Chilean Government, thus forestalling any efforts that other countries may be planning to make for the purpose of interposing in South America arrangements based upon special privilege—a policy wholly antagonistic to the policy of equality of treatment which the United States is undertaking to promote. You may recall in this connection that in 1923 this Government renounced the preferential customs treatment which certain American products had been receiving in Brazil and requested instead a pledge of equal footing with other countries in the Brazilian market.⁸

For your further confidential information and guidance, the Department was informed some time ago that there was a movement on the part of Spain to seek from the countries of Latin America special commercial concessions in return for certain advantages to be accorded to their commerce in Spain. In this connection see the Department’s circular instruction dated April 19, 1926.⁹

Reference is made confidentially to the Embassy’s despatch No. 346 of December 20, 1923, which touched inter alia on the possibility that the Chilean Government would desire some exception to the most favored nation clause covering either the Latin American countries as a whole or, more specifically, Bolivia and Argentina. While it would appear inadvisable to raise the question of exceptions in any discussions with the Chilean Government, the Department suggests that, in case Chilean officials should introduce the matter, you might assume an attitude of discouraging the exemption of any large group of countries, and in case the suggestion is made that one or two specific countries should be exempted, you might state that you will report the matter to Washington. You will of course avoid any commitment.

The Department either has transmitted or expects at an early date to transmit instructions, similar to the present instruction, to the American missions in the other South American capitals except Ecuador, the political regime now functioning in which is not recognized by the United States, and, at least for the present, Panama, with which there remains pending an important treaty of a different character.¹⁰

I am [etc.]

Frank B. Kellogg

1. See Foreign Relations, 1923, vol. i, pp. 121 ff.
2. 42 Stat. 858, 944.
3. Foreign Relations, 1923, vol. i, p. 131.
4. Not printed.
5. For treaties and modi vivendi hereafter referred to in this instruction and not cited therein, see footnotes to instruction No. 1162, Aug. 21, 1926, to the Ambassador in Brazil, Foreign Relations, 1926, vol. i, p. 569.
6. Foreign Relations, 1923, vol. ii, p. 29.
7. Miller, Treaties, vol. 3, p. 671.
8. See Foreign Relations, 1923, vol. i, pp. 453 ff.
9. Not printed.
10. i. e., the unperfected treaty between the United States and Panama, signed July 28, 1926. See Foreign Relations, 1926, vol. ii, pp. 828 ff.; also ibid., 1927, vol. iii, pp. 484 ff.