711.332/3

The Minister in Uruguay (Grant-Smith) to the Secretary of State

No. 315

Sir: In reply to your telegraphic instruction No. 24 of October 11, 4 p.m., 1926, and in explanation of my reply of today’s date, No. 57,4 I have the honor to make report of the circumstances which have led me to the conclusion that it would be preferable to postpone, for the moment, any attempt to initiate formal negotiations for the conclusion of a Treaty of Commerce and Consular Rights between the United States and Uruguay.

When I wrote my despatch of September 6th, No. 287, Dr. Blanco had not resigned the portfolio of Foreign Affairs, which he did by telegraph on the 24th September, thus leaving Sr. Saralegui as locum tenens until, at least, after the Presidential election which will take place next month, and probably until the induction of the new President on March first next. There is, in consequence, no occasion for haste on Sr. Saralegui’s account as then seemed advisable.

As is usual just previous to the opening of the most active season for the sale of cattle, an attack has been launched, by both the cattle raisers and the Press, against the foreign Packers, Messrs. Swift and Co., and Armour & Co., which this year has proven to be sharper than heretofore. The foreign beef “Trust” is violently and very generally, although I believe not justly, denounced. It is highly improbable, therefore, that the Government would feel disposed at this juncture to enter into negotiations which, if consummated, might deprive it of a possible means of dealing summarily with the so called Trust. This will doubtless be found an obstacle even after the agitation has been temporarily calmed, for the threat of confiscation is a weapon which will not be readily relinquished.

It is, consequently, all the more necessary that the ground should be prepared with care and with patience. Suspicion of suggestions made by foreigners is general among Uruguayans and especially if emanating from the United States, a distrust which, as the Department is aware, is encouraged by our rivals in these markets. It is for this reason that I am endeavoring to excite interest on the part, [Page 816]not only of the Minister for Foreign Affairs ad interim, but likewise on that of persons of influence in both parties, first by directing attention to the exposed position, economically, in which this country now finds itself and then, through inference, to the advantages which would accrue to Uruguay through the conclusion of an unconditional-most-favored-nation agreement with the United States.

However absurd it may seem, the shout of “Yankee Imperialism” is sure to be raised immediately it is known that a treaty of any nature with the United States is in contemplation. It is all the more necessary, therefore, that as many leaders as possible of both parties should become well disposed towards the idea in advance. Moreover, the Colorado majority in the Chamber of Representatives is very narrow and cannot always be counted on by the President.

The elections for President and for the National Council of Administration will be held on the last Sunday of November next, and the result is naturally in doubt, more so, in fact, than for many years past. Whatever measure one party initiates, the other opposes. It is obvious, therefore, that our ends would best be served by confining ourselves to the creation of a favorable atmosphere until the elections make it clear of which party the next President will be.

In a conversation this afternoon with Dr. Baltasar Brum, he said that during his term as President he had denounced the commercial treaties between Uruguay and various European countries because of the most-favored-nation clause which each contained! He had offered to renew them by inserting a provision excepting the countries of the Western Hemisphere from the operation of that provision but the proposal had been rejected. A similar offer to Japan had met with a like fate. He mentioned the Uruguayan treaty with Brazil with special reference to the exchange of cattle and said that Uruguay was not willing that European countries should be admitted automatically to the enjoyment of those privileges. Doubtless, when we come to negotiation they will insist on the inclusion of some reservations with regard to trade with Brazil, Argentina and Paraguay similar to that relating to Cuba in our treaty with Germany.

. . . . . . . . . . . . . .

Dr. Brum referred to the treaties containing the unconditional-most-favored-nation provision as “antiquated”. To my observation that the policy of the United States Government was to base its foreign commercial relations on the most-favored-nation provision, which offered admission, on a basis of equality, to a market of over one hundred million, he rejoined that the United States had not been so keen on the “open-door” before it became an exporting nation for finished products. Although Dr. Brum is no longer in office his influence is great. The opinions he expressed would appeal strongly to Uruguayans in general.

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I would be appreciative of any suggestions as to arguments which might aid towards convincing them of the benefits which would accrue to Uruguay through the adoption of such a treaty as we desire.

I have [etc.]

U. Grant-Smith
  1. No. 57 not printed.