711.452/19

The Secretary of State to the British Ambassador (Lothian)

Excellency: With further reference to the Embassy’s note of December 30, 1938 conveying the acceptance of the Indian Government of this Government’s proposal of May 12, 1938 for the negotiation of a treaty of commerce and navigation between the United States and India, and with reference to the Embassy’s note of March 14, 19397 inquiring as to the status of this matter, I now have pleasure in transmitting herewith a draft of a treaty of establishment, commerce, navigation and consular rights between the United States of America and India.

As of possible assistance I wish to offer some comment on the various articles of this draft. Paragraph 1 of Article I provides that nationals of either country may enter the territories of the other country on the same terms as nationals of the most favored nation. While paragraph 8 of this Article reserves the operation of immigration laws specific provision is made by means of the proviso in that paragraph that nationals of each country may enter the other country to carry on trade between the two countries, or to engage in any activity related to or connected with the carrying on of such trade upon the same terms as nationals of the most favored nation. It is believed that the granting of this right, which is considered to be one of the important considerations in these negotiations, will meet the desire of the Indian Government that nationals of India shall have their rights to enter and reside in the United States to engage in international trade enlarged.

Other paragraphs of Article I deal with rights of nationals of either country within the territory of the other country. Paragraph 2 [Page 353]grants, on a most-favored-nation basis, rights to travel and reside and to engage in professional, commercial and other work. In this connection, it may be pointed out that paragraph 3 of Article XVI defines most-favored-nation treatment as treatment accorded to the most favored third country, including the United Kingdom of Great Britain and Northern Ireland.

Paragraph 3 of Article I deals with rights in connection with the acquisition, possession and disposition of immovable property. These provisions are practically identical with those embraced in Article 1 of the treaty of friendship, commerce and navigation between the United States and Siam, signed November 13, 1937.8 The provisions of the treaty with Siam were elaborated after considerable study, and as the Senate of the United States gave its advice and consent to the ratification of that treaty it is believed that the provisions would be accepted by the Senate if included in a treaty applicable to India. Three copies of the treaty with Siam are herewith enclosed.

The remaining paragraphs of Article I are practically identical with provisions in treaties now in force between the United States and several other countries, or differ only slightly from the provisions of those treaties.

Articles II to VI, inclusive, embrace, generally speaking, applications of the most-favored-nation principle in regard to commerce and the principle of national treatment in regard to navigation.

Article VII contains reservations with respect to the adoption of prohibitions or restrictions on the importation or exportation of certain articles and the adoption of neutrality measures and of sanitary measures.

Article VIII provides for most-favored-nation treatment in respect of the exploration for and exploitation of mineral resources. With respect to a specified list of resources, including oil, it provides for national treatment in the ownership of stock of domestic corporations. The proposed Article conforms to the United States Mineral Leasing Act, approved February 25, 1920 (41 Stat. 437). In drafting this Article the provisions of the British Petroleum (Production) Act of 1934 and Regulations, were kept in mind.

Article IX of the draft provides for both national and most-favored-nation treatment in connection with industrial and intellectual property.

The provisions of Articles X to XIV, inclusive, relate to consular officers. While it was not at first contemplated that the treaty would contain provisions relating to consular officers, this Government suggests that it is possible to deal briefly but adequately with this subject [Page 354]in the present treaty. The five articles concerning consular rights are entirely standard and may be found in many treaties now in force between the United States and other countries.

Provisions such as those embraced in Article XV of the draft treaty terminating the operation of the existing convention of commerce and navigation between the United States and Great Britain so far as it affects commerce, navigation and consular rights between the United States and India seem necessary.

Paragraph 1 of Article XVI relating to the territorial applicability of the treaty provides that the treaty shall extend, on the part of India, to India, including the Indian States. This Government would be desirous of extending to Burma the provisions agreed upon in respect of India in the same instrument if possible, or in another instrument, if necessary.

Your Excellency will note that Article XVII provides for an initial term of five years. This Government would be disposed to accept an initial ten-year term, but in any case would desire to make the commercial provisions terminable within a shorter period, and to stipulate that the termination of the commercial provisions would not impair the operation of the remainder of the treaty.

This Government will be pleased to be informed in the near future of the views of the Indian Government with respect to the enclosed draft. It is understood, of course, that either Government may introduce changes at any time during the course of the negotiations.

Accept [etc]

For the Secretary of State:
R. Walton Moore
[Enclosure]

Draft of a Treaty of Establishment, Commerce, Navigation and Consular Bights Between the United States of America and India

The President of the United States of America and His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas, Emperor of India, in respect of India, being desirous of strengthening the commercial and economic relations between the United States of America and India and of promoting friendly intercourse between the Governments and peoples of the two countries have resolved to conclude a Treaty of Establishment, Commerce, Navigation and Consular Rights applicable to the United States of America and India and for that purpose have appointed as their plenipotentiaries,

[Page 355]

The President of the United States of America:

and

His Majesty the King of Great Britain, Ireland and the British Dominions beyond the Seas, Emperor of India:

For India:

Who, having communicated to each other their full powers found to be in due form, have agreed upon the following Articles:

Article I

1.
The nationals of either country, upon conforming to the laws and regulations of the other country, may enter the territories of the other country on the same terms as nationals of the most favored nation.
2.
Nationals of either country within the territories of the other country may, upon the same terms as nationals of the most favored nation:
(a)
travel and reside,
(b)
engage in professional, scientific, religious, philanthropic, industrial, manufacturing, financial and commercial work of every kind, and
(c)
employ agents and employees of their choice.
3.
(a) In all that relates to the acquisition, possession and disposition of immovable property, the nationals of each country shall, in the territories of the other country, be subject exclusively to the applicable laws of the situs of such immovable property. The applicable laws of the situs of immovable property as herein used shall in reference to nationals of India be understood and construed to mean the laws applicable to immovable property in the state, territory or possession of the United States of America in which such immovable property is situated; and nothing herein shall be construed to change, affect or abrogate the laws applicable to immovable property in any state, territory or possession of the United States of America.
(b) It is expressly agreed that nationals of the United States of America, including partnerships, corporations, associations and other legal entities, who are legal residents of or are organized under the laws of any state, territory or possession of the United States of America which accords to nationals of India the right to acquire, possess and dispose of immovable property shall be accorded all the rights respecting immovable property in India which are or may hereafter be accorded to the nationals of the most-favored-nation.
(c) Nothing in either sub-paragraph (a) or sub-paragraph (b) of this paragraph shall be construed to affect the application of the provisions of the Convention relating to the Tenure and Disposition of [Page 356]Real and Personal Property between the United States of America and Her Majesty the Queen of the United Kingdom of Great Britain and Ireland, signed at Washington on March 2, 18999 to which notice of accession on behalf of India including the Native States was given June 30, 1902.
4.
The nationals of each country within the territories of the other country shall not be subjected to the payment of any internal fees, charges or taxes other or higher than those that are exacted of and paid by nationals of the country of residence.
5.
The nationals of each country shall enjoy freedom of access to the courts of justice of the other country as well for the prosecution as for the defense of their rights, and in all degrees of jurisdiction established by law.
6.
The nationals of either country shall receive within the territories of the other country, upon submitting to conditions imposed upon nationals of the latter country, the most constant protection and security for their persons and property, and shall enjoy in this respect that degree of protection that is required by international law. Their property shall not be taken without due process of law and without payment of prompt, just and effective compensation.
7.
In the manner of the exercise of any of the rights stipulated in this Article, the local law must be observed.
8.
Nothing contained in this Treaty shall be construed to affect existing statutes of either country relating to emigration or immigration or to the right of either country to enact statutes relating to these matters, provided, however, that nationals of each country may enter the other country to carry on trade between the two countries or to engage in any activity related to or connected with the carrying on of such trade upon the same terms as nationals of the most favored nation.

Article II

1.
The United States of America and India will grant each other unconditional and unrestricted most-favored-nation treatment in all matters concerning customs duties and subsidiary charges of every kind and in the method of levying duties, and, further, in all matters concerning the rules, formalities and charges imposed in connection with the clearing of goods through the customs, and with respect to all laws or regulations affecting the sale or use of imported goods within the country.
2.
Accordingly, articles the growth, produce or manufacture of either country imported into the other country shall in no case be subject to any duties, taxes or charges other or higher, or to any [Page 357]rules, formalities or method of levying duties, taxes or charges, other or more burdensome, than those to which the like articles the growth, produce or manufacture of any third country are or may hereafter be subject.
3.
Similarly, articles exported from the territory of the United States of America or India and consigned to the territory of the other country shall in no case be subject with respect to exportation to any duties, taxes or charges other or higher, or to any rules, formalities or method of levying duties, taxes or charges, other or more burdensome, than those to which the like articles when consigned to the territory of any third country are or may hereafter be subject.
4.
Any advantage, favor, privilege or immunity in regard to any duties, taxes, subsidiary or other charges, or method of levying them or in regard to any rules or formalities, which has been or may hereafter be granted by the United States of America or India to any article originating in any third country or consigned to the territory of any third country shall be accorded immediately and without compensation to the like article originating in or consigned to the territory of India or the United States of America, respectively, and irrespective of the nationality of the carrier.
5.
The stipulations of this Treaty regarding the treatment to be accorded by each country to the commerce of the other country do not extend:
(a)
to the advantages now accorded or which may hereafter be accorded by the United States of America, its territories or possessions or the Panama Canal Zone to one another or to the Republic of Cuba. The provisions of this paragraph shall continue to apply in respect of any advantages now or hereafter accorded by the United States of America, its territories or possessions or the Panama Canal Zone to one another, irrespective of any change in the political status of any of the territories or possessions of the United States of America;
(b)
to any advantages which are, or may in the future be accorded by either country to purely border traffic within a zone not exceeding ten miles (15 kilometers) wide on either side of the customs frontier;
(c)
to any advantages in customs matters which are, or may in the future be accorded to countries in customs union with either country so long as such advantages are not accorded to any third country.

Article III

1.
No prohibition or restriction of any kind shall be imposed by the Government of either country on the importation of any article the growth, produce or manufacture of the other country or upon the exportation of any article destined for the other country, unless the importation of the like article the growth, produce or manufacture [Page 358]of all third countries, or the exportation of the like article to all third countries, respectively, is similarly prohibited or restricted.
2.
If the Government of either country imposes any restriction or limitation upon the importation of any article in which the other country has an interest, or regulates the importation of any such article by means of import licenses or permits, it shall establish in advance, and, upon request, shall inform the Government of the other country of, the total quantity of such articles permitted to be imported during a specified period.
3.
If the Government of either country regulates the importation of any article in which the other country has an interest either as regards the total quantity permitted to be imported or the quantity permitted to be imported at a specified rate of duty, and if a share is allotted to any third country, a share shall be allotted to the other country equivalent to the proportion of the total importation of such article supplied by that country during a previous representative period, unless it is mutually agreed to dispense with such allotment.
4.
If the Government of either country establishes or maintains any form of control of the means of international payment, it shall accord unconditional most-favored-nation treatment to the other country in this matter. It is agreed, further, that such control shall be administered so as not to influence to the disadvantage of the other country the competitive relationships between articles originating in that country and similar articles originating in third countries, and so as not to impair the operation of any other provisions of this Treaty.

Article IV

1.
In the event that either country establishes or maintains a monopoly for the importation, production or sale of any article, or grants exclusive privileges, formally or in effect, to any agency to import, produce or sell any article, the country establishing or maintaining such monopoly, or granting such monopoly privileges, agrees that in respect of the foreign purchases of such monopoly or agency, the commerce of the other country will be accorded fair and equitable treatment. To this end it is agreed that in making its foreign purchases of any article such monopoly or agency will be influenced solely by considerations such as price, quality, marketability and terms of sale, which would ordinarily be taken into account by a private commercial enterprise interested solely in purchasing the article on the most favorable terms.
2.
Each country, in the awarding of contracts for public works and generally in the purchase of supplies, shall accord fair and equitable [Page 359]treatment to the commerce of the other country as compared with the treatment accorded to the commerce of third countries.

Article V

1.
Vessels of the United States of America shall enjoy in India and Indian vessels shall enjoy in the United States of America the same treatment as national vessels or vessels of the most favored third country.
2.
The coasting trade of the two countries shall be exempt from the foregoing provision and from the other provisions of this Treaty, and shall be regulated according to the laws of each country in relation thereto. It is agreed, however, that with respect to the coasting trade vessels of either country shall enjoy within the territory of the other country the most-favored-nation treatment.
3.
Vessels under the flag of either country shall be permitted to discharge portions of cargoes at any port open to foreign commerce in the territories of the other country, and to proceed with the remaining portions of their cargoes to any other ports of such territories open to foreign commerce, and to unload portions of their cargoes at such ports, without paying other or higher tonnage dues or port charges than would be paid by national vessels or vessels of the most favored nation in like circumstances, and they shall be permitted to load in like manner at different ports in the same voyage outward.

Article VI

The nationals and goods of each country within the territories of the other country shall receive the same treatment as nationals and goods of the latter country or of any third country with regard to internal taxes, transit duties, charges in respect of warehousing and other facilities and the amount of drawbacks.

Article VII

1.
Subject to the requirement that, under like circumstances and conditions, there shall be no arbitrary discrimination by either country against the other country in favor of any third country, the provisions of this Treaty shall not extend to prohibitions or restrictions (1) imposed on moral or humanitarian grounds; (2) designed to protect human, animal or plant life or health; (3) relating to prison-made goods, or (4) relating to the enforcement of police or revenue laws.
2.
Nothing in this Treaty shall be construed to prevent the adoption or enforcement of measures (a) relating to the importation or exportation of gold or silver; (b) relating to the control of the export or sale for export of arms, ammunition, or implements of war, and, in exceptional circumstances, all other military supplies, or (c) relating to neutrality.
[Page 360]

Article VIII

The nationals of each country shall enjoy in the territories of the other country, upon compliance with the conditions there imposed, most-favored-nation treatment in respect of the exploration for and exploitation of mineral resources. In respect of the ownership of stock in domestic corporations engaged in the exploration for and exploitation of coal, phosphate, oil, oil shale, gas and sodium on the public domain, the nationals of each country shall enjoy within the territories of the other country, on condition of reciprocity, and upon compliance with the conditions there imposed, all the rights and privileges now or hereafter granted to the nationals of the latter country. It is understood, however, that neither country shall be required by anything in this article to grant any application for any such right or privilege if at the time such application is presented the granting of all similar applications shall have been suspended or discontinued.

Article IX

The nationals of either country shall have in the territories of the other country the same rights as nationals of the latter country with respect to patents for inventions, trade-marks, trade-names, designs and copyright in literary and artistic works. In no case shall such treatment be less favorable than that accorded to nationals of the most favored nation.

Article X

1.
Each country will receive from the other country, consular officers in those of its ports, places and cities, where it may be convenient and which are open to consular representatives of any third country.
2.
Consular officers of each country shall, after entering upon their duties, enjoy reciprocally in the territory of the other country all the rights, privileges, exemptions and immunities which are enjoyed by officers of the same grade of the most favored nation. As official agents, such officers shall be entitled to the high consideration of all officials, national or local, with whom they have official intercourse in the country which receives them.

Article XI

1.
Consular officers, including employees in a consulate, nationals of the country by which they are appointed, other than those engaged in private occupations for gain within the country where they exercise their functions, shall be exempt from all taxes, National, State, Provincial and Municipal, except taxes levied on account of the possession or ownership of immovable property situated in, or income derived from property of any kind situated or belonging in the territories of the country in which they exercise their functions. All consular officers [Page 361]and employees, nationals of the country appointing them, shall be exempt from the payment of taxes on the salary, fees or wages received by them in compensation for their consular services.
2.
The exemptions of the foregoing paragraph shall apply equally to officials who are duly appointed by the Government of one of the countries to exercise essential governmental functions in the territory of the other country, provided that such officials shall be nationals of the country appointing them and shall not be engaged in private occupations for gain in the country in which they exercise their functions. The Government of the country appointing them shall communicate to the Government of the other country satisfactory evidence of the appointment and shall indicate the character of the service of the officials to whom the exemptions of this Article are intended to apply.
3.
The Government of each country shall have the right to acquire and own land and buildings required for diplomatic or consular premises in the territory of the other country and also to erect buildings in such territory for diplomatic or consular use subject to local building regulations.
4.
Lands and buildings situated in the territory of either the United States of America or India, of which the Government of the other country is the legal or equitable owner and which are used exclusively for governmental purposes by that owner, shall be exempt from taxation of every kind, National, State, Provincial and Municipal, other than assessments levied for services or local public improvements by which the premises are benefited.

Article XII

1.
The Government of the United States of America and the Government of India, respectively, will permit the entry free of all duty and without examination of any kind, of all furniture, equipment and supplies intended for official use in the consular offices of the other country, and will extend to such consular officers of the other country and their families and suites as are its nationals, the privilege of entry free of duty of their baggage and all other articles for personal use, including automobiles, spare parts and equipment for automobiles and fuels used in operating automobiles, whether accompanying the officer, his family or suite, to his post or imported at any time during his incumbency thereof; provided, nevertheless, that no article, the importation of which is prohibited by the law of either country may be brought into its territories.
2.
The exemptions of the foregoing paragraph shall apply equally to officials who are duly appointed by the Government of one of the countries to exercise essential governmental functions in the territory [Page 362]of the other country, provided that such officials shall be nationals of the country appointing them and shall not be engaged in private occupations for gain in the country in which they exercise their functions. The Government of the country appointing them shall communicate to the Government of the other country satisfactory evidence of the appointment and shall indicate the character of the service of the officials to whom the exemptions of this Article are intended to apply.
3.
It is understood, however, that the privileges provided in this Article shall not be extended to officers who are engaged in any private occupation for gain in the countries where they exercise their functions, save with respect to governmental supplies.

Article XIII

1.
In case of the death of a national of either the United States of America or India in the territory of the other country without having in the locality of his decease any known heirs or testamentary executors by him appointed, the competent local authorities shall at once inform the nearest consular officer of the country of which the deceased was a national of the fact of his death, in order that necessary information may be forwarded to the parties interested.
2.
In case of the death of a national of either the United States of America or India without will or testament whereby he has appointed testamentary executors, in the territory of the other country, the consular officer of the country of which the deceased was a national and within whose district the deceased made his home at the time of death, shall, so far as the laws of the country permit and pending the appointment of an administrator and until letters of administration have been granted, be deemed qualified to take charge of the property left by the decedent for the preservation and protection of the same. Such consular officer shall have the right to be appointed as administrator within the discretion of a tribunal or other agency controlling the administration of estates provided the laws of the place where the estate is administered so permit.
3.
Whenever a consular officer accepts the office of administrator of the estate of a deceased countryman, he subjects himself as such to the jurisdiction of the tribunal or other agency making the appointment for all necessary purposes to the same extent as a national of the country where he was appointed.

Article XIV

1.
A consular officer shall have exclusive jurisdiction over controversies arising out of the internal order of private vessels of his country, and shall alone exercise jurisdiction in cases, wherever arising, [Page 363]between officers and crews, pertaining to the enforcement of discipline on board, provided the vessel and the persons charged with wrongdoing shall have entered a port or place within his consular district. Such an officer shall also have jurisdiction over issues concerning the adjustment of wages and the execution of contracts relating thereto provided, however, that such jurisdiction shall not exclude the jurisdiction conferred on local authorities under existing or future laws.
2.
When an act committed on board of a private vessel under the flag of the country by which the consular officer has been appointed and within the territories or territorial waters of the country to which he has been appointed constitutes a crime according to the laws of that country, subjecting the person guilty thereof to punishment as a criminal, the consular officer shall not exercise jurisdiction except in so far as he is permitted to do so by the local law.
3.
A consular officer may freely invoke the assistance of the local police authorities in any matter pertaining to the maintenance of internal order on board of a vessel under the flag of his country within the territories or territorial waters of the country to which he is appointed, and upon such a request the requisite assistance shall be given.
4.
A consular officer may appear with the officers and crews of vessels under the flag of his country before the judicial authorities of the country to which he is appointed for the purpose of observing the proceedings or of rendering assistance as an interpreter or agent.

Article XV

The present Treaty shall, from the day on which it comes into force, supplant the provisions relating to navigation, trade and commerce applicable in respect of the United States of America and India in Article III of the Convention of Commerce and Navigation between the United States of America and His Britannic Majesty, concluded at London July 3, 1815, and likewise the provisions of Article IV of the said convention in so far as concerns the appointment of consular officers by the United States of America to reside in India.

Article XVI

1.
The present Treaty shall apply, on the part of the United States of America to all territory subject to its sovereignty or authority, except the Panama Canal Zone and shall include the Philippine Islands so long as the United States of America maintains its sovereignty or authority over those Islands. The present Treaty shall apply, on the part of India, to India, including the Indian States.
2.
The term “nationals” as used in this Treaty in Article I, paragraph 2 (b), except as to professional work, 2 (c), 3 (a), 3 (b), 4, 5 and 6; Article VI; Article VIII and Article IX, shall be deemed to include natural persons, partnerships, corporations, associations, and other legal entities.
3.
The term “most favored nation” as used in this Treaty shall be construed to mean the most favored third country, including the United Kingdom of Great Britain and Northern Ireland.

Article XVII

1.
The present Treaty shall take effect in all of its provisions on the day of the exchange of ratifications, and shall continue in force for the term of five years from that day.
2.
Unless at least one year before the expiration of five years from the day on which the present Treaty shall come into force, the Government of the United States of America or of His Majesty notifies to the other Government an intention of terminating the Treaty upon the expiration of the aforesaid period of five years, the Treaty shall continue in full force and effect after the aforesaid period and until one year from such a time as either Government shall have notified to the other Government an intention of terminating the Treaty.

Article XVIII

The present Treaty shall be ratified, and the ratifications thereof shall be exchanged at . . . . . . . as soon as possible.

In witness whereof the respective Plenipotentiaries have signed the present Treaty and have affixed their seals thereto.

Done in duplicate at . . . . . . . this. . . . . . . day of . . . . . . .

  1. Not printed.
  2. Department of State Treaty Series No. 940, or 53 Stat. 1731. For correspondence regarding negotiations, see Foreign Relations, 1937, vol iv, pp. 825 ff.
  3. Foreign Relations, 1916, p. 287.