Papers relating to the foreign relations of the United States, 1928, Volume III

711.682 (1928)/5

The Secretary of State to the Minister in Greece (Skinner)

Washington, March 2, 1928.

No. 135

Sir: There is transmitted herewith for submission to the Foreign Office for negotiation between the United States and Greece a draft of a Treaty of Friendship, Commerce and Consular Rights which already has been the subject of correspondence between the Department and the Legation. A copy of the draft is enclosed for the use of the Legation.²⁵

You will observe that the draft embraces articles relating to establishment and consular rights as well as articles relating to commerce and navigation. The Treaty is designed to promote friendly intercourse between the peoples of the United States and Greece. It is believed that the provisions as drawn lay the foundation for a comprehensive arrangement responsive to the modern requirements of maritime States.

Article VII makes provision in respect of commerce for the enjoyment of the most favored nation treatment in its unconditional form, as applied to persons, vessels and cargoes, and to articles the growth, produce or manufacture of the United States or Greece. The most-favored-nation treatment relates to duties on imports and exports and to other charges, restrictions and prohibitions on goods imported and exported.

The following statements in explanation of the more important differences between the enclosed draft and the Treaty of Friendship, Commerce and Consular Rights signed by the United States and Germany December 8, 1923,²⁶ are made for your information and for use in your discretion in explanations to the Greek authorities.

The reservation concerning statutes relating to the immigration of aliens made by the Senate of the United States in giving its advice and consent to the ratification of the Treaty between the United States and Germany²⁷ is incorporated in the draft as the last paragraph of Article I. The reservation making provision for the termination at the end of one year of the paragraphs of Article VII relating to the treatment of vessels and Articles IX and XI which also relate to that subject is incorporated in Article XXIX of the enclosed draft (Article XXXI of the Treaty between the United States and Germany), as the third paragraph thereof, and a reference thereto is made at the beginning of the first paragraph of the Article.

Article I, paragraph 2—Copyright protection.

The second paragraph of Article I embraces a most-favored-nation clause with respect to copyright protection. This paragraph is included in drafts of treaties submitted by this Government to countries with which the United States has no separate arrangement for reciprocal copyright protection. It is believed that by this provision adequate protection will be obtained for American moving picture films in Greece, inasmuch as American nationals will enjoy thereunder the copyright protection accorded in Greece to nationals of States members of the International Copyright Union. The Department will be glad to receive comment from you in regard to the provision.

Article I, paragraph 3—Retroactive taxation.

As the Legation will recall, the Greek Government in 1922 levied an income tax retroactive for two years which was applicable to American nationals in Greece. Since it is possible that similar legislation may be enacted in the future, a provision is included as the second sentence of the third paragraph of Article I restricting the imposition of retroactive charges and taxes. It will be observed that within the limits of the most-favored-nation clause a tax may be levied under this provision retroactive to the beginning of the calendar or fiscal year preceding the calendar or fiscal year in which the law or decree is promulgated. The principle of retroactivity of tax laws has been recognized to this extent in a number of income tax laws of the United States. In view of the possibility of the same policy being adopted in future laws this Government is not in a position to propose a provision prohibiting entirely retroactive tax legislation. The most-favored-nation clause at the end of the sentence will have value to Americans resident in Greece in the event that nationals of any other country are accorded greater protection against retroactive taxation than is granted to nationals of the United States by the specific stipulation, for in that event the American nationals will have the right to enjoy the most-favored-nation treatment.

Article VI—Exemption from forced loans, etc.

The second paragraph of Article VI embraces a provision exempting nationals of one contracting party from forced loans or other exceptional levies imposed by the other party. A number of earlier treaties of the United States contain provisions exempting the nationals of each party from forced loans in the other country. (Argentine Republic, Treaty of Friendship, Commerce and Navigation of 1853, Article X;²⁸ Serbia, Convention of Commerce and Navigation of 1881, Article IV;²⁹ Japan, Treaty of Commerce and Navigation of 1911, Article I³⁰). At the time the series of Treaties of Friendship, Commerce and Consular Rights now under negotiation by this Government was inaugurated, it was thought that it would not be necessary to continue a provision against forced loans in treaties. There is therefore no such provision in the Treaty between the United States and Germany. In view of the fact, however, that in 1922 Greece levied a forced loan applicable to alien residents, from which Americans in Greece with difficulty obtained exemption as nationals of a most-favored-nation, it is believed to be desirable to include in the Treaty under negotiation with Greece a provision specifically exempting the nationals of each Contracting Party from forced loans and exceptional levies in the other country. It is probable that this paragraph will be included in drafts of treaties which will be proposed by the United States to other Balkan States also.

Article VII, paragraph 2—Quality standards on importations.

In view of the difficulty which has been experienced in the importation of American flour into Greece, by the imposition of a test as to acidity not applied to flour manufactured in Greece, a stipulation is included in the second paragraph of Article VII restricting the contracting parties from imposing any higher or other standards as to the quality of any article imported than is imposed on the like article of domestic growth, production or manufacture. The provision has been approved by competent experts of the Department of Agriculture as not being in conflict with American legislation. It is believed that this provision will prevent the recurrence of the difficulties experienced in the importation of American flour into Greece.

Article VII, paragraph 4—Contingent and quota systems and licenses for importation and exportation of restricted goods.

The fourth paragraph of Article VII is designed to assure equality of treatment in respect of licenses, quotas and contingents for the importation or exportation of restricted goods. In practice it has been difficult to obtain such equality of treatment for the commerce of the United States in certain European countries in which systems prohibiting or restricting the importation or exportation of certain goods have been in force, and from which prohibitions or restrictions abatements are made by contingents or licenses. This Government is undertaking to have the paragraph included generally in the treaties of friendship, commerce and consular rights which it is now negotiating and desires that it be included in the Treaty with Greece. Stipulations in regard to prohibitions, restrictions and licenses are contained in the International Convention Relating to the Simplification of Customs Formalities signed at Geneva, November 3, 1923,³¹ in Article 9 of the Treaty of Commerce and Navigation between Great Britain and Austria, signed at London, May 22, 1924,³² and in a provision contained in the second paragraph of the Exchange of Notes signed by the United States with Greece on December 9, 1924,³³ Treaty Series No. 706. Like stipulations are contained in Exchanges of notes signed by the United States with a number of other countries, namely,—Poland, February 10, 1925, Treaty Series No. 727; Finland, May 2, 1925, Treaty Series No. 715; Estonia, March 2, 1925, Treaty Series No. 722; Rumania, February 26, 1926, Treaty Series No. 733; Latvia, February 1, 1926, Treaty Series No. 740; Lithuania, December 23, 1925, Treaty Series No. 742; and Haiti, July 8, 1926, Treaty Series No. 746.³⁴

Article VII, paragraph 7—Bounties and drawbacks.

The seventh paragraph of Article VII providing for equality of treatment of vessels with regard to bounties, drawbacks and other privileges, although not contained in the Treaty between the United States and Germany is included in a number of the older treaties to which the United States is a party, for example, Treaty of Commerce and Navigation of 1837 with Greece, Article IX,³⁵ Treaty of Friendship, Commerce and Navigation of 1853 with the Argentine Republic, Article VI,³⁶ Treaty of Friendship and General Relations of 1902 with Spain, Article VII.I³⁷ This Government desires to have the paragraph included in the Treaties of Friendship, Commerce, and Consular Rights, which it shall sign hereafter with maritime countries.

Article XIV—Commercial travelers.

Article XIV provides for most-favored-nation treatment in regard to commercial travelers and is used in lieu of Articles XIV and XV of the Treaty between the United States and Germany. The first paragraph of Article XIV is identical with Article XIV of the Treaty of Friendship, Commerce and Consular Rights of December 23, 1925, between the United States and Estonia³⁸ (Treaty Series No. 736). The second paragraph should be regarded as a development of paragraph 2 of the protocol to that Treaty.³⁹ The article in the same form as in the enclosed draft is included in drafts which the United States has submitted to a number of countries. It is the purpose of this Government to discontinue the use of such Articles as Articles XIV and XV of its Treaty with Germany.

Article XV—Freedom of transit.

The first paragraph of Article XV (Article XVI of the Treaty between the United States and Germany) has been enlarged so as to make the provisions in regard to freedom of transit apply to goods “going to” as well as those “coming from or going through” the territories of the contracting parties, the language now used being “coming from, going to, or passing through”. The purpose of the change is to cover all of the situations in which the question of freedom of transit might arise.

Article XXIX—Termination of provisions relating to shipping; termination of Consular Convention of 1902.

The provisions in the third paragraph of Article XXIX in regard to the termination of certain paragraphs of Article VII and Articles IX and XI have been explained above on page 2. In the fourth paragraph of Article XXIX it is provided that the Treaty shall from the date of the exchange of ratifications supersede the Consular Convention concluded by the United States and Greece, November 19, December 2, 1902.⁴⁰

Detailed instructions in regard to each Article of the draft will be sent to you by an early pouch.

When presenting the draft to the Foreign Office please state that this Government reserves the right to propose changes therein throughout the course of the negotiations.

This reservation will afford the Department an opportunity to consider any suggestions in regard to the Treaty which you may care to make as indicated in your despatch No. 405 of December 15, 1927,⁴¹ and to instruct you in regard to them.

Please inform the Department by telegram of the date on which you submit the draft to the Foreign Office.

I am [etc.]

Frank B. Kellogg

25. Not printed.
26. Foreign Relations, 1923, vol. ii, p. 29.
27. See bracketed note, ibid., p. 45.
28. William M. Malloy (ed.), Treaties, Conventions, etc., Between the United States of America and Other Powers, 1776–1909 (Washington, Government Printing Office, 1910), vol. i, pp. 20, 23.
29. Ibid., vol. ii, pp. 1618, 1619.
30. Foreign Relations, 1911, p. 315.
31. League of Nations Treaty Series, vol. xxx, p. 371.
32. Ibid., vol. xxxv, pp. 175, 180.
33. Foreign Relations, 1924, vol. ii, pp. 279–281.
34. For texts of agreements with Estonia, Finland, Lithuania, and Poland, see ibid., 1925, vol. ii, pp. 66–69, 94–98, 500–503, and 692–696; for those with Haiti, Latvia, and Rumania, see ibid., 1926, vol. ii, pp. 403–405, 500, and 898–901.
35. Hunter Miller (ed.), Treaties and Other International Acts of the United States of America, vol. 4, pp. 107, 113.
36. Malloy, Treaties, 1776–1909, vol. i, pp. 20, 22.
37. Foreign Relations, 1903, pp. 721, 723.
38. Ibid., 1925, vol. ii, pp. 70, 76.
39. Ibid., p. 84.
40. Foreign Relations, 1903, p. 565.
41. Not printed.