711.632/24

The Minister in Austria ( Washburn ) to the Secretary of State

No. 1372

Sir: I have the honor formally to acknowledge the receipt of the Department’s Instructions No. 527 of December 1st, 1926, No. 552 of February 11th, 1927, No. 556 of February 24th, 1927, and No. 566 of April 2nd, 1927, incorporating instructions in regard to the provisions of the proposed Treaty of Friendship, Commerce and Consular Rights between the United States and Austria. I have the honor further to acknowledge the receipt of Instruction No. 573 of April 14th, 1927,87 transmitting the President’s full power authorizing me to sign such a treaty as finally approved by the Department.

For the reason explained in the concluding sentence of my despatch No. 1106 of July 20th, 1926, I have preferred to deal with Dr. Schüller directly in the preliminary stages of the negotiations. When we have agreed upon the text he will summon his associates for the final joint sessions and I do not doubt but that he will be able to secure their adhesion without material alteration. Schüller is much away from Vienna in connection with his Foreign Office duties (he has recently spent much time in Prague in an effort to reach an agreement with Czechoslovakia with regard to a new commercial treaty) and he is leaving on Monday to attend the Economic Conference at Geneva. He heads the Austrian delegation and expects to be absent about a month. He has assured me that in the month between the middle of June and the middle of July he will be able to work intensively with me on our Treaty, and he hopes to have it concluded and signed before he goes away on his summer vacation. I am confident that the final draft can be in Washington in ample time for submission to the Senate when it reassembles in December.

Meanwhile I have taken some forward steps and, subject to the reservation mentioned on page 3 of my hereinbefore mentioned despatch No. 1106, I herewith report progress:

Article VII. This has been passed for the present. Some fundamental and far-reaching amendments to this Article have been suggested, as the Department is aware, in before-mentioned Instruction No. 566 which the Austrian Government desires to examine carefully. It is possible that objections may be raised to some of the phraseology proposed but in principle, if I understand Dr. Schüller correctly, he will not object to affirmative provisions dealing with quotas and licences and customs formalities.

Article VIII. The suggestion of the United States that the words “internal taxes” be inserted in the seventh line after the word “to” so [Page 966] as to read “with regard to internal taxes, transit duties,” etc., is accepted.

The Austrian Government is still of the opinion that there is a certain inconsistency between Articles VIII and XIII (see page 5 of the Department’s Instruction No. 527). Dr. Schüller is unable to see how “transit duties” (Article VIII) could be imposed upon goods imported into the United States or Austria. I pointed out however that some question of transit duties might conceivably arise with respect to goods temporarily warehoused, for example, in Vienna and ultimately destined for distribution in the neighboring States. In view of this and inasmuch as the alleged conflicting provisions in Articles VIII and XIII appear in our treaty with Germany, Schüller is content to waive further objection.

The only modification of Article VIII is contained in the insertion of the words “internal taxes” as above explained.

Article X. The Austrian Government desires to add at the end of the first paragraph of this Article “The foregoing stipulations do not apply to the organization of and participation in political organizations.” This is in accordance with the understanding of the Austrian Government, but in the interest of uniformity it is thought best to incorporate the proposal of the German negotiators.

Article XI. There appears to be a misconception on the part of the Department with respect to the interpretation to be placed upon the Austrian Trade Law (Gewerbeordnung #59) quoted on page 15 of my despatch No. 374 of December 18th, 1923. In Instruction No. 527 of December 1st, 1926, pages 6 and 7, it is stated:

“Apparently Austrian law forbids commercial travelers to take orders for merchandise from the consumer but allows them to sell their merchandise only to merchants, industrials and tradesmen. … If commercial travelers representing American concerns are permitted to sell their samples to merchants, industrials or tradesmen, the privilege granted by paragraph (c) would be fulfilled. The Austrian law referred to in your despatch does not, therefore, justify the omission of paragraph (c).”

Austrian municipal law does not in truth and in fact permit commercial travelers to sell to anybody. They may only take orders for merchandise from merchants, industrials and tradesmen. For this purpose they may carry samples, but no merchandise is to be sold directly, and therefore samples may not be sold. The law upon this matter is very stringent and is regarded as almost fundamental and organic, as I have hitherto reported. The main reason for this distinction appears to lie in the fact that commercial travelers pay no taxes. Merchants and tradesmen do pay taxes upon their businesses and upon their sales and to permit commercial travelers to sell, even if their privilege of selling were restricted to samples only, would be deemed [Page 967] unfair competition. It is pointed out that a commercial traveler might conceivably have and legitimately require a large line of samples. Even under the existing practice it is difficult to control the disposition of these samples and it is possible that some of them find their way into domestic consumption without the sanction of the law. Commercial travelers who are Austrian nationals may not sell their samples. The Austrian Government could not possibly grant a greater privilege to commercial travelers who are not Austrian nationals.

Because of the settled policy of Austrian municipal law in this respect it is insisted that section (c) must go out. In view of this explanation further instructions upon this point become necessary and as the issue here involved is not too complicated, I am disposed to telegraph for the desired authority in accordance with the suggestion contained in the concluding paragraph of Instruction No. 552 of February 11th last.

As to section (g), the Austrian Government adheres to the view that it would be preferable to retain only so much of the text of the original draft as is embraced in the following words, to wit:

“Salesmen who vend directly to the consumer shall not be considered commercial travelers.”

Dr. Schüller does not himself, however, object seriously to retaining the original phraseology of section (g) as proposed by the Department if the United States especially wishes its retention, but he thinks that the provision especially enumerating peddlers would be surplusage in view of the Austrian policy with respect to peddlers explained on page 16 of my before-mentioned despatch No. 374.

To sum up, section (c) is inacceptable to the Austrian Government. The Austrian Government prefers that section (g) be modified in the interest of clarity as hereinbefore explained, but will not stand out against the retention of the original draft. If section (c) be omitted a relettering of some of the sections of Article XI will, of course, become necessary as the Department suggests in its before-mentioned Instruction No. 527.

Article XII. The Austrian Government takes note that the United States accepts the amendment proposed by it to section (c), namely to strike out everything after the semi-colon in line 5, so that the paragraph will read as stated on page 9 of the Department’s Instruction No. 527. The proposal of the United States to insert the words “or other competent authorities” in the third line of the second paragraph of section (b) of Article XII after the word “officials” and to strike out the word “customs” in the ninth line of this same section, so that the section as amended will read as set forth on page 10 of the Department’s Instruction No. 527, is accepted.

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Article XV. As a result of considerable discussion and explanation and in the interest of uniformity the proposal to substitute for the first paragraph of Article XV the first paragraph of Article XVIII of the Treaty with Germany, so as to subject Consular officers to prosecution for “offenses locally designated as crimes other than misdemeanors”, is accepted. The amended paragraph will therefore read as set forth on page 3 of the Department’s Instruction No. 552. Dr. Schüller is inclined to agree that the paragraph as amended does meet the criticisms of the original paragraph made by the Austrian negotiators.

The Austrian Government notes that the Department confirms my explanation to the Austrian experts that the proposed treaty provision will effect no change in existing judicial procedure as respects courts in which Austrian consular officers in the United States may be impleaded.

With respect to the suggestion made by the Austrian negotiators that in criminal cases consular officers may be required to testify only as to matters of fact, etc., as set forth on page 2 of my despatch No. 419 of March 4th, 1924,88 I went over with Dr. Schüller the provision in the original draft, to wit:

“In criminal cases the attendance at the trial by a consular officer as a witness may be demanded by the prosecution or defense. The demand shall be made with all possible regard for the consular dignity and the duties of the office; and there shall be compliance on the part of the consular officer.”

He seemed to regard it as satisfactory and did not press his objection. I think we shall hear nothing further from the objection, but I did not judge it advisable to discuss the matter at length in view of Schüller’s attitude. I may say in this connection that Schüller was at first reluctant at this time to discuss any of the consular provisions in the absence of Dr. Leitmaier, Chief of the Bureau of Affairs of International Law, but he finally concluded that some articles could be discussed, especially after summoning Baron Sammaruga [Sommaruga] of this Bureau who participated in the latest conference.

Article XVI. Neither Dr. Schüller nor Baron Sammaruga [Sammaruga], after examining their memoranda, appeared to desire to press the objection raised to the first paragraph of this Article as set forth on page 20 of my despatch No. 374. I am assuming that the language of the original draft of the first paragraph will therefore stand as proposed by the United States. It is, of course, possible that in full conference the Austrian negotiators may come back to this point, but I do not apprehend any difficulty with it.

The word “governmental” in line 7 of the second paragraph of Article XVI has been stricken out and in lieu thereof the words [Page 969] “diplomatic or consular” have been inserted in accordance with the Austrian proposal. This second paragraph will therefore read as set forth on page 10 of the Department’s Instruction No. 552.

Article XVII. The Austrian Government is not disposed to press its suggestions with respect to this Article as set forth on page 22 of my despatch No. 374 and page 2 of my despatch No. 419.89 Dr. Schüller, at all events, recognizes the inadequacy of legislative authority inherent in the American Federal Government in enforcing the proposed penal provisions. He noted that the proposed Article XVII conforms precisely with Article XX of the Treaty of the United States with Germany and Article XVII of the Treaty with Hungary.

At this point the discussions were adjourned. Dr. Schüller was especially anxious to consult with Dr. Leitmaier, hereinbefore mentioned, with respect to Article XX dealing with the competency of consular officers to take charge of property of deceased nationals and to qualify as administrators.

I have [etc.]

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