711.933/269
Memorandum by the Chief of the Division of Far Eastern Affairs (Hornbeck)
Dr. Wu asked with regard to the meaning of the 11th Article in the memorandum of material for study of January 23.
The Article reads:
“In all matters for which provision is made in this Agreement (Treaty) citizens of the United States shall enjoy in China all of the rights enjoyed by the nationals of the country most favored in such respects and they shall not suffer treatment in any manner discriminatory as compared with citizens of the Republic of China or of any other country.”
Dr. Wu asked whether this meant that the treatment to be accorded to American citizens under an agreement, when concluded, containing this Article was or was not to be in accordance with the other provisions of the Treaty without reference to the provisions which might appear in a treaty concluded by China with some other Power.
[Page 378]Mr. Hornbeck replied that this was, of course, a “most-favored-nation” clause. Dr. Wu repeated his inquiry, with some change of phraseology, stating that what he wanted to know was what would happen if some other country did not give up what the United States gave up. Mr. Hornbeck said that Dr. Wu would doubtless remember the lengthy conversation held in Mr. Johnson’s office in the course of which Mr. Johnson had answered that question;63 Dr. Wu had at that time suggested that China would like to have the United States relinquish extraterritorial rights on an absolute basis, meaning that American nationals and property would be in the same position in China as are the rights and property of German nationals and some others; Mr. Johnson had explained that it would be impossible for the Department to entertain any idea which would involve laying before the Senate a treaty by the provisions of which American nationals would enjoy in China treatment less favorable than that at the same time enjoyed by the subjects of other Powers, for instance, Great Britain, Japan, France, Italy and others; Mr. Hornbeck had been present and had fully shared and concurred in the opinion which was at that time expressed by Mr. Johnson; Mr. Hornbeck did not believe that any important Power would, in the present state of international development, conclude with another a treaty with regard to such matters which did not include the safeguards of a most-favored-nation clause.
Dr. Wu then raised the question of “American interpretation” of most-favored-nation clauses. He suggested that China might apply the “conditional” interpretation. Mr. Hornbeck said that there were two points to be considered in that connection: first, the so-called “American interpretation” had been expressly abandoned by the American Government some six or seven years ago,64 the theory and practice of the American Government in recent years has been that of the “European interpretation” (unconditional), and it could scarcely be expected that the American Government would in this particular instance revert to and use the conditional form of the clauses; second, as China would be making treaties both with the United States and with the European countries, it could not be expected that China could use the conditional form and interpretation in some cases and the unconditional form and interpretation in others. There followed a somewhat lengthy discussion of principles and practice of most-favored-nation treatment and articles expressive of it in modern treaties; and Mr. Hornbeck gave Dr. Wu the authors’ names and titles of the most modern books on the subject.
[Page 379]Dr. Wu said that it might be difficult to determine what treatment would be the “most favored”. If, he said, for instance, China made a treaty with the United States on the basis of categories of cases and a treaty with Great Britain on the basis of geographical regions, which treatment would be the “most favored”? Mr. Hornbeck replied that this might cause a good deal of confusion; that for purposes of consideration an endless number of hypothetical cases might be thought up; but that it would not seem that such a discussion would be likely to be profitable, for it was hardly to be expected that China would enter into a treaty with one country on one basis and at the same time enter into a treaty with another country on another basis. Dr. Wu replied that each country was insisting upon some particular thing and China had to adjust herself to the different types of demands. Mr. Hornbeck replied that, as for the United States, we had not as yet insisted upon any particular thing, except that the plan adopted should be one providing for the gradual abolition of extraterritoriality as set forth in our two notes to the Chinese Government; that we had as yet made only one proposal, the proposal that Chinese law be enforced in American courts, which proposal Dr. Wu had rejected; and that we were at present engaged in a process of exploring, with Dr. Wu, possibilities. Dr. Wu said that it was difficult to reconcile what seemed to be the ideas of the different foreign countries.
Mr. Hornbeck then took occasion to say that it was a matter to be regretted that China had already entered into several treaties on this subject, each differing more or less from the others; that it would be more to be regretted if in several additional treaties there are still greater points of divergence; and that all of this inevitably brought to mind the question: Would it not be to China’s advantage and in the long run to the advantage of all concerned if China could arrange to have a conference whereby all of the negotiating could be done at the same place and at the same time?
Dr. Wu said that China’s experience with conferences had been unfortunate. Mr. Hornbeck replied that the United States had also had some experience with conferences in which not everything had been to its satisfaction, but that, nevertheless, the conference method had its advantages and even now the United States was participating with other Powers in a conference. Dr. Wu said that he realized that there were advantages and disadvantages both ways.
Dr. Wu asked when he might have another conversation on the subject of the memorandum. Mr. Hornbeck said that he hoped to be ready within a day or two but that he could not at this moment set an hour, and he requested that he be allowed to let Dr. Wu know as soon as it proved possible.
- Apparently a reference to the conversation on December 9, 1929; see memorandum, Foreign Relations, 1929, vol. ii, p. 642.↩
- See instruction of August 18, 1923, to American Diplomatic Officers, ibid., 1923, vol. i, p. 131.↩