884.512 Consumption/34

Memorandum by the Chief of the Division of Near Eastern Affairs (Murray)

Count Marchetti, Counselor of the Italian Embassy, came to see me on July 30th, stating that the Embassy had been instructed to ascertain [Page 231]whether this Government intended to make any protest to the Ethiopian Government as a result of the new excise tax which has recently been enforced in Ethiopia. I told Count Marchetti that the Department had no such intention and had so informed our Minister at Addis Ababa.

Count Marchetti then inquired as to this Government’s attitude with respect to the possible denunciation of the Klobukowski Treaty, which is the basis of foreign capitulatory rights in Ethiopia. I told Count Marchetti that we were disposed to show every leniency to the Ethiopians in fiscal matters and that therefore we would be prepared to agree to any modification of Article 3 of the above-mentioned Treaty which limits the freedom of action of Ethiopia in tariff matters. It seemed to us wise, I said, to make the above concessions to the Ethiopians in order to preserve as far as possible the rest of the Klobukowski Treaty covering the Capitulations. I reminded him that the position of the Powers disposed to protest the new excise duties on the ground that they were in violation of the Klobukowski Treaty, was very weak inasmuch as provision is made in the Treaty itself for denunciation on twelve months’ notice; therefore, any protest made by the Powers to the Ethiopians might, instead of accomplishing the objective of the Powers, merely result in the denunciation of the Treaty as a whole, which would leave us all without any specified capitulatory rights in the country.

Count Marchetti said that his Government’s views with regard to the Capitulations in Ethiopia coincided entirely with our own, but that his Government was now apparently in agreement with the French that it would be inconsistent to discuss with the Ethiopians a modification of Article 3 of the Klobukowski Treaty without protesting a violation of that Article, which had already taken place. I remarked that in my opinion there would be little satisfaction in having made a protest in this matter if by doing so all of us lose the benefits of the Treaty as a whole in case of denunciation.

Wallace Murray