Siamese Government in position to impose drastic restrictions upon the right of American nationals to acquire, possess and dispose of immovable property in Siam and Siam could, within the language of the Siamese counterproposal, maintain the present unsatisfactory situation with regard to land tenure by Americans or render it even more unsatisfactory. In addition, the explanatory exchange of notes suggested by the Siamese Government would make it clear how limited are the rights to be accorded but this would not guarantee that American nationals would be given equality of treatment with other foreign nationals which is of importance to this Government. The Department has given long and careful study to devising a remedy for the present admittedly unsatisfactory situation in a way which would take account of special factors in both the United States and in Siam.

The Department notes from your telegram under reference that the Siamese are afraid of unconditional most-favored-nation treatment in regard to land and that the Siamese Government is not in position to grant American nationals in Siam most-favored-nation treatment in regard to immovable property except on condition of reciprocity.

With a view to meeting the Siamese apprehension with regard to unconditional most-favored-nation treatment, the Department agrees to the deletion of the word "unconditionally" in proposal paragraph 2 (6) of its telegram 31, November 5, 7 p. m.

With regard to the question of reciprocity, the Department points out that proposal 2 (b) is based definitely on the principle of reciprocity. That proposal provides that nationals of certain states which accord to nationals of Siam rights with regard to immovable property shall be accorded most-favored-nation rights in Siam with regard to immovable property. Those states in the United States which do not grant such rights to Siamese nationals are excluded from the operation of the most-favored-nation provision. Should any states subsequently remove such rights in regard to the owning of immovable property by Siamese, Siam would thereby ipso facto be relieved from the obligation to accord most-favored-nation treatment to Americans residents of those states. In the large majority of the states and over an area many times that of Siam Siamese nationals enjoy rights in respect to immovable property. Special attention is invited to the fact that under proposal 2 (b) Siam would be offering merely mostfavored-nation treatment in return for national treatment accorded by the majority of states of the United States to nationals of Siam.

In view of the foregoing, the Department finds it difficult to understand why the Siamese Government objects to granting to American nationals that most-favored-nation treatment which it is prepared to grant to nationals of third states, and the Department is of the opinion

that the objection of the Siamese Government formulated in counterproposal 1 as quoted in your telegram under reference is based upon misconception as to the basis and purport of this Government's proposal 2 (b).

You should, therefore, explain the situation to the Siamese Government and urge upon it in the strongest possible terms the acceptance of the proposal set forth in the Department's telegram 31, November 5,7 p. m., paragraph 2 (b).

The provision in the treaty with regard to immovable property would then consist of the first paragraph comprising two sentences as quoted in the Department's telegram 24, November 1, 6 p. m., and of a second paragraph consisting of the statement quoted in the Department's telegram 31, November 5, 7 p. m., paragraph 2 (b) with the deletion of the word "unconditionally".

With regard to exchange of notes with respect to clarification of existing real property rights, you should continue to be guided by paragraphs 5 and 6 of the Department's telegram 31, November 5, 7 p. m.

WELLES

711.922/107: Telegram

The Minister in Siam (Neville) to the Secretary of State

BANGKOK, November 8, 1937-8 p. m. [Received November 8-10:30 a. m.]

37. Department's 33, November 7, 9 p. m. Siamese will accept proposal 2 (b) with the addition after "most favored nation" of the words "upon the principle of reciprocity" at the end, or will accept the proposal if it is altered to read "It is expressly agreed that nationals of the United States of America, including corporations, partnerships and associations, 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 Siam the right to acquire, possess and dispose of immovable property, shall be accorded the right to acquire, possess and dispose of immovable property in Siam, upon the principle of non-discriminatory treatment". The Minister informed me that the idea of reciprocity must in some way be conveyed in order to comply with the Cabinet's instructions.

With regard to the exchange of notes the Siamese would like to omit the wording "which is considered an integral part of the treaty" [which will?] require submission to the Assembly, and instead refer specifically to the article of the treaty concerned in each case. The Minister insists that the Cabinet has power to bind the Government, and that interpretative phrases or declarations of policy [do not

require?] legislative approval. So far as the real property exchange is concerned, the Siamese would like the new paragraph to read as follows: "With respect to lands of which American nationals, partnerships, corporations or associations are the rightful owners, whether or not they now possess papers of any kind, they may apply to have title papers issued in the regular way." The rest of the letter would follow the exchange of 1920 except that the opening paragraph would refer to real property held by Americans, rather than by American missionary societies, and that paragraph 3 would be omitted.

If the foregoing arrangements are acceptable, am I to proceed as indicated in the last paragraph of Department's 29, November 4, 1 p. m.

NEVILLE

711.922/107: Telegram

The Acting Secretary of State to the Minister in Siam (Neville)

WASHINGTON, November 9, 1937-6 p. m.

34. Your No. 37, November 8, 8 p. m.

1. Department believes that we are in agreement with the Siamese, and that they mean to accord complete most-favored-nation treatment automatically to nationals of states which permit them to own land. However, the language in the telegram under reference is ambiguous. "Upon the principle of reciprocity" may be open to the interpretation that the Siamese could insist on all our states according them the right to own land. It is also open to the objection of inaccurately describing the situation, inasmuch as Siamese enjoy national treatment in the majority of our states and in return, we would be getting only most-favored-nation treatment. "Upon the principle of nondiscriminatory treatment" is ambiguous inasmuch as it may mean national as well as most-favored-nation treatment. Neither does it assure that Siam will automatically give our citizens complete mostfavored-nation treatment, inasmuch as it may be interpreted by the Siamese to enable them to deny Americans full equality of treatment as against other foreign nationals on the ground that the treatment accorded to Siamese by third countries is deemed by the Siamese more favorable than that which they receive in the United States.

2. The Department desires to avoid all ambiguities and sources of possible future misunderstanding. It believes that the language set forth in Department's No. 31 of November 5, 7 p. m., achieves this result and as pointed out in Department's No. 33 of November 7, 9 p. m., embodies the principle of reciprocity. However, with a view toward meeting the Siamese desire that this concept be explicitly referred to, you are authorized to propose the insertion of the words

"in return" between the words "shall" and "be accorded" in paragraph 2 (b) of Department's telegram No. 31 of November 5, 7 p. m.

3. The real property provisions for the treaty would then be as follows: First two sentences of first paragraph quoted in Department's No. 24 of November 1, 6 p. m. Then add the following: "It is expressly agreed that nationals of the United States of America including corporations, partnerships and associations, 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 Siam the right to acquire, possess, and dispose of immovable property, shall in return be accorded all the rights respecting immovable property in Siam which are or may hereafter be accorded to the nationals, including corporations, partnerships, or associations of the most-favored-nation."

4. Department accepts Siamese proposal with reference to exchange of notes as to real property both with respect to introduction and substance.

5. As to exchange of notes on monopolies, Department must insist upon retaining the introductory statement contained in Department's No. 30 of November 4, 7 p. m., in view of the fact that Article 4 of treaty relating to monopolies has been deleted.

6. You are authorized to sign, subject to the foregoing.

WELLES

711.922/109: Telegram

The Minister in Siam (Neville) to the Secretary of State

BANGKOK, November 10, 1937-7 p. m. [Received November 10-10:53 a. m.]

38. Department's 34, November 9, 6 p. m. The Minister for Foreign Affairs today handed me the following memorandum:

"Counter-proposal 1. Immovable property. The Siamese Government accept the insertion of the words 'in return' between the word 'shall' and the word 'be'.

Instead of the specific mention of the words 'most favored nation' at the end of the paragraph, however, the Siamese Government would propose the following wording: 'of any other country, upon the principle of nondiscriminatory treatment'."

If 'most favored nation' is mentioned specifically, the members of the Assembly would expect the word 'reciprocity' to be mentioned specifically also. That is why the words 'any other country' are proposed instead. On the other hand, if 'nondiscriminatory treatment' is mentioned as well, the formula will be easily understood by the members of the Assembly. In this new context, nondiscriminatory treatment can only refer to nondiscrimination among foreigners and cannot refer to nondiscrimination between nationals and foreigners.

In case the Department of State would prefer a stronger word than 'principle', the Siamese Government would accept the word 'basis' in its place.

The paragraph will now read as follows:

'It is expressly agreed that nationals of the United States of America, including corporations, partnerships and associations, 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 Siam the right to acquire, possess and dispose of immovable property, shall, in return, be accorded all the rights respecting immovable property in Siam which are or may hereafter be accorded to the nationals, including corporations, partnerships or associations of any other country, upon the basis of nondiscriminatory treatment'.

Counter-proposal 2. Letter on monopolies. If the term 'integral part of the treaty' is used, the exchange of letters would have to be submitted to the Assembly as part of the treaty, but according to the Constitution of Siam, an international engagement binding only the Executive Power need not be submitted to the Assembly in order to be valid. The Siamese Government therefore propose the addition after the words 'following agreement' the words 'which is to remain in force during the life of the treaty': This is calculated to give satisfaction in substance to the Department of State, as overcoming at the same time the constitutional difficulty mentioned above".

The introductory sentence of the exchange of notes on monopolies would then read "in regard to subparagraph 3 of paragraph 4 of article 3 of the treaty signed by us today, we have reached the following agreement which is to remain in force during the life of the treaty:" NEVILLE

711.922/109: Telegram

The Acting Secretary of State to the Minister in Siam (Neville)

WASHINGTON, November 10, 1937-6 p. m.

35. Your No. 38, November 10, 7 p. m.

1. Department notes that memorandum of Minister for Foreign Affairs fails to refer to point on which the Department desired to assure itself, namely that Siam will, in fact, in respect to real property accord without further compensation to citizens of states which allow Siamese to acquire, possess and dispose of real property, treatment as favorable as that accorded to any other nation. See in this connection last sentence of paragraph 1 of our No. 34 of November 9, 6 p. m. Inasmuch as the memorandum of the Minister for Foreign Affairs was in writing, the Department would prefer this confirmation in similar form but leaves this matter in your discretion. Upon receipt of such confirmation you may accept real property provision quoted in full in your telegram under reference, ending with the words "upon the principle of nondiscriminatory treatment". In