711.60 h 2/9

The Minister in the Kingdom of the Serbs, Croats and Slovenes (Prince) to the Secretary of State

No. 344

Sir: With further reference to the Department’s instruction No. 64 of March 23, 1927, (File No. 711.60 H 2/1), with which a draft of a treaty of friendship, commerce, and consular rights was enclosed for transmission to the Government of the Serbs, Croats and Slovenes through this Legation, I have the honor to report the results of the negotiations thus far.

Professor Todorović, an expert appointed by the Foreign Office for the preliminary negotiations, in his conversations with me has made several suggestions which were later incorporated in Foreign Office note verbale No. U 1656, which is transmitted herewith in copy and translation. It will be observed from this note that the Foreign Office suggests certain changes and eliminations in the first five articles (the mention of Article six is obviously a mistake) of the treaty draft on the theory that the rights therein mentioned are guaranteed by the National Constitution.

In order that the Department may judge as to the adequacy of the constitutional rights in this Kingdom, the Legation has translated that part of the Yugoslav constitution which may be termed a Bill of Rights, and it is transmitted herewith as enclosure No. 3.30 The Legation pointed out to one of the members of the Legal Section of the Foreign Office that, while the word “citizen” seemed to be employed in the Constitution in the sense of “resident”, at least in one place, i. e., Article 10, (“No citizen may be expelled from the country”) it must have been intended to give the word “citizen” the meaning of “subject”, rather than “resident”. The expert stated that this confusion of the terms “citizen” and “subject” is a recognized weakness of the Constitution, but that the Legislature had undoubtedly intended to use “citizen” in the meaning of “resident”, (which would include [Page 861]American citizens) in every place where it is used in the Bill of Rights except in the one instance above cited.

The suggestion to eliminate Article 6, was made by the Foreign Office on the assumption that it would be impossible to cause the military authorities to accept the proposal to allow the conscription of aliens in time of war, and further that in the absence of a naturalization treaty, final naturalization, to say nothing of the mere declaration of intention, is not recognized by this country. However, I made it clear that this provision of the Treaty is especially desired by the American Government.

The Department will observe that the suggestion to eliminate the phrase “the state of residence or as nationals of” (Article I, lines 24–25) would not guarantee to Americans in this Kingdom the same rights which natives enjoy in the various matters specified in Article I. In my discussions I pointed out that in our present Treaty of 1881 with Serbia Americans were assured the same rights as natives (and vice versa) in a multitude of matters. However, I am assured by the Foreign Minister that in all future commercial treaties Yugoslavia will give foreigners only the same rights as those enjoyed by nationals of the most-favored-nation in various questions pertaining to residence, domicile, entry, taxes, customs, commerce, navigation and industry, the carrying on of business, exercise of professions, the ownership of property, etc. This is clearly shown in the recently concluded British-Yugoslav Commercial Treaty, a copy of which is transmitted herewith as enclosure No. 4.31 I gathered from my conversations that if the American Government desires to submit a draft of the most-favored-nation clause in the sense in which it is contained in the British-Yugoslav Treaty this will be acceptable to the Government of the Serbs, Croats and Slovenes. I was told by the Minister of Foreign Affairs that this Kingdom could no longer guarantee to foreigners the same rights as those given to natives to the extent specified in the Treaty of 1881, now in force between the United States and Yugoslavia. Mr. Marinković explained that this was not due to any intention to restrict the rights now enjoyed by American citizens in this Kingdom, but because, under the most-favored-nation clause, other states could claim the same rights, which the Kingdom of the S. C. S. was loath to concede to subjects of certain neighboring states. It was clear that the Foreign Minister had in mind especially Bulgaria, Hungary and Italy and the Department will recollect that this Kingdom is desirous of preventing Italians from establishing themselves [Page 862]on the Dalmatian coast. (See Legation despatch No. 333 of December 4, 1927).32

In my conversations at the Foreign Office the exact meaning of the following part of Article XXVII of the draft was questioned:

“… the High Contracting Parties agree … to extend to such consular officers … the privilege of entry free of duty of … personal property, whether accompanying the officer to his post or imported at any time during his encumbency thereof …”

It was not clear to the Foreign Office whether the above quoted article was intended to apply to the importation of merchandise, newly purchased abroad, or whether it was limited to the personal property of the consular officer, which had previously been in his possession. I suggest that the Department may desire to make this article clearer.

I am also sending herewith, as enclosure No. 5, a copy of the recently concluded German-Yugoslav Treaty of Commerce, which entered into force on December 20, 1927,—the date of the exchange of ratifications.33 It will be observed from Article 13 of the concluding protocol (Schlussprotokoll) of this treaty, that shipments of trans-oceanic goods, if imported into Yugoslavia through Germany, may be accompanied by certificates of origin executed in Germany. This may be of considerable practical advantage to distributors of American goods in places such as Vienna, because, as the Department is aware, (See Legation Despatch No. 278 of August 31, 1927, Leg. File No. 631),32 such indirect shipments of American goods are subject to the maximum Yugoslav customs tariff. The Legation will send another copy of the German-Yugoslav Treaty to Commercial Attaché Groves at Vienna, who will see whether Austria desires to claim the same privilege under the most-favored-nation clause. Should this be the case, it would greatly facilitate the transshipment of American goods from Vienna, which is greatly hampered at present by the certificate-of-origin requirement.

I have here discussed only those points in the Foreign Office note verbale which appear to require amplification, as the remaining suggestions enumerated therein will be self evident to the Department.

As of possible interest to the Department, there is also transmitted herewith, (Enclosure No. 6), a copy of the recently ratified Treaty of Commerce and Navigation between the Kingdom of the Serbs, Croats and Slovenes and the Economic Union of Belgium and Luxemberg.34

I have [etc.]

John Dyneley Prince
[Page 863]
[Enclosure—Translation]

The Minister of Foreign Affairs of the Kingdom of the Serbs, Croats and Slovenes (Marinkovitch) to the American Minister (Prince)

U. No. 1656

Mr. Minister: In reply to letter No. 1419 of April 19, 1927, by means of which you had the goodness to submit your Government’s draft of a Treaty of Friendship, of Commerce, and of Consular Bights, I have the honor to inform you of the following remarks and modifications to this draft:

[Page 864]
Article I.
1) eliminate the phrase (line 5–6) to exercise liberty of conscience, and freedom of worship.
2) add after the word “privileges” (line 22) the words all this
3) eliminate the phrase (line 24) the state of residence or as nationals of
Article II. eliminate
Article III. eliminate
Article IV. accepted
Article V. Eliminate
Article VI. Eliminate
Article VII.
1) in the second paragraph eliminate the last sentence nor shall any such … in the country
2) eliminate paragraphs 6 and 7 and form a new article of the same material to be placed after Article VIII.
3) to article VII comes this final protocol, thus worded:

The treatment of the most favored Nation is not applicable:

1)
to special favors, which were or shall be granted to limitrophe Countries in order to facilitate the frontier traffic;
2)
to special favors, which were or shall be granted to a third State in virtue of a Custom Union.

Article VIII.
eliminate at the beginning the words “nationals and”
Article IX. accepted
Article X.
Article XI.
at the end, add: “upon the condition of reciprocity
Article XII. accepted
Article XIII.
Article XIV.
1) eliminate paragraph C.
2) eliminate entirely the second part of paragraph D.
3) Paragraph G, modified, should read thus: The provisions of article 14 shall not be applicable to ambulant industries, nor shall they be applicable to peddlery or to persons who are in search of commands from persons who do not exercise nor commerce nor industry.
4) in the final protocol add the following text: on the reason of commercial business concluded on the territories of the other Contracting Party, commercial travellers shall not be subject to other taxes or at a higher rate than its nationals, or nationals of the most favored nation.
Article XV.
eliminate the complete first part of Paragraph b.
Article XVI. accepted
Article XVII.
in Paragraph 3 strike out from the last sentence “or other document issued in lieu thereof”
Article XVIII. accepted.
Article XIX.
Article XX.
in the first paragraph, after the words “with an appropriate inscription” add: “on the national language”
Articles XXI–XXV. accepted.
Article XXVI.
in place of the words “of any flag” put: “only national flag of each of the High Contracting Parties”.
Articles XXVII–XXXI. accepted.
Articles VIII and IX receive a final protocol, worded as follows: ad art. VIIIa. IX the disposition of the art. VIIIa, IX shall be applied only on the maritime navigation.

In informing you of the preceding, I have the honor, Mr. Minister, to draw your attention to the fact that

1.
Our proposal to eliminate Articles II, III, V and VI, as well as the first part of Article I does not result from the fact that these rights and favors would not be accorded to foreigners but because [Page 865]these rights are, on the contrary, guaranteed by the Constitution of the Kingdom of the Serbs, Croats and Slovenes.
2.
Modifications (2) and (3) to Article I are introduced because the questions of domicile (établissement) and employment are treated in our Kingdom in Conventions of Domicile, and Treaties of Commerce containing only the most-favored-nation clause in this sense.

Regarding the project of the conclusion of different purely juridical conventions, I will take these matters up later as soon as I have received detailed replies from the Ministries competent in the matters in question.

Accept [etc.]

Dr. V. Marinkovitch35
  1. Not printed.
  2. Not printed. For text, signed May 12, 1927, see League of Nations Treaty Series, vol. lxxx, p. 165.
  3. Not printed.
  4. League of Nations Treaty Series, vol. lxxvii, p. 19.
  5. Not printed.
  6. Not printed. For text, signed Dec. 16, 1926, see League of Nations Treaty Series, vol. lxx, p. 371.
  7. These negotiations did not result in the signing of a treaty.