The Minister in Uruguay (Grant-Smith) to the Secretary of State
[Received September 30.]
Sir: With reference to the Department’s instruction No. 54 of August 6, 1926,1 I have the honor to report that in conversation this afternoon with Sr. Saralegui, Minister for Foreign Affairs a. i., referring to the study I had been making recently of the treaty making powers of the Uruguayan Government, I said casually that it was surprising that no Treaty of Commerce and Consular Rights existed between our respective Governments. He replied that Uruguay now had no treaties of commerce with any country and, on my mentioning those with France and England, he said that they had all been denounced after the War. To my inquiry as to how Uruguay got on, he replied that her commercial relations with other countries were regulated entirely by International Law on the basis of the most-favored-nation treatment and pointed out that the Uruguayan Tariff was the same for all.
I observed that it was precisely the policy of unconditional most-favored-nation treatment that the United States was trying to forward; that we had recently negotiated a treaty with Germany on that basis2 and that he would readily understand that Germany would not have entered into an agreement which would not have been advantageous to her interests, to which he readily assented. I mentioned that I had been interested to learn by the press telegrams that a similar treaty had just been concluded between the United States and Hungary3 and went on to say that I was convinced that in the adoption of the policy of the “wide open door” small nations would find the best guarantee for their independence. That, for example, in case a neighbor or other strong power should at any [Page 814]time manoeuvre a country into a difficult position, it might be difficult to avoid the concession of special privileges, especially might that come about in the condition in which Uruguay at present found herself, without any commercial treaties. On the other hand, such a possibility would be avoided if she had a treaty containing broad provisions such as those contained in our treaty with Germany.
I observed that the old spirit of monopoly was still abroad; that the desire to canalize commerce to their own exclusive advantage was still entertained by some nations. I said that in that connection, I had been especially interested by a case in the colonial history of this part of the world. He would recall that during that period, the Spanish had held a monopoly for the commerce with South America, had canalized it over the Isthmus and down the Pacific Coast to Peru, whence it had had to cross the Andes and so down to Buenos Aires. Legitimate trade could then be carried on only by that circuitous and costly route, whereas all traffic direct by sea with the River Plate was treated as contraband.
Sr. Saralegui evinced interest and inquired why I did not submit a draft of such an agreement, to which I replied that first I would prefer that he should examine our treaty with Germany, which I would have translated into Spanish, when he could see just what it contained, a suggestion which he appeared to receive with satisfaction. I added that we had no such treaties with nations in this part of the world and that I was not unnaturally desirous that such a treaty should be negotiated during my incumbency of this Legation.
It will be my endeavor to induce Sr. Saralegui to repeat his suggestion in writing and although he may do so there would be no prospect of substantial progress with negotiations being made until after the November elections. It will be, however, advantageous if we can bring them about before the return from Europe of Dr. Blanco because Sr. Saralegui, being the permanent Undersecretary, will presumably stop on at the Ministry of Foreign Affairs whatever the result of the elections may be and would be likely to take more interest in such a treaty if the negotiations are initialed by him. Should I be fortunate enough to receive a written request I shall advise the Department by telegraph and would be glad if a draft would be forwarded to me with as little delay as possible.
I have [etc.]