The Chargé in Great Britain (Atherton) to the Secretary of State

No. 1598

Sir: I have the honor to refer to the Department’s Instruction No. 740, of November 12, 1926, in connection with the proposed negotiations of a convention relative to Iraq, and to forward for the Department’s instructions and comment, copy of a Foreign Office Note, dated January 18, 1927, containing certain explanations and proposals connected with the counter-draft.

I have [etc.]

Ray Atherton

The Head of the Eastern Department of the British Foreign Office (Oliphant) to the American Chargé (Atherton)

No. (E 136/136/65)

Dear Atherton: We have examined in consultation with the Colonial Office the State Department’s counter-draft of November 12th64 for a Convention between the United States, Great Britain and Iraq, and also the explanations and proposals connected with that counter-draft which were set forth in Sterling’s letter of December 1st to me.64

2. We are glad to find that so large a measure of agreement has now been reached. We must of course consult the Iraq Government as to the proposals made by the State Department, but it may save time if I let you know at once how these proposals strike us. You will of course realise that my observations are provisional, pending receipt of the remarks of the Iraq Government.

3. I will deal first with the points mentioned in Sterling’s letter, and then with certain points which had previously been raised by the Iraq Government.

4. We agree to adopt the text which the State Department prefer for article 1, i. e. the formula which appeared on the right hand side of page 3 in our draft of July 30th.

5. We also agree, in view of the considerations set forth in paragraphs 6 and 7 of Sterling’s letter of December 1st, that it is unnecessary to include article 7, either in the form originally proposed by your Government, or in the form suggested in the draft of July 30th; and we see no objection to the communication which the State Department wish you to make to the British and Iraq Plenipotentiaries about the position which will exist as regards the [Page 800] capitulatory regime when the Convention comes into effect, and during the period of the “special relations” defined in the draft of July 30th.

6. We note that the State Department agree to our proposal to omit that “no discrimination” article (No. 8) in the original draft, provided that written assurances are given to the United States Government that the undertaking to grant full equality of treatment in matters of taxation, etc., includes the granting of concessions; and we are ready to urge the Iraq Government to accept the formula suggested in paragraph 8 of Sterling’s letter for an exchange of notes on this subject. We think, however, that in order to make the matter quite clear it would be better to say “the term ‘exercise of industries’ “instead of “the term ‘industries’”.

7. As regards article 9 of the draft of July 30th (which will now become article 8 owing to the omission of article 7 in that draft), it will of course be necessary to delete the words “subject to the provisions of the second paragraph of article 7”. As regards the second and final paragraph of this article suggested in Sterling’s letter, we feel that it would be very difficult for the Iraq Government to accept the text proposed by the State Department as it stands, for the following reasons. Under that text the United States would, without giving anything in return, obtain full most-favoured-nation treatment in Iraq until such time as a new treaty was concluded, and the Iraq Government will almost certainly feel that, this being so, there would be no particular inducement for the United States to conclude such a treaty, so that the condition of affairs produced by the draft might continue almost indefinitely. On the other hand we fully realise that the Government of the United States can reasonably expect that they should not be left without any treaty rights at all on the termination of the present treaty. In these circumstances it is necessary to find a solution which will provide a system which will be fair to both sides during the provisional period before the new treaty is concluded, and we suggest that this might be done by a provision on the following lines:—

“On the termination of the said special relations, negotiations shall be entered into between the United States and Iraq for the conclusion of a treaty in regard to their future relations and the rights of the nationals of each country in the territories of the other. Pending the conclusion of such an agreement the nationals, vessels, goods and aircraft of the United States and all goods in transit across Iraq, originating in or destined for the United States, shall receive in Iraq the most-favoured-nation treatment; provided that the benefit of this provision cannot be claimed in respect of any matter in regard to which the nationals, vessels, goods and aircraft of Iraq, and all goods in transit across the United States, originating in or destined for Iraq, do not receive in the United States the most-favoured-nation treatment”.

[Page 801]

We have followed your wording as closely as possible, but there is one point to which I should like to call attention. With the disappearance of the second paragraph of article 7, the position of United States citizens in judicial matters after the termination of the treaty will not be dealt with at all unless it is dealt with in the proposed new paragraph of article 8, and we assume therefore that the wording proposed by the State Department was intended to cover the judicial regime applicable to American citizens. It is not however quite clear to us that the actual wording does cover it, and we suggest that this point should receive consideration by the State Department.

8. I now turn to the points suggested by the Iraq Government. They have raised objection to the references in the Preamble and in articles 1 and 2 of the draft of July 30th to the decisions of the Council of the League of Nations relating to Iraq. We are presenting to them that these objections as a whole cannot be entertained; but we hope that the Government of the United States will be prepared to make certain minor modifications with a view to meeting, to some extent, the wishes of the Iraq Government. Firstly, it seems unnecessary to reproduce the full text of the League Council’s resolutions dated March 11th, 1926, (at present included in Schedule 4 to the draft Convention), to which the Iraq Government take objection as it contains the phrase “mandatory regime”, which the Iraq Government dislike. We therefore propose that paragraph 7 of the Preamble should read as follows: “Whereas on the 11th day of March 1926 the Council of the League of Nations recorded a resolution taking note of the Treaty of 1926: and”. We would also like, if the State Department see no objection, to include in the Preamble, between paragraphs 9 and 10 of the present draft, a fresh paragraph as follows: “Whereas the United States of America recognizes Iraq as an independent State”. A similar clause was included in the Preamble to the recent Anglo-Iraq-Turkish Treaty, copy of which I enclose herein. The conclusion of a treaty by the United States with Iraq of course involves such recognition, but an express statement to that effect would be popular in Iraq and would facilitate the acceptance of the Convention by the Iraq Assembly.

9. The Iraq Government have raised the question whether article 3 of the draft Convention might not be interpreted as prohibiting the local Government from expropriating American property for public purposes under normal expropriation laws of general application and providing for reasonable compensation. We propose to inform them that the United States has made no attempt to interpret in this manner similar articles in Conventions already concluded in regard to other territories in which the position of American citizens has had to be regularised; but that in order to avoid all possibility of misunderstanding, His Majesty’s Government are prepared to [Page 802] endeavour to obtain from the United States Government a formal assurance that such is not the intention of the article; and we very much hope that the State Department will be prepared to give such an assurance.

10. The Iraq Government want to omit article 4 altogether, on the ground that the annual report to the League is no affair of theirs. We are explaining to them that this is impossible,” as it is only right that the United States should be kept informed by means of the annual report, in the same way as members of the League of Nations, how the affairs of Iraq are being conducted. We appreciate, however, that there is some justification for the Iraq Government’s reluctance to accept that article in its present form; and we therefore suggest for the consideration of the State Department that it should be replaced by the following revised wording: “His Britannic Majesty’s Government undertake to furnish to the United States a duplicate of the annual report to be made in accordance with the terms of the decision of the Council of the League of Nations of the 27th day of September, 1924.”

11. Finally we propose that the last sentence of the whole draft Convention should read as follows:—“Done in triplicate in English and Arabic, of which in case of divergence the English text shall prevail, at . . . . . . . this . . . . . . . day of . . . . . . ., 192 . . .” There will be only three schedules instead of four, if our proposal concerning paragraph 7 of the Preamble is accepted.

12. I enclose for convenience a redraft of the Convention,65 embodying the various amendments proposed up to date.

Yours v. sincerely,

Lancelot Oliphant
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