Foreign Relations of the United States Diplomatic Papers, 1937, The British Commonwealth, Europe, Near East and Africa, Volume II

783.003/197

The Secretary of State to the Minister in Egypt (Fish)

Washington, March 30, 1937.

Sir: 1. Referring to previous instructions regarding your designation as American Delegate at the Conference for the Revision of the Capitulations in Egypt to be held at Montreux beginning April 12, 1937, I take pleasure in informing you of the general nature of this Government’s policy with respect to the proposed termination of the capitulatory régime in Egypt.

2. First of all I conceive it to be self-evident that the capitulatory régime in Egypt is an institution which we must acknowledge to be no longer in accordance with the spirit of the times nor essential for the effective protection of legitimate American interests in Egypt. The termination of that régime, under proper provisional safeguards, is moreover in accordance with the fixed policy of this Government, often repeated, of establishing its relations with foreign countries on a basis of friendship, in accordance with the precepts of modern international law, and without seeking to obtain for American nationals or interests any special privileges or favors.

3. In approaching the problems which will be raised at the Conference I desire you, therefore, to adopt a sympathetic and liberal attitude toward the aspirations of the Egyptian Government. At the same time you will, of course, endeavor to obtain such guarantees and safeguards as may be considered essential for the proper protection of American interests, particularly with respect to the proposed reform of the Mixed Tribunals. It is my view, however, that the American Delegation should avoid taking the lead in discussing the various problems which will arise at the Conference. I am sure that this policy will commend itself to you since it is strictly in accordance with the attitude which this Government has long adopted with respect to Egyptian matters and is in consonance with the relative unimportance of American interests in Egypt. The maintenance of such a policy, taken in conjunction with the known absence of American political interests in Egypt, will, I believe, place the American Delegation in a position to assist in reconciling divergent points of view and thus contribute to the successful termination of the Conference.

4. At some appropriate moment during the early meetings of the Conference you may make a statement along the lines of the attached draft (Enclosure A), making such minor alterations therein, without changing materially the substance, as may be required by the atmosphere of the Conference and current developments.

5. It is my understanding that an effort will be made at the Conference to provide for the use of English as one of the official languages. You will, of course, give such a proposal your full support.

6. Of the strictly capitulatory privileges which the Egyptian Government desires to terminate one of the most important is that which requires the formal consent of the Capitulatory Powers to the taxation of their nationals. The treaty basis for this privilege appears to be vague and it seems probable that the Powers acquired the rights to a large extent, by custom and usage. Moreover, on several occasions this Government has consented to the application to American nationals of specific taxation by the Egyptian Government. In view of these circumstances no objection is perceived to the surrender by this Government, at the same time similar surrender is made by all the other Capitulatory Powers, of the privilege of requiring that its consent be obtained before Egyptian taxes are levied upon American nationals. At the appropriate moment during the proceedings of the Conference you are authorized to make a declaration to that effect. A draft of such declaration is enclosed (Enclosure B) for your use. In the event the Egyptian Delegation expresses a desire to receive a written statement covering this point you are authorized to furnish such a statement in accordance with the attached draft.

7. In connection with the proposed surrender of the right of American nationals to exemption from Egyptian taxation except upon the consent of this Government, your attention is invited to paragraph 6 of the Annex to Article 13 of the Anglo-Egyptian Treaty of August 26, 1936, wherein the Egyptian Government gave its assurance that no Egyptian legislation made applicable to foreigners, with particular reference to legislation of a fiscal character, would discriminate against foreigners or foreign corporate bodies. You will recall that a similar assurance was contained in the Egyptian Circular Note of January 16, 1937, and referred to in the Department’s telegram of February 13, 1937, accepting the invitation of the Egyptian Government to attend the Conference at Montreux. Particular importance is attached to obtaining a further reaffirmation of this assurance by incorporating it in the proposed multilateral convention, and I desire you to exert your best efforts to that end.

8. Another capitulatory right which the Egyptian Government is understood to be desirous of terminating is that with respect to the domiciliary visit of capitulatory nationals and inviolability of the capitulatory national’s domicile. American nationals long enjoyed this privilege under the most-favored-nation clause of the American-Ottoman Treaty of 1830 and the right was specifically reaffirmed by the American-Ottoman Protocol of August 11, 1874. According to Scott (The Law Affecting Foreigners in Egypt, James Harry Scott, Edinburgh, 1908; pp. 155–156), this privilege is granted most clearly in Article 70 of the French Capitulation of 1740,²⁴ reading in translation as follows:

“Agents of justice and officers of my Sublime Porte, as well as police, may not, except in case of necessity, enter by force a house where a Frenchman resides; and in case such entry is required, the ambassador or the consul will be advised, in those places where there are such officials, and the place in question will be visited with the persons delegated on their behalf; and if anyone contravenes this provision, he will be punished.”

9. Inasmuch as the right of inviolability of domicile is derived from our treaty with Turkey it cannot be definitely surrendered except by a formal treaty with Egypt. It is assumed that provision for such surrender will be made in the proposed multilateral convention. However, if the Egyptian Government insists upon the suspension of such right pending the entrance into force of the proposed convention, and under such safeguards as may be agreed upon (as, for example, an arrangement that the foreigner’s domicile may be visited only by the proposed judicial police) you are authorized to declare that the United States will suspend its right in this regard until such time as the proposed Convention has come into force, upon the understanding that a similar suspension, or a complete surrender of the right, will be made simultaneously by all the other Capitulatory Powers. A draft declaration in this sense is enclosed for your use (Enclosure C). In the event the Egyptian Delegation requires this declaration to be made in written form you are authorized to furnish such a written statement.

11. [sic] It is assumed that the Egyptian Government will propose the abrogation of the Khedivial Decree of January 31, 1889,²⁵ and the Law of November 11, 1911,²⁶ conferring certain legislative powers on the General Assembly of the Mixed Court of Appeals and upon the so-called Legislative Assembly of that body. You are authorized to state that your Government will raise no objection to the abrogation of these acts, insofar as the United States is concerned, to the extent that, and at the same time as, similar abrogation is agreed upon by the other Capitulatory Powers.

12. In the event the question should be raised as to the termination or suspension of other capitulatory rights, derived not from treaties but from custom and usage, you are authorized to declare the willingness of the United States Government to suspend the exercise of such rights, pending the entrance into force of the multilateral convention, to the extent that, and at the same time as, those rights are suspended or terminated by the other Capitulatory Powers.

13. From reports received from the Legation at Cairo as well as from the Embassy at London and other sources, it appears to be the intention of the Egyptian Government to propose the signature at Montreux of an instrument regulating the Mixed Court régime, which, though it will be an annex to the proposed multilateral convention, will be an integral part thereof. It is apparently the desire of the Egyptian Government that this proposed “statute for the organization of the Mixed Courts” become effective on October 15, 1937, whether or not the multilateral convention of which it forms an annex has by that date been ratified and come into force. In order to accomplish this it is proposed that a special protocol be signed providing that the statute for the organization of the Mixed Courts shall be effective provisionally on October 15, 1937, pending the ratification of the multilateral convention.

14. It is apparent that the signature by the United States of such a protocol would bring into force an integral portion of the multilateral convention. Such action, if taken prior to the entrance into force of the latter instrument, would be clearly contrary to American constitutional practice. Although this Government has no objection to the signature of the proposed protocol by the other Powers, it cannot authorize you to sign such an instrument.

15. Although this Government is obliged to take the position outlined it is anxious to avoid appearing obstructive in this matter or of giving an excuse to other Powers, not similarly bound by constitutional restrictions, to insist upon a delay and thus possibly jeopardize the successful outcome of the Conference. Under the circumstances it is proposed to meet the exigencies of the situation, insofar as American nationals are concerned, in a practical manner. Accordingly, the approval of the President has been obtained to the temporary suspension, pending final action on the proposed multilateral convention, of extraterritorial jurisdiction over American nationals by American consular officers in Egypt and the transfer of such jurisdiction, under such arrangements as may be made at the Conference, to the Mixed Courts. This action would be taken under the authority conferred on the President by the Act of March 23, 1874. Accordingly, at the appropriate time you are authorized to inform the Egyptian Delegation that, if and when substantially similar action is agreed upon by the other Powers, this Government is prepared to suspend the exercise of extraterritorial jurisdiction over American nationals by American consular and diplomatic officers in Egypt, to the extent that such extraterritorial jurisdiction is abridged or terminated in accordance with the decisions of the Conference. If a written assurance in this matter is requested by the Egyptian Delegation you may furnish such assurance in accordance with the enclosed draft (Enclosure D).

16. With respect to the attitude to be adopted by the American Delegation toward the proposals outlined in the Egyptian Government’s circular note of February 3, 1937, you will be guided by the considerations set forth in the accompanying memorandum (Enclosure E).²⁷ This memorandum will also furnish you guidance on other questions likely to arise at the Conference respecting the alteration and amendment of the Règlement d’Organisation Judiciaire and certain other matters of a subsidiary nature. If questions arise in connection with other matters of an important character, not covered by the present instruction or by the accompanying memorandum, you will of course seek the Department’s views before taking any final action.

17. You are authorized to sign on behalf of this Government the proposed multilateral convention with the annexed revised Règlements d’Organisation Judiciaire, provided those documents embody the essential provisions set forth in the present instruction and accompanying memoranda, or in such further instructions as may subsequently be given to you.

18. I am confident that you will use your best endeavors to bring the Conference to a successful conclusion and that the results of your negotiations will serve further to increase the friendly relations existing between the United States and Egypt.

Very truly yours,

Cordell Hull

[Enclosure A]

Draft Statement

On behalf of the President of the United States I take great pleasure in expressing to His Excellency the Chairman of the Delegation of the Royal Egyptian Government the satisfaction with which my Government responded to the invitation of the Royal Government to participate in a Conference of the Capitulatory Powers for the revision of the extraterritorial régime in Egypt, including provision for the institution of a transitional period for the Mixed Court régime.

My Government accepts it as a happy augury for the success of this Conference that the Royal Egyptian Government, as one of its first international acts following the exchange of ratifications of the Anglo-Egyptian Treaty of Friendship and Alliance, chose to seek a revision of its international obligations through friendly negotiation with the interested Powers.

In conformity with that purpose the Royal Egyptian Government graciously extended an invitation to my Government and the Governments of the other Powers exercising capitulatory rights in Egypt to be represented at this Conference to consider the revision of those rights. The Royal Government has proposed specifically the establishment of a provisional régime for the Mixed Tribunals at the conclusion of which the jurisdiction now exercised by them, as well as that which it is proposed to transfer to them, will be delegated to the National Courts. Such a gradual transfer of jurisdiction as is proposed is, in the opinion of my Government, likely to cause the minimum of disturbance and unsettlement to the Egyptian and other interests which will be affected.

The policy of the Good Neighbor which the President of the United States has announced as that which my Government would pursue in its international relationships would in itself have disposed my Government to regard most sympathetically the announced purposes of the Royal Egyptian Government. When to these considerations there is added, in evidence of the Royal Egyptian Government’s attachment to the orderly processes of international law, the resort of that Government to friendly negotiation for the revision of obligations which have come to bear more and more heavily upon it, the Government of the United States is prompted to give the most unequivocal assurances of the sympathy with which it regards the aims and purposes of this Conference.

In conformity with that spirit I am authorized by the President of the United States to announce to the Delegation of the Royal Egyptian Government, and my colleagues of the Delegations of the Capitulatory Powers, that the Government of the United States will seek in the revision of the extraterritorial régime in Egypt, including the establishment of a transitional period for the Mixed Courts, no exclusively national interests. It will have regard rather for the mutual interests of all the Powers concerned, including in particular, of course, those of the Government most concerned, Egypt.

As regards the Mixed Courts, it should be manifestly in the interest of Egypt, as of the Capitulatory Powers, that in the agreement to be concluded provision be made for a transitional régime for those Courts which will occasion the least disturbance to Egyptian, no less than to the foreign, interests involved. My Government’s paramount interest is in the insurance of the competent administration of justice which has characterized the Egyptian Mixed Courts since their foundation.

The American Delegation will be guided in its proposals and in its discussions solely by the considerations which I have set forth. It is in this spirit that the American Delegation approaches the work of the revision of the extraterritorial régime in Egypt, confident that the work of the Conference will be brought to a successful conclusion.

[Enclosure B]

Declaration Concerning Financial Capitulations

The Government of the United States declares that pending ratification on its part of the Convention, it will refrain from exercising its right to object to the taxation by the Egyptian Government of American nationals and corporations in Egypt, provided such taxes shall not be different or higher than those that are exacted of and paid by Egyptian nationals and corporations, and provided further that such taxes shall be applicable to all foreigners and foreign corporations on the basis of absolute equality.

[Enclosure C]

Declaration Concerning Domiciliary Visits

The Government of the United States declares that pending ratification on its part of the Convention, it will refrain from exercising its right to object to domiciliary visits of its nationals in Egypt by agents of the Egyptian Government provided such agents shall be members of the judicial police set up in accordance with Article . . of the Convention and such visits shall take place under the conditions specified in Article . . of the amended Statute of the Courts and provided further that all other foreigners in Egypt without exception shall be subject to such domiciliary visits.

[Enclosure D]

Declaration Concerning Consular Jurisdiction

The Government of the United States declares that pending the ratification on its part of the Convention it will suspend the extraterritorial jurisdiction of its consular and diplomatic officers in Egypt over American nationals and corporations provided the other Capitulatory Powers agree at the same time and under the same conditions to suspend the extraterritorial jurisdiction in Egypt of their consular and diplomatic officers over their nationals and corporations.

24. For text, see Le Baron I. de Testa, Recueil des traités de la Porte Ottomane avec les puissances étrangéres depuis le premier traité conclu, en 1536, entre Suléyman I et François I jusqu’à nos jours (Paris, 1864), vol. i, p. 186.
25. For French text, see J. A. Wathelet and R. G. Brunton, Codes Egyptiens et Lois Usuelles en vigueur en Egypte (4th ed., 1936), p. 25.
26. Law No. 17 of 1911, or article 12 of the Civil Code for the Mixed Courts, Ibid., p. 39.
27. Not printed.