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In connection with the term “most-favored-nation” in paragraph 3 of Article XVI it appears that the definition proposed by this Government is not acceptable. This proposal was as follows:

"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.”

It is appreciated that the inclusion of the reference to the United Kingdom of Great Britain and Northern Ireland raises the whole problem of the conditions of trade between two component parts of the British Commonwealth of Nations. While it is my hope that these conditions may embody the most liberal principles of international trade, this Government, in view of present unsettled world conditions will refrain from raising the question at the present time. It, therefore, proposes the following wording for paragraph 3 of Article XVI:

“3. The term (most-favored-nation' as used in this treaty, except Articles II, III and IV shall be construed to mean the most favored third country including the United Kingdom of Great Britain and Northern Ireland. The term 'most-favored-nation' as used in Articles II, III and IV shall be construed to mean the most favored foreign country.”

In view of the fact that the proposed treaty as concluded, would leave a number of problems without definitive rules for their solution, it is suggested that the initial term of the treaty specified in paragraph 1 of Article XVII be three years in lieu of five years.

It is understood that the Government of India would agree to the establishment of an American consular establishment at Delhi, such agreement to be in the form of an exchange of notes. In the event Agents General or Commissioners are received at Washington and Delhi pursuant to this Department's memorandum of May 28, 1941,41 it will, of course, be unnecessary to conclude the previously mentioned exchange of notes.

There are a number of small refinements in language which this Government desires in the proposed treaty, particularly in the provisions relating to foreign exchange control, but such changes may be discussed at some later time.

In view of the substantial progress made in the negotiations hitherto conducted it is my hope that, despite the pressure of other problems, it may be possible to bring these negotiations to a speedy conclusion. Accept [etc.]

SUMNER WELLES

* Ante, p. 170.

711.452/43 Memorandum of Conversation, by Mr. W. L. Parker of the Division

of Near Eastern Affairs

[WASHINGTON,] June 30, 1941. Participants: Sir Firoz Khan Noon, High Commissioner of the

Government of India at London,
Mr. Mather, of the High Commissioner's Office.
Mr. Alling 42
Mr. Turkel 43

Mr. Parker Sir Firoz Khan Noon, accompanied by Mr. Mather, called again this morning at the Division of Near Eastern Affairs to discuss matters pertaining to the proposed treaty between India and the United States. Sir Firoz stated that the Government of India desires that the limitrophe countries, Iran, Afghanistan, and Nepal be outside the purview of the treaty because of the special position which they occupy in relation to India. He was informed that no objection was perceived to this proposal.

There was also discussed the question of inclusion in the treaty of a provision according American nationals and corporations the same rights and privileges in the exploitation of mineral resources as those of other nations, particularly the United Kingdom. Sir Firoz was informed that the Department still desires the inclusion of such a provision, and Sir Firoz stated that he would take the matter up with his Government. A discussion then ensued as to whether this provision, as well as certain other provisions in the treaty, should be upon a "reciprocal" or "most-favored-nation” basis. Sir Firoz was inclined to favor the “reciprocal” point of view; whereas the Department prefers a "most-favored-nation” basis.

At the conclusion of the conference it appeared that substantial agreement had been reached in regard to most matters involved in the treaty and that remaining controversial problems were capable of solution. Just prior to his departure Sir Firoz indicated that he considered it probable that agreement on all points could be reached eventually and that prospects are good for the conclusion of a treaty embodying substantially the provisions desired by the Department.

“ Paul H. Alling, Assistant Chief of the Division of Near Eastern Affairs. Harry R. Turkel of the Division of Commercial Policy and Agreements.

48

711.452/44 The High Commissioner of the Government of India at London

(Noon) to the Chief of the Division of Near Eastern Affairs (Murray)

WASHINGTON, July 1, 1941. DEAR MR. WALLACE MURRAY: It was a great pleasure to have met you this morning and to have discussed the trade treaty with your officers, Messrs. Ayling [Alling], Parker and Turkel. During these

. discussions, it was informally agreed that the point of view of the Government of India regarding a special treatment to be accorded to limitrophe countries was in accordance with the usual practice and that the State Department will have no objection to this principle being incorporated in this treaty.

The second point we discussed was the exploitation of mineral resources. In this respect, your officers were keen that the U. S. A. citizens should have an equal treatment with the United Kingdom subjects. I am passing this information on to my own Government and I hope that before long the two countries will be able to come to a final decision. Assuring you [etc.]

FIROZ NOON

711.452/44 The Assistant Secretary of State (Acheson) to the British Chargé

(Campbell)

WASHINGTON, October 3, 1941. MY DEAR MR. CHARGÉ D'AFFAIRES : I enclose a copy of a letter dated July 1, 1941 44 from Sir Firoz Khan Noon, K. C. S. I., relating to certain matters under consideration in connection with the proposed treaty between the United States and India. In view of the recent appointment of Sir Firoz to a post in India, it is not known whether Sir Firoz is still engaged in the consideration of questions relating to the proposed treaty. For this reason it is considered appropriate to communicate to you the attitude of the Department concerning the following matters referred to by Sir Firoz in his letter.

It is noted that it is the desire of the Government of India that the terms of the proposed treaty provide for special treatment to be accorded to the limitrophe countries of Nepal, Afghanistan and Iran. In view of the special factors affecting the trade between India, on the one hand, and Nepal and Afghanistan, on the other, the Department perceives no objection to the incorporation within the treaty of a provision recognizing the special position of these two limitrophe countries and placing them outside the purview of the treaty. It is the opinion of the Department, however, that India's trade relations with Iran, and Iran's trade relations with other countries, are not such as to warrant the inclusion within the treaty of such a provision with respect to Iran. In this connection it may be mentioned, furthermore, that, whereas Nepal and Afghanistan are land-locked countries with extensive frontiers over which pass their principal arteries of trade, Iran is a maritime nation engaged in direct sea-borne trade with various countries, including the United States.

* Supra.

It is noted also that Sir Firoz has stated that he is informing his Government of the Department's desire that there be incorporated in the treaty provisions according to American nationals and corporations the same rights and privileges in the exploration and development of mineral resources as accorded to those of other countries, including the United Kingdom.

It would be greatly appreciated if you would kindly make known the foregoing views of the Department either to Sir Firoz Khan Noon or to the appropriate authorities of the Government of India. I am [etc.]

DEAN ACHESON

[In a letter from the Indian Agency General, December 15, 1942, it was stated that the Government of India, after most carefully considering the matter, "are disposed to feel it wiser, in view of the changed situation in India, to defer the conclusion of the negotiations until conditions are more settled”. (711.452/49) ]

REPRESENTATIONS BY THE UNITED STATES REGARDING IMPORT RESTRICTIONS BY INDIA AND BURMA AFFECTING AMERICAN MISSIONARY ORGANIZATIONS; REQUEST FOR FREE ENTRY PRIV

ILEGES FOR AMERICAN MISSIONARIES 645.116/48 The Secretary of State to the Consul General at Calcutta (Wilson) 45

WASHINGTON, March 24, 1941. The Secretary of State encloses for the attention of the Consular Officer in charge a copy of a letter dated March 12, 1941, together with an enclosure thereto, from the American Baptist Foreign Mission Society, 152 Madison Avenue, New York, New York, 46 concerning the desire of the Society that shipments of certain types of medical and educational supplies made to its representatives in India and

46 The same instruction, mutatis mutandis, March 24, to the Consul at Rangoon. 4 Not printed.

409021-59—-14

Burma be exempted from import control restrictive measures and prohibitions in view of the fact that they are financed entirely by American funds.

The American Baptist Foreign Mission Society states in its letter that, for the past twenty years, it has been shipping medical and school supplies to its missions in India and Burma and that most of these articles consist of contributions and gifts from affiliated religious organizations in the United States. It appears that some of the materials, such as bandages and certain medical supplies, are prepared by church women and that monetary contributions equivalent to the value of such articles can not be obtained. It is pointed out that these shipments are not financed by mission funds in India and Burma and that they involve no exchange transactions for the purchase of dollars.

From the information available to the Department it is understood that shipments of the type referred to are subject to import control measures and that no provision exists exempting them from restrictions and prohibitions generally applicable to ordinary commercial goods purchased with rupee funds. Since it is the Department's understanding that the ostensible purpose of existing regulations controlling imports is to conserve exchange, it is desired that you ascertain from the appropriate local authorities what exemptions may be made with respect to importations by all American missionary organizations in India of supplies of this character which do not involve foreign exchange transactions, pointing out that such supplies represent the voluntary contribution of materials for use in philanthropic enterprises. The list of articles submitted by the American Baptist Foreign Mission Society as an enclosure to its letter may, of course, be regarded as illustrative and not as a complete list of the articles which the Mission Society desires to import.

The Department desires that you submit a report on the subject by air mail.

A similar instruction has been sent to Rangoon.

645.116/71b The Secretary of State to the Consul General at Calcutta (Wilson) 47

WASHINGTON, May 5, 1941. SIR: The Department desires to ascertain the attitude of the Government of India toward granting free entry to importations of equipment and supplies consigned to American missionary organizations,

47

The same instruction, mutatis mutandis, May 5, to the Consul at Rangoon.

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