The Acting Secretary of State to the Netherlands Minister ( Van Royen )

Sir: I have the honor to refer to aide-mémoires No. 1949, which you handed to Mr. Kellogg on June 28, 1928, and No. 1333, which you left with Mr. Castle on May 10, 1929, concerning the proposal for a treaty of arbitration between the United States and the Netherlands which was made in this Government’s communication dated March 29, 1928.7

I am gratified to note, in the earlier aide-mémoire, your statement that the proposal was received with satisfaction at The Hague. There were, however, certain counter-suggestions which, in accordance with your Government’s desire, have been considered and may be answered as follows:

(1) It might be preferable, your Government feels, to omit in Article 1 the words “which have not been adjusted as a result of reference to the Permanent International Commission constituted pursuant to the Treaty signed at Washington December 18, 1913”8 This is the Treaty of Conciliation which, you will recall, became effective on exchange of ratifications March 10, 1928. Article 1 provides that all disputes between the two parties, “to the settlement of which previous arbitration treaties or agreements do not apply in their terms or are not applied in fact, shall, when diplomatic methods of adjustment have failed, be referred for investigation and report to a permanent International Commission.” Your Government appears to feel that this language may be inharmonious with the language of Article 1 of the proposed arbitration treaty, providing that justiciable disputes which it has not been possible to adjust by diplomacy and “which have not been adjusted as a result of reference to the Permanent International Commission” shall be submitted to arbitration and that it would be preferable to have the language of both conventions such as to require a stated arrangement for the invocation of investigation by commission or of arbitration, depending upon the nature of the dispute.

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While fully appreciative of your Government’s position, this Government doubts the necessity as well as the desirability of this change. The Treaty of 1913 should be read with the proposed treaty of arbitration. As this Government construes the language of the two instruments the remedies of conciliation and of arbitration exist side by side, indeed, but neither takes precedence over the other. The party which shall desire to invoke one of these remedies for the settlement of a particular dispute will always have the option of deciding which remedy it will propose. Either remedy may be proposed before the other provided, of course, that it is suitable under the treaties for the adjustment of the dispute.

This attitude of the Government of the United States is brought forth clearly in the recent treaties signed by this Government with the Government of Germany. The signature took place on the same day, May 5, 1928.9 Article I of the Conciliation Treaty provides that “any disputes … of whatever nature they may be, shall, when ordinary diplomatic proceedings have failed and the High Contracting Parties do not have recourse to adjudication by a competent tribunal, be submitted for investigation and report to a permanent International Commission.” Article 1 of the Arbitration Treaty provides that justiciable differences which have not been adjusted by diplomacy or “as a result of reference to an appropriate commission of conciliation,” shall be submitted to the Permanent Court of Arbitration at The Hague or to some other competent tribunal.

Although the language used in Article I of the Conciliation Treaty with the Netherlands differs somewhat from that in the Treaty with Germany, I consider that the construction of the two should be the same. Wherever the dispute is of such a character that it may be settled in accordance with the procedure laid down by either the Arbitration Treaty or the Conciliation Treaty the party proposing a settlement may also name the procedure. Of course, if the dispute is not justiciable, the remedy of conciliation alone is available.

I concur with the opinion of your Government that the expression “previous arbitration treaties or engagements” in Article 1 of the Treaty of 1913 refers to arbitration treaties which exist previous to the dispute referred to, not previous to the conciliation treaty.

In view of the foregoing statements it may appear to be a repetition for me to refer to the conclusions expressed on page 6 of the Legation’s aide-mémoire of June 27th, that differences arising after the conclusion of the new Arbitration Treaty and falling within its scope are excluded from the application of the procedure under the Conciliation Treaty of 1913. I may say, however, that I do not concur in that view, but, consider, as already stated, that if the question is justiciable recourse [Page 626] may be had to either the new Arbitration Treaty or the Conciliation Treaty of 1913.

(2) Your Government suggests the omission in Article 2 of the proposed treaty of the provision that the treaty shall not be invoked in respect of any dispute the subject matter of which “involves the interests of third parties.” I regard this exception as necessary. Of course, the interests of third parties referred to must be substantial interests. The mere possibility of some remote interest arising could not, as I view it, be made the ground for refusing to submit a dispute to arbitration. But I do not feel that, where there is a definite and substantial interest of a third party, the two parties to the proposed treaty of arbitration should be obligated to refer the dispute to an arbitration between themselves. If it is desirable to arbitrate the matter with the participation of a third party, there is nothing in the Convention to hinder in any way such resort to arbitration. Both the United States and the Netherlands are, happily, parties to the Convention for the Pacific Settlement of International Disputes concluded at The Hague on October 18, 1907.10 To this Convention a large number of the other governments of the world are also parties. Its remedy for the settlement of disputes remains open and might naturally be invoked in case of disputes among several countries all or any of which are parties to it. I believe that the obligation of the bilateral treaty should be confined to disputes which may arise between the two Governments parties to that treaty and that such obligation should cease where third parties have substantial interests in the dispute.

(3) With reference to the effective date of the treaty under consideration, you will recall, of course, that the treaty signed February 27, 1929,11 for the purpose of further extending the term of the treaty of 1908,12 has come into force and provides in Article I that the extension indicated is for one year from March 25, 1929, “or until within that period a new arbitration convention shall be brought into force” between the Parties. Accordingly, the language of the draft treaty as originally proposed by this Government, making the treaty effective “on the date of the exchange of the ratifications”, would seem to require no alteration.

(4) Your Government suggests that the term of the treaty shall be ten years and that thereafter it shall continue for periods of five years unless notice of termination is given. You will recall that in the present draft no specific term is stated but that the treaty runs [Page 627] on indefinitely unless it is terminated by either party on notice of one year. It is believed that the latter provision is preferable and this Government will be glad if your Government will accept the provision as contained in the draft.

In turning, now to your aide-mémoire No. 1333, dated May 9, 1929, I need hardly say that the foregoing detailed reply to your aide-mémoire No. 1949, dated June 27, 1928, must be regarded as suggesting the feeling on the part of this Government, that for the immediate future at least, your proposal that the Governments of the United States and the Netherlands model their arbitration treaty upon the general treaty of inter-American arbitration is impracticable. That treaty has not yet, so far as I am informed, received the ratification of any Government. The formula upon which is based the treaty proposed by the United States to the Netherlands has, on the other hand, been accepted in numerous cases and treaties based upon it are now in operation between the United States and Albania, Austria, Czechoslovakia, Denmark, Finland, France, Germany and Sweden.

In arriving at this conclusion, however, this Government has not failed to take note of the spirit of friendship and zeal for the advancement of arbitration which prompted your suggestion and I wish to express to you my cordial appreciation.

The slight alteration mentioned on page 6 of your aide-mémoire of May 9 will, of course, be made.

Accept [etc.]

J. Reuben Clark, Jr.