States had to admit the correctness of the Swiss claim for unconditional most-favored-nation treatment. The treaty with Orange Free State (1871) was denounced in 1895, but the one with Serbia (1881),' has presumably continued in operation and was unique in the American treaty system as it existed at the time of the passage of Section 317.2

37. THE MOST-FAVORED-NATION CLAUSE AND AMERICAN RECIPROCITY ARRANGEMENTS

The more numerous and important, though not the only, diplomatic controversies which the United States has waged, or in which its citizens have been engaged, because of the most-favored-nation clause, have arisen, as might well have been expected, out of the existence of special reciprocal agreements between the United States and third powers extending reciprocal concessions for reciprocal compensation.

(a) France and the British Treaty of 1815

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In a treaty of 1803, the United States stipulated that the ships of France should be treated upon the footing of the most-favored-nation in certain named named ports. Great Britain, in order to take advantage of an act of 1815* offering reciprocity in the matter of duties upon ships, ceased to discriminate against American vessels. France took no such action, but nevertheless claimed the same

1Text, infra, subdivision 64.

? Concerning the agreement of August 1, 1906, with Spain, see infra, subdivisions 37(g) and 65, note. This agreement contained a clause that might readily have been interpreted as a pledge on the part of each country to accord to the other unconditional most-favored-nation treatment.— See Reciprocity and Commercial Treaties, pp. 435-436. For a list of the commercial agreements in effect March 1, 1924, between the United States and other countries, see Appendix 3.

Treaty for the Cession of Louisiana, concluded April 30, 1803, art. viii. Malloy, Treaties, p. 510.

*Text, supra, subdivision II.

treatment, in the ports to which the treaty of 18031 applied, as was accorded to the ships of Great Britain. The United States maintained that the treaty of 1803 did not imply that France was to have freely a concession for which other nations paid a price-such, it was claimed, instead of being most-favored-nation treatment, would be more than mostfavored-nation treatment. The dispute dragged along for nearly fifteen years and was determined only in connection with the settlement of other issues. In 1823 Mr. Gallatin, minister to France, thus stated the American view:

When not otherwise defined . . . [the right of most-favorednation treatment] is that, and can only be that, of being entitled to that treatment gratuitously, if such nation enjoys it gratuitously, and on paying the same equivalent, if it has been granted in consideration of an equivalent.2

(b) Austria and the French Treaty of 1831

By the treaty of 1831 the United States agreed that the duties on French wines should not exceed a specified amount and France made a similar promise with respect to long-staple cotton from the United States. Under the conditional most-favored-nation provision of its treaty of 1829, Austria claimed from the United States the benefit of the lower duty on French wines. This was refused on the ground that France was paying for the favor and that it was not to be extended gratuitously to other countries. (c) Denmark, Dominican Republic and the Hawaiian Reciprocity Treaty

A controversy over the treaty of 1826 with Denmark, which finally resulted in a decision by the Supreme Court

'Text, Malloy, Treaties, p. 510.

'American State Papers, U. S. Foreign Relations, vol. v, p. 673. 'Malloy, Treaties, p. 525.

of the United States in the case of Bartram versus Robertson,1 grew directly out of the United States' reciprocity treaty of 1875 with Hawaii. The court was called upon to interpret the most-favored-nation provisions of the Danish treaty, contained in Article IV, which promised, without any stated condition, reciprocal equality of customs treatment as compared with the treatment accorded to third countries; and in Article I, a covering clause, which provided that the contracting parties engaged, reciprocally, not to grant any particular commercial favor to other nations that should not immediately become common to the other party, which should "enjoy the same freely, if the concession were freely made, or on allowing the same compensation, if the concession were conditional ". Said the Court:

Our conclusion is, that the treaty with Denmark does not bind the United States to extend to that country, without compensation, privileges which they have conceded to the Hawaiian Islands in exchange for valuable concessions.

The treaty between the United States and the Dominican Republic (1867) contained an article mutually granting most-favored-nation treatment without any provision in regard to compensation such as was contained in the covering clause of the treaty with Denmark. An importer of sugar from San Domingo accordingly sought to obtain the reduced rates granted to imports under the reciprocity treaty between the United States and Hawaii. The Supreme Court declared, however, in Whitney versus Robert

1122 U. S., 116 (1887). Hawaiian treaty text, Malloy, Treaties, p. 915. 'Convention of Friendship, Commerce and Navigation, concluded April 26, 1826. Malloy, Treaties, p. 373. Renewed by convention of April 11, 1857, art. v, ibid., p. 382.

'Article IX, Convention of Amity, etc., with Dominican Republic, concluded Feb. 8, 1867. Malloy, Treaties, p. 403.

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son that it did not think the absence of the compensation clause affected the obligations of the United States. In the view of the Court the most-favored-nation clause in the Dominican treaty

was never designed to prevent special concessions, upon sufficient considerations, touching the importation of specific articles. . . . It would require the clearest language to justify a conclusion that our Government intended to preclude itself from such engagements with other countries, which might in the future be of the highest importance to its interests.

(d) Other Controversies in Regard to the Hawaiian Treaty The Hawaiian reciprocity treaty was also the occasion for other serious controversies. Hawaii undertook not to "make any treaty by which any other nation" should "obtain the same privileges, relative to the admission of any articles free of duty", and also promised other exclusive favors. Several European governments objected to this on the basis of rights claimed to be secured by their own treaties with Hawaii. Germany protested notwithstanding the fact that there existed no treaty between Germany and Hawaii.

As a result of the provision in the United States' treaty with Hawaii to the effect that favors granted to this country should not be extended to third powers, it was apparently necessary for Hawaii to violate the treaty of 1851 with Great Britain which contained reciprocal pledges of mostfavored-nation treatment. Under the American interpretation of the clause, Great Britain, by offering like concessions, ought to have enjoyed equality of opportunity with the United States to obtain any favors which Hawaii was willing to give. Nevertheless, Great Britain and the other

1124 U. S., 190 (1888).

European nations finally yielded to the "peculiar circumstances of the case", that is, to the argument of special considerations of geography and political expediency, thus yielding to the United States the unimpaired maintenance of its Hawaiian treaty.

In 1884 Great Britain made an unsuccessful attempt to obtain from the United States for its West Indian possessions, by an extension of Article II of the British-American treaty of 1815, the treatment granted Hawaii under the reciprocity treaty. As this article contained no stipulation in regard to compensation, to invoke it was precisely in accord with the British latter-nineteenth century conception. of the meaning of the clause. Such invocation was precisely the reverse of the American interpretation, which held that the most-favored-nation clause only granted equality of opportunity to obtain, by paying the same price, the favors granted to third nations through reciprocity treaties.

The treaty which the United States concluded with Tonga on October 2, 1886, reflects the controversies in regard to Hawaii in the provision that it should be

understood that the Parties hereto affirm the principle of the law of nations that no privilege granted for equivalent or on account of propinquity or other special conditions comes under the stipulations herein contained as to favored nations.1

As late as 1895 the American Government was still explaining its position to Europe-in the course of a discussion with Russia-and President Cleveland 2 had been so impressed with the controversies over the seeming conflict between the most-favored-nation clause and reciprocity treaties (even though such conflict was held non-existent by the State Department) that he made the probability of 1Article II, Malloy, Treaties, p. 1781.

2 In his first administration.