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

711.582/22

The Solicitor for the Department of State ( Hackworth ) to the Swedish Minister ( Boström )

Washington , June 13, 1927 .

My Dear Mr. Minister: Supplementing the conversations which you, Mr. Weidel,¹⁰ Mr. Barnes¹¹ and I had Friday, June 3, on questions raised by your Government in regard to certain provisions of the draft of the Treaty of Friendship, Commerce and Consular Rights which is under negotiation, I have pleasure in sending you herewith, agreeably to your request, a memorandum touching the points presented in your memorandum of March 24 last.

Mr. Barnes and I will be glad to discuss with you or Mr. Weidel, at your convenience, any points touched on in these memoranda on which you may desire further explanation or any other questions relating to the provisions of the draft of the Treaty.

Sincerely yours,

Green H. Hackworth

[Enclosure—Memorandum]

The Department of State to the Swedish Legation

Article I

Par. 1. (a) The term “local laws and regulations” is understood to comprise all laws and regulations whether National, State, Provincial, Municipal or otherwise duly in force at the time when and at the place where any event occurs which comes within the terms of the paragraph, and applicable to all persons similarly situated; as, for instance, a restriction upon the height of buildings or upon the age and training requirements for admission to a profession.

(b) It is intended by the word “hereafter” to restrict the privileges secured by the most favored nation clause to those which may be granted after the coming into force of the treaty. It is not intended that the word shall be interpreted to include privileges of the most favored nation in force at the time the treaty comes into force. It is to be noted that with respect to such privileges the same treatment is accorded as is accorded to nationals of the country. The United States would have no objection to the omission of the words “hereafter to be” if the Swedish Government so desires.

(c) It is agreed that the concluding sentence of Paragraph 1,—“submitting themselves to all local laws and regulations duly established”,—refers to the entire contents of Article I, Paragraph I.

(d) It is understood that while the treaty confers upon the nationals of each of the High Contracting Parties only the right to own buildings within the territory of the other, it does not exclude such nationals from the right to own land so far as the local laws permit land to be owned by foreigners.

Par. 2. It is understood that the term “internal charges or taxes” refers to charges or taxes imposed upon persons or property within the country, for instance, an income tax or a tax on property, as distinguished from taxes which are a condition precedent to the admission of persons or property into the country, for instance, import duties.

Par. 5.¹² The term “immigrant” as defined in Section 3 of the Immigration Act of 1924¹³ of the United States does not include “an alien visiting the United States temporarily as a tourist or temporarily for business or pleasure”. The reservation in paragraph 5 of Article I that nothing contained therein shall be construed to affect existing statutes of either of the High Contracting Parties in relation to the immigration of aliens or the right of either of the High Contracting Parties to enact such statutes is regarded as applicable to any statutes governing the entry of aliens into the United States and not merely to the provisions of the Immigration Act of 1924 concerning aliens classified therein for the purposes of that Act as “immigrants”. It is understood that the stipulation in paragraph 1 of Article I, according most favored nation treatment, is to be applied to tourist traffic, but that this stipulation is limited by the reservation made in paragraph 5.

It is further understood that the requirement at the end of paragraph 1 “submitting themselves to all local laws and regulations duly established” includes the requirements of national laws and regulations respecting passports and visas. Therefore, it is believed that there is no need for a supplemental memorandum to the effect that the High Contracting Parties reserve the right to issue special regulations for the visa of passports.

The United States desires to have the word “Article” in the second line of the fifth paragraph of Article I replaced by the word “Treaty”.

Article II

Article II has the effect of according to aliens the right to treatment under Workmen’s Compensation laws similar to that accorded to citizens of the State of the United States in which they reside. While the United States is willing to consider the conclusion of a separate agreement with Sweden covering workmen’s compensation, it is pointed out that it is believed that the provisions of Article II are as comprehensive as any that the United States would be willing to enter into and that the United States would be glad if it should be acceptable to Sweden in its present form.

Article IV

It is observed that there are no restrictions in Swedish law similar to those assumed in Article IV.

The Article was drafted in the light of the actual status of the right of aliens to dispose of and to acquire property in the United States by testamentary disposition or in cases of intestacy. The phraseology is similar to that used in earlier treaties of the United States, as for instance, the Convention as to the Tenure and Disposition of Real and Personal Property, concluded March 2, 1899, between the United States and Great Britain.¹⁴ The provision is well known in American law and has served to protect the rights of aliens. Since it is believed that in practice the rights of Swedish nationals will be protected by the Article as drafted, this Government believes it unwise to adopt the suggestion that the Article be redrafted.

Article V

a) In the United States the right to exercise freedom of worship as granted in Articles I and V of the draft is understood to include the right to exercise public worship.

The limitation “submitting themselves to all local laws and regulations duly established” in Article I, paragraph 1, is understood to refer to laws and regulations which regulate the exercise of the rights granted in the paragraph. It is not understood to embrace laws or regulations having the effect of preventing the exercise of those rights by certain classes of nationals.

b) It is understood that the term “at liberty” as used in Article V means that the congregations shall have the right or be free to worship in such buildings as they may have been permitted to erect and maintain. The right to own, erect or lease and occupy appropriate buildings and to lease lands for religious purposes is granted in the first paragraph of Article I.

Article VII

Par. 1 and 2. (a) The comments made by the Legation will be given more detailed consideration.

(b) It is understood that the word “like” article in paragraph 2 refers to the same article as previously mentioned in the sentence.

Par. 7.¹⁵ It is agreed that the words “and goods” shall be added at the end of paragraph seven. The word “and” in the last line of the paragraph before “vessels” will then be omitted. The word “goods” is suggested instead of “merchandise” in order that the wording of the paragraph may be uniform. Paragraph 7 of Article VII will then read, the added words being underlined:^15a

“With respect to the amount and collection of duties on imports and exports of every kind, each of the two High Contracting Parties binds itself to give to the nationals, vessels and goods of the other the advantage of every favor, privilege or immunity which it shall have accorded to the nationals, vessels and goods of a third State, whether such favored State shall have been accorded such treatment gratuitously or in return for reciprocal compensatory treatment. Every such favor, privilege or immunity which shall hereafter be granted the nationals, vessels or goods of a third State shall simultaneously and unconditionally, without request and without compensation, be extended to the other High Contracting Party, for the benefit of itself, its nationals, vessels and goods.”

Par. 8.¹⁶ (a) It is agreed that there shall be added to Paragraph 8 a sentence to the effect that the privileges granted to Cuba and the dependencies shall be excepted only so long as the same privileges are not granted to a third power.

(b) It is agreed that reservations may be made on behalf of Sweden of the privileges which Sweden has already granted or may in the future grant neighboring countries, in order to facilitate trade on the border.

Paragraph 8 of Article VII will then read, the new provisions being underlined:^15a

“The stipulations of this Article do not extend:

• “(a) to the treatment which either Contracting Party shall accord to purely border traffic within a zone not exceeding ten miles (fifteen kilometers) wide on either side of its customs frontier:
• “(b) to the treatment which is accorded by the United States to the commerce of Cuba under the provisions of the Commercial Convention concluded by the United States and Cuba on December 11, 1902,¹⁷ or any other commercial convention which hereafter may be concluded by the United States with Cuba, or to the commerce of the United States with any of its dependencies and the Panama Canal Zone under existing or future laws, so long as such special treatment is not accorded to any other State”

Sympathetic consideration is being given to the request that a reservation be made in respect of the privileges which Sweden has granted or may in the future grant Norway or Denmark or both of these countries. The Department would be grateful for information in regard to the privileges that are now in existence.

Article VIII

(a) It is understood that the transit duties mentioned in Article VIII are duties on articles imported into the territories of the Contracting Parties, whereas those referred to in Article XVI are duties on goods in transit across the territory of a Contracting Party to a destination in a third State.

(b) It is understood that sympathetic consideration will be given to the suggestion that a reservation be made with regard to certain regulations in the Swedish law which stipulate for a special tax on:

1. Alcohol produced from foreign raw materials in contrast to Swedish raw materials (not from foreign rye, however);

2. Starch produced from foreign raw materials (not from foreign wheat, however);

3. Manufactured tobacco;

It is suggested that this reservation, if agreed to, might be made as an exception or proviso in Article VIII rather than in an exchange of notes to accompany the treaty, as was suggested in the Legation’s memorandum, in either case provision being made for most favored nation treatment in respect of products of the United States. Before making a final decision as to the acceptance of the proposed reservation, the Department would be glad to have for consideration detailed information in regard to the laws governing these taxes and, if possible, data as to the extent to which American products are involved.

Article IX

a) Careful consideration will be given to the suggestion that a paragraph such as proposed in the Memorandum from the Legation of Sweden, be inserted at the beginning of Article IX or elsewhere in the draft giving full equality in every instance between the vessels of the High Contracting Parties. It is mentioned, however, that the stipulations of Article IX as drafted relate only to duties and other charges, and also that in the view of the Department the entire substance of the paragraph suggested by the Legation is embraced in other Articles of the draft, specifically Article VII, paragraphs 1, 5, 6, 7 and 8, and Article XI.

b) 1. It is believed that no reservation is necessary to prevent the stipulations of this Article applying to the coasting trade as a statement of the non-applicability of the entire treaty to the coasting trade is contained in Article XI.

2. In view of the fact that the rights granted to vessels under the Treaty are granted “under the same conditions” as to national vessels, and as no rights in regard to fishing are granted under the Treaty, it is believed that there is no necessity for a reservation of certain facilities granted Swedish fishermen.

3. The Department will be glad to be informed in regard to the character of the privileges accorded Finland with regard to the obligation to use a pilot, and to receive from the Legation a draft of the reservation which it asks to have made.

c) It is agreed that sympathetic consideration will be given to the proposal that a most favored nation clause be inserted in Article XXX to provide for the contingency of the termination of Article IX before the expiration of the remainder of the treaty. (See Article XXX).

Article XI

(a) Consideration is being given to the request that the last sentence of Article XI according most favored nation treatment with regard to coasting trade be stricken out. The Department asks, however, whether the Government of Sweden would accept the proposal in the draft limited, however, to such privileges in the coasting trade as may be granted in future.

(b) It is agreed that sympathetic consideration will be given to the proposal that a most favored nation clause be inserted in Article XXX to provide for the contingency of the termination of Article XI before the expiration of the remainder of the treaty. (See Article XXX).

Articles XIV and XV

It is agreed that a most favored nation clause in regard to the treatment of commercial travelers will be substituted for the detailed provisions of Articles XIV and XV, if the treatment in respect of them accorded by each party to the most favored nation is acceptable to the other party. The treatment to which commercial travelers representing Swedish interests would be entitled under a most favored nation clause is that provided in Articles XIV and XV of the Treaty of Friendship, Commerce and Consular Eights between the United States and Germany which Articles are identical with Articles XIV and XV of the draft. It is apparent, therefore, that commercial travelers representing Swedish business houses would be accorded the same treatment in the United States under a most favored nation provision as if Articles XIV and XV of the draft are agreed to. A statement of the treatment which commercial travelers representing American merchants, etc., would be accorded in Sweden under the most favored nation clause is desired.

The following most favored nation clause would be agreed to by the United States if the treatment which would be accorded thereunder to commercial travelers representing American merchants in Sweden, should after consideration by this Government appear to be satisfactory:

“Commercial travelers representing manufacturers, merchants and traders domiciled in the territories of either High Contracting Party shall on their entry into and sojourn in the territories of the other Party and on their departure therefrom be accorded the most favored nation treatment in respect of customs and other privileges and of all charges and taxes of whatever denomination applicable to them or to their samples.

“If either High Contracting Party require the presentation of an authentic document establishing the identity and authority of a commercial traveler, a signed statement by the concern or concerns represented, certified by a consular officer of the country of destination shall be accepted as satisfactory.”

Article XVI

A statement of the reservations which Sweden would desire to make in conformity with the stipulations of the Barcelona Convention of 1921 on freedom of transit, is desired.

Article XXX

The Department is willing to give sympathetic consideration to the proposal made by the Legation that provision be made in Article XXX for most favored nation treatment in respect of the provisions of Paragraphs 5 and 6 of Article VII and of Articles IX and XI, in the event of the termination of any or all of these provisions prior to the termination of the remainder of the treaty. It is suggested that the desire of the Swedish Government would be met if changes as follows were made in the third paragraph of Article XXX: Strike out all of the first sentence of that paragraph following the word “enactment” in the 13th line thereof, place a period after enactment, and add a new sentence as follows: “If the fifth or sixth paragraph of Article VII or Article IX or Article XI be terminated or lapse in accordance with the provisions of this paragraph, each of the High Contracting Parties shall enjoy, unconditionally and without compensation, the same treatment in respect of the subject matter of such paragraph or Article as is accorded by the other Party to the most favored foreign nation.”

The third paragraph of Article XXX will then read, the suggested new provision being underlined:^17a

“The fifth and sixth paragraphs of Article VII and Articles IX and XI shall remain in force for twelve months from the date of exchange of ratifications, and if not then terminated on ninety days’ previous notice shall remain in force until either of the High Contracting Parties shall enact legislation inconsistent therewith when the same shall automatically lapse at the end of sixty days from such enactment. If the fifth or sixth paragraph of Article VII or Article IX or XI be terminated or lapse in accordance with the provisions of this paragraph, each of the High Contracting Parties shall enjoy, unconditionally and without compensation, the same treatment in respect of the subject matter of such paragraph or Article as is accorded by the other Party to the most favored foreign nation.”

While as hereinbefore indicated the Department is giving sympathetic consideration to this suggestion from the Legation of Sweden, it is believed that it is necessary to remark that such a provision, if included in the Treaty, might become an impediment to ratification by the United States. The third paragraph of Article XXX of the draft conformed strictly to the reservation made by the Senate of the United States when giving its advice and consent to the ratification of the Treaty of December 8, 1923, between the United States and Germany and the provision for most favored nation treatment under consideration would constitute a variation of that reservation which might not be acceptable to the Senate.

Inquiry is made, therefore, whether the Government of Sweden would consider the withdrawal of this proposal.

Washington , June 31, 1927 .

10. Commercial Counselor of the Swedish Legation.
11. Assistant Solicitor, Department of State.
12. See footnote 3, p. 741.
13. 43 Stat. 153.
14. Malloy, Treaties, 1776–1909, vol. i, p. 774.
15. See footnote 5, p. 744.
16. The underlined portions are printed in italics.
16. See footnote 6, p. 744.
17. The underlined portions are printed in italics.
17. Foreign Relations, 1903, p. 375.
18. The underlined portions are printed in italics.