Form 2. The specialized reciprocal form, which applies only to favors mentioned in the treaty. For instance,

No other or higher duties shall be imposed by either of the high contracting parties on the importation of any article, the growth, produce or manufacture of the other, than are or shall be payable on the like articles, being the growth, produce or manufacture of the most-favorednation.20

Form 3. The simple reciprocal form.

The high contracting parties agree that, in all that concerns commerce and navigation, favors which either has granted or may hereafter grant to any other state shall be granted to the other party.

This includes the majority of British treaties.21

of the most-favored nation, always excepting the advantages accruing to the Dutch and Chinese from the existing relations with Japan." In the treaty between China and the United States, Oct. 8, 1903, article III provides that citizens of the United States in the open or hereafter opened ports of China "shall generally enjoy as to their persons and property all such rights, privileges, and immunities, as are or may hereafter be granted to the subjects or citizens of the nation the most favored in these respects."

20 Treaty between China and United States, July 28, 1868, article 6, specifies for most-favored-nation privileges as regards travel and residence. In the treaty between France and Italy, Nov. 3, 1881, article 17 provides that each contracting party engages to allow the other to profit by any privilege or lowering of the tariff duties on the importation or exportation of articles, whether mentioned or not in the treaty, which one of them has accorded or shall accord to a third power. (The terms of the treaty not to apply to articles which are the objects of state monopoly.) Treaties between France and Honduras, Feb. 11, 1902; France and the Dutch Colonies, Aug. 13, 1902; and France and Nicaragua, Jan. 27, 1902, provide for most-favored-nation treatment as regards duties on importation and exportation of specified articles. The form adopted in the treaty between Great Britain and Uruguay, July 15, 1899, specifically restricts the application. "The stipulations contained in the treaty do not include cases in which the Government of Uruguay may accord special favors, exemptions, and privileges to the citizens or the productions of the United States of Brazil, or of the Argentine Republic, or of Paraguay in matters of commerce. Such favors cannot be claimed in behalf of Great Britain on the ground of the most-favorednation rights as long as they are not conceded to other states." See treaties between United States and Great Britain, Nov. 19, 1794, article 15; Holland and Spain, July 12, 1892, articles 2, 6; Holland and Italy, Nov. 24, 1863, article 2; Holland and Austria-Hungary, March 26, 1867, article 2.

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21 In the treaty between Great Britain and Servia, June 28-July 10, 1893, articles I, II provide: "The two contracting parties engage reciprocally not to accord to subjects of any other power in matters of navigation or commerce any

Form 4. The imperative or unconditional form.

The high contracting parties agree that all favors, etc., in all that concerns commerce and navigation which either has already granted or may hereafter grant to any other state, shall immediately and without condition become common to the other party.22

Form 5. The qualified, or conditional, reciprocal form.

The high contracting parties agree that in all that concerns navigation and commerce, favors which either has already granted or may hereafter grant to any other state shall become common to the other party who shall enjoy the same freely if the concession is freely made, or upon allowing the same compensation if the concession was conditional.

This form appears in most of the treaties of the United States. It also appears in nearly all Japanese treaties, and is followed by

privilege, favor, or immunity, whatever, without extending them during the duration of the said concessions to the commerce and navigation of the other party, and they will enjoy reciprocally all the privileges, immunities, and favors which have been or shall be conceded to any other nation." In that between Japan and China, July 21, 1896, article 4 grants, “in all respects the same privileges and immunities as are now or may hereafter be granted to the subjects or citizens of the most-favored nation." A convention between Austria-Hungary and Mexico, Sept. 17, 1901, grants "Most-favored-nation treatment not only as regards importation, exportation, transit and in general everything relating to commercial operations and to navigation, but also in carrying on of business and of manufactures and the payment of taxes in connection with them." Cf. Treaties between United States and Great Britain, July 3, 1815; Great Britain and Netherlands, Oct. 27, 1837, article I; Russia and Great Britain, Jan. 12, 1859, article X; France and Mexico, Nov. 27, 1886, article II; Germany and France, May 10, 1871, article XI; Servia and Greece, June 17, 1894; Roumania and Bulgaria, March 4, 1895; Belgian Treaties with Denmark, Greece, and Sweden, 1895; and English Treaties cited infra.

22 The treaty between Germany and Austria-Hungary, Dec. 6, 1891, as amended and completed Jan. 25, 1905, provides that no more favorable conditions in respect of import, export, or transit duties shall be granted by either contracting party to a third power than shall be accorded to the other party, and that any concession of this kind made to the third power shall at once be applied to the other. Any dispute relating to these provisions to be referred to arbitration (article 23a). In the treaty between Great Britain and France, Feb. 28, 1882, it is provided that " with the exception above stated each engages to give the other immediately and unconditionally the benefit of every favor, immunity, or privilege in matters of commerce or industry which has been or may be conceded by one to any third nation, whatsoever, whether within or beyond Europe." Cf. treaties between Great Britain and Italy, June 15, 1883, article 11; Russia and Denmark, Mar. 2, 1895, article I.

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certain South American states. The modifying or conditional clause "freely if freely made," etc., contains the principle which the United States secretaries have consistently claimed shall govern the interpretation of the clause whether included or not.23

That Great Britain and the United States follow forms outlined in the third and fifth classes respectively is significant of their respective attitudes as concerns the intention and the proper interpretation of the clause. It may be laid down that, in general, throughout Europe the clause has been treated as applying to all reductions of tariff without distinction. The United States on the other hand, and such nations as have followed its interpretation, have consistently distinguished between reductions of a general character or those made gratuitously, and those made specifically .in return for reductions or an equivalent granted by the other state.2 The central feature in the practice of the United States has been the principle of reciprocity. As has already been pointed out, the special limiting clause which expresses the American idea and forms the basis of the American interpretation was first inserted in treaties made by the United States. A survey of American commercial treaties shows that the United States has regularly adhered to this principle. The limiting clause has been omitted in a few cases, 25 and one or two cases of irregular interpretation have cccurred.26

24

23 Treaty between United States and Japan, Nov. 22, 1894, article XIV provides: "The contracting parties agree that in all that concerns commerce and navigation, any privilege, favor, or immunity which either has actually granted or may hereafter grant to any other state shall be extended to

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the other high contracting party gratuitously if the concession in favor of that other state shall have been gratuitous, and upon the same or equivalent conditions if the concession shall have been conditional; it being their intention," etc. Cf. treaties between Argentine Confederation and Prussia, Sept. 19, 1857, article III; and Argentine Confederation and Japan, Feb. 3, 1898, article IV. For complete list of U. S. treaties containing this form, 1778-1887, cf. Herod, op. cit., 13, note. Cf. treaties between Portugal-Prussia, Feb. 20, 1844, article XII; England-Liberia, Nov. 21, 1848; Zoll-Verein-Netherlands, Dec. 31, 1851, article XXXIII; Holland-Liberia, Dec. 30, 1862, article XI; North Germany-Liberia, Oct. 31, 1867, article VI; and modern Japanese treaties.

24 Cf. Barclay: Problems of International Diplomacy, 137.

25 Treaties between United States and Great Britain, July 3, 1815; United States and Switzerland, Nov. 25, 1850.

26 Cf. infra, p. 410.

American diplomatists have, however, with remarkable unanimity, maintained that in spite of the most-favored-nation clause, and even though the clause itself may not contain an express stipulation to that effect, a nation may always require an equivalent for concessions demanded under the operation of the clause.

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You will doubtless have understood that where the words "qualified" and "unqualified" are applied to the most-favored-nation treatment, they are used merely as a convenient distinction between the two forms [which] such a clause generally assumes in treaties, one containing the proviso that any favor granted by one of the contracting parties to a third party shall likewise accrue to the other contracting party, freely if freely given, or for an equivalent if conditional the other not so amplified. This proviso, when it occurs, is merely explanatory, inserted out of abundant caution. Its absence does not impair the rule of international law that such concessions are only gratuitous (and so transferable) as to third parties when not based on reciprocity, or mutually reserved interest as between the contracting parties. This ground has been long and consistently maintained by the United States.27

The United States first had occasion to define its position expressly and to defend it vigorously in the controversy which arose over the provisions of the treaty of April 30, 1803, with France, article VIII of which provides:

In future and forever after the expiration of the twelve years, the ships of France shall be treated upon the footing of the most-favored-nation in the ports above mentioned.28

When, subsequently, under the operation of the reciprocal agreement between the United States and Great Britain, July 3, 1815, the ships of the latter enjoyed a national treatment in the harbors of the United States, which was not allowed to the ships of France, the French government, while refusing to grant an equivalent to the United States, demanded the same treatment which was accorded to England, insisting upon the literal interpretation of the mostfavored-nation clause, contending that "a clause which is absolute and unconditional can not be subject to limitation or any modifiIcation whatever." The United States government emphasized the

27 Mr. Bayard to Mr. Hubbard, July 17, 1886, MS. Inst. Japan, III, 425, Moore, op. cit., V, 273. Cf. Whitney v. Robertson, (1888) 124 U. S. 190.

28 Moore, op. cit., V, 257-260. American State Papers, F. R., Vol. V.

equivalent. The French replied that France had given an equivalent at the time of the cession of Louisiana. The United States argued for a more specific equivalent, saying that if they were to give France freely that for which England had paid, France would be enjoying a treatment more favored that that of the most-favorednation. This was the position held by Mr. Adams, President Monroe, and Mr. Gallatin, whose notes have been repeatedly quoted by United States Secretaries.

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But the allowance of the same privileges * to a nation which makes no compensation, that have been conceded to another nation for compensation, instead of maintaining destroys that equality which the most-favored-nation clause was intended to secure. It concedes for nothing to one friendly nation what the other gets only for a price.20

To M. Visser, this argument appears beside the point. He fails, however, to show conclusively just how it is so. Although it is true that "if, on examination, it appears that the third nation possesses a certain favored treatment, it matters little to others in what manner the third has obtained it," 30 this does not make a breach in the soundness of the general contention of the United States. The whole difference may finally be sifted down to a distinction between the two views as to what constitutes a favor." It is this difference of opinion which causes M. Visser to characterize the American argument as a " jeu de mots." 32

31

In 1821, Monroe worded our doctrine clearly in his message to Congress. In 1823, Mr. Gallatin stated expressly that the omission of the limiting clause made no difference and that where it was inserted it was merely explanatory and inserted "out of abundant caution." This was again stated by Mr. Livingston in 1832.

The treaty of the United States with Colombia, Oct. 3, 1824, provided that advantages given by either nation to a third party should be extended to the co-contractant, "freely if the concession was freely made," upon compensation if the concession was con

29 Mr. Sherman to Mr. Buchanan, Jan. 11, 1898, Moore, op. cit., V, 278.

30 Visser, op. cit., 273.

31 Cf. Barclay, op. cit., 138 ff.

32 Cf. Visser, op. cit., 273, and Cavaretta, op. cit., 99.