One purpose of his coming was to quiet political comment in Austria. The Austrian public does not understand the debt situation. They hear that reparations are a first charge on Austrian assets, that the relief debts of 1920 are also a first charge on Austrian assets, and that the reconstruction loan of 1923 is a first charge also and with priority over the other first charges. An Austrian province wishes to borrow and has no trouble in floating a loan. Vienna has no trouble in floating a loan on favorable terms. The Austrian Government has for two years been trying to float a loan and Dr. Schüller has been running around Europe in circles but no loan is forthcoming and the Austrian public is told that the American Congress must act on the matter. The public knows that Dr. Schüller has come to the United States and this fact will keep them quiet for a few weeks at least. The Austrian Government understands the American situation but the people do not. In Austria the Government would present a matter of this kind to the legislature in the morning and have its law by noon. The Government of course recognized that this could not be done in the United States and was very thankful for the attitude which the American Government had shown in the matter.

In discussion of the present status of the Enabling Act, Dr. Schüller said that he would be glad if his technical knowledge could be of service in the drafting of an agreement which might be of possible use now and which would at least be necessary sometime. He would also draft a simple and comprehensive statement of the whole matter for the use of officials considering the matter.

During the conversation it developed that Austria considers the agreement negotiated June 15 with the Governments of Denmark, France, Great Britain, Holland, Norway, Sweden and Switzerland“ to be now in force. Accordingly on January 1, 1929, it will make the payments provided for in the optional schedule of payments set forth in Annex 2 of the letter of the Austrian Minister at London to the International Relief Bonds Committee, dated June 15, 1928. At the same time it will make corresponding payments to the United States and to Italy as required by the following paragraph of the Relief Bonds of 1920:

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"The Government of Austria agrees that no payment will be made upon or in respect of any of the obligations of said series issued by the Government of Austria before, at or after, maturity, whether for principal or for interest, unless a similar payment shall simultaneously be made upon all obligations of the said series issued by the Government of Austria in proportion to the respective obligations of said series."

There was nothing in the Relief Bonds of 1920 which required that simultaneous settlements of the relief debt be made with the various

"Not printed.

creditor Governments. The obligation for equality of treatment was that quoted in the above-mentioned paragraph and Austria could meet the obligation by making simultaneous and similar payments to all the creditors. In the case of a Government which had not concluded a settlement with Austria, the payment would simply be a payment on account. He considered, however, that Austria is now in a position to make a definite settlement with the United States, including a clause reserving to the United States equality of treatment with any superior terms which might later be granted to Italy. It was of course possible that Austria might not obtain the subordination of the relief liens in favor of the proposed investment loan. The relief debt settlement was not offered in consideration of the subordination of the lien as Austria desired in any event to simplify its debt

structure.

863.51 Relief Credits/164: Telegram

A[RTHUR] N. Y[OUNG]

The Secretary of State to the Minister in Austria (Washburn) WASHINGTON, December 7, 1928–5 p. m. 40. Before the Ways and Means Committee December 7 the Under Secretary of the Treasury submitted the proposed Austrian debt agreement. Committee will consider amended joint resolution authorizing the subordination of the lien in favor of the proposed investment loan and the conclusion of a debt agreement set forth in general terms in the resolution.

65

KELLOGG

863.51 Relief Credits/171: Telegram

The Secretary of State to the Minister in Austria (Washburn) WASHINGTON, December 12, 1928-noon. 42. Department's 40, December 7, 5 p. m. House of Representatives adopted amended resolution December 11.66

KELLOGG

*Printed in Austrian Debt Settlement: Hearings before the Committee on Ways and Means, House of Representatives, 70th Cong., 2d sess., on H. J. Res. 340, etc. (Washington, Government Printing Office, 1928), pt. 2, p. 13.

"In telegram No. 204, Reparation No. 79, June 15, 1929, to the Embassy in France, the Acting Secretary of State (Clark) said in part: "House Joint Resolution 340.. passed Congress and was approved by the President February 4, 1929 [45 Stat. 1149]. No further congressional action approving the agreement will be required. Austria has made payment due January 1, 1929, under agreement. It is not contemplated that agreement will be signed until the Reparation Commission has taken action indicated in paragraph six of the agreement and until the Secretary of the Treasury is satisfied that such action is adequate to guarantee to the bonds to be issued thereunder the same security as the relief bonds of 1920 and priority over costs of reparation. This government would be glad to see an early settlement of this matter." (File No. 863.51/899.)

TREATY OF FRIENDSHIP, COMMERCE AND CONSULAR RIGHTS BETWEEN THE UNITED STATES AND AUSTRIA, SIGNED JUNE 19, 1928 7

711.632/15

The Secretary of State to the Minister in Austria (Washburn)

No. 459 WASHINGTON, May 12, 1926. SIR: The Department has given attentive consideration to the suggestions made by the Austrian Government in relation to the proposed Treaty of Friendship, Commerce and Consular Rights between the United States and Austria, which were communicated and discussed in your despatches No. 374 of December 18, 1923,68 and No. 419 of March 4, 1924. It desires that you renew the Treaty negotiations with the Austrian Government and bring to the attention of that Government the views of this Government in regard to its proposals as they are hereinafter stated.

In the progress of the negotiation of the Treaty of Friendship, Commerce and Consular Rights with Germany which was signed December 8, 1923,70 some seven or eight suggestions were made by the German negotiators which resulted in minor changes in the text of articles which also are in the draft which you submitted to the Austrian Government. As this Government considers that uniformity in every particular in which it is possible is essential in all the treaties of the series which it is negotiating, it is hopeful that these changes will be acceptable to the Austrian Government. They are hereinafter referred to in the regular order of the Articles of the draft along with this Government's comments on the Austrian counter proposals.

Preamble. It is desired that the title of the Treaty as stated in the Preamble, shall be "Treaty of Friendship, Commerce and Consular Rights". This title is used in the Treaty with Germany (Treaty Series No. 725) and in treaties of the same type which have been signed by the United States with Hungary, Esthonia and Salvador."1 Article 1. With reference to Article I, the Austrian Government proposed:

1. That the word "agricultural" be included in the first paragraph of Article I, so as to provide for the leasing of lands for agricultural purposes as well as for residential, scientific, religious, philanthropic, manufacturing, commercial and mortuary purposes.

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For previous correspondence, see Foreign Relations, 1925, vol. 1, pp. 516 ff. 68 Ibid., 1923, vol. 1, p. 413.

Not printed.

10 Foreign Relations, 1923, vol. I, p. 29.

"Treaty between the United States and Hungary, signed June 24, 1925, Foreign Relations, 1925, vol. I, p. 341; between the United States and Estonia, signed Dec. 23, 1925, ibid., p. 70; between the United States and Salvador, signed Feb. 22, 1926, ibid., 1926, vol. II, p. 940.

2. That provision be made in Article I, for the acquisition of land by the nationals of the High Contracting Parties on the same terms as nationals of the most favored nation.

3. That the following provisions be incorporated in Article I of the treaty:

(A) "The nationals of each High Contracting Party, who have their residence in the territories of the other and who should come to be expelled by judgment at law, by police measures legally applied and executed, or by virtue of the police regulations concerning public morals and paupers, shall be received with their families in any case by their native country.

(B) "The High Contracting Parties engage themselves reciprocally to give to indigent nationals of the other who fall ill, become mentally deranged or meet with an accident within their territories the same care and the same treatment accorded to their own nationals until the deportation can be effected without prejudice for the person concerned or for others.

(C) "For the costs incurred in such cases and for the burial of dead paupers, no reciprocal compensation shall take place at the charge of State, Province, Municipality or other public funds; merely a private redress being reserved against the person concerned or others who may be under such obligation."

With respect to the first amendment proposed by Austria it may be said that there is a very practical reason why it would not be advisable for the Government of the United States to confer upon aliens by treaty the right to lease lands for agricultural purposes. The owning and leasing of agricultural lands by Japanese have been regarded as a menace in California and possibly one other Pacific Coast State, and the Treaty of Commerce and Navigation of 1911 between the United States and Japan 72 (3 Treaties, Conventions, etc., page 2712, Article I), was carefully worded so as to avoid. conferring upon Japanese the right to own land in the United States or to lease it for agricultural purposes. If the United States were to conclude a treaty with Austria conferring upon Austrian nationals the right to lease land in the United States for agricultural purposes, the Government of the United States would be in the position of discriminating in this respect, in behalf of Austrian nationals and thus against Japanese, and of creating by treaty with Austria such a discrimination against Japanese as Japan complained had been made by the Alien Land Law of California.73) The leasing of lands for agricultural purposes in the United States is regarded as a matter peculiarly of local concern to be regulated by the legislatures of the several states in which it is deemed inadvisable for the Federal Government to intervene. The first paragraph of Article I, as submitted in the draft, is identical with the correspond

ing provisions of the Treaty of Friendship, Commerce and Consular Rights between the United States and Germany, signed December 8, 1923, and no controlling reason is perceived for modifying that paragraph.

What has been said above with respect to discrimination is applicable also to the second amendment proposed by Austria. It appears, however, that the right of nationals of foreign countries to own land in Austria is conditional upon the reciprocal right of Austrian nationals to own land in the country of the foreign national concerned.

A strong reason why it is undesirable for the United States to conclude a treaty with a provision granting a most favored nation right to own real estate is that the Treaty of Friendship, Commerce and Navigation of 1853 between the United States and the Argentine Republic (1 Treaties, Conventions, etc. page 20), contains a provision in Article IX that may be regarded as conferring upon Argentine nationals the right to acquire real property in the United States. This right would, by virtue of that Treaty, become available to the nationals of any country with which the United States concludes a treaty containing a provision securing most favored nation treatment with respect to acquiring real property. It is the policy of this Government to avoid including a most favored nation clause in the treaties which it concludes until the Treaty of 1853 with the Argentine Republic shall have been amended so as to eliminate the provision hereinabove referred to, abrogated, or replaced by a new treaty which does not contain that provision.)

It appears from your despatch No. 324 of December 29, 1923," that the exclusion of Austrian citizens from the privilege of owning land in some of the states of the United States would have the effect, in the absence of a treaty provision on the subject, of depriving all American citizens of the privilege of acquiring land in Austria. In view of the existing state of Austrian law on the subject of the acquisition of landed property by aliens, a provision could be inserted in the treaty between the United States and Austria similar to the provision on the subject included in the Treaty of Amity and General Relations between the United States and Turkey, signed at Lausanne, August 6, 1923,75 which was as follows:

"As regards the acquisition, possession, and disposition of immovable property the nationals of each of the High Contracting Parties shall enjoy in the territory of the other, subject to reciprocity, the treatment generally accorded to foreigners by the laws of the place where the property is situated; accordingly, they may own, lease, and construct buildings and appurtenances for residential purposes or for any other purpose permitted by the present Treaty."