well as documents representing national credit. My opinion is that Acting Minister of Finance is acting within his rights and legally but there might be a question as to the rights of Salvador to negotiate with foreign bankers under the new Constitution of the Federation which went into effect October 1st. Government of Salvador holds that negotiations not affected by new Constitution since they were begun before October.

I have cabled bank that I have given you my opinion.

SCHUYLER

816.51/109: Telegram

The Secretary of State to the Minister in Salvador (Schuyler)

WASHINGTON, November 29, 1921-6 p.m.

39. Your No. 58, November 23, 3 p.m.

Department believes that matter referred to is not one upon which official opinion should be expressed. If bank requests names of lawyers in San Salvador there is no objection to your suggesting such names.

HUGHES

816.51/113

The Department of State to the British Embassy

The Department of State has received the memorandum of the British Embassy dated December 2nd," regarding the intention of the Government of Salvador to raise a loan in the United States upon the security of the customs duties of the Republic. The memorandum states that a portion of these customs duties form the security of the Salvador Railway Company, under their contract of 1899, with the Government of Salvador, and furthermore, that a special customs duty of $3.60 United States gold, per one hundred kilogrammes of imported merchandise, forms a portion of the security for the bond issues of 1908 and 1915. It is indicated that His Majesty's Government would regard with great anxiety any attempt by the Government of Salvador to raise a loan on the security of the customs duties which are already subject to the liens mentioned above.

'Not printed.

So far as the Department of State is informed in regard to the proposed loan by American bankers to the Government of Salvador, it is understood that the customs duties now pledged as security for other debts will not be pledged as security for the new loan unless the previous debts are paid in full. It is understood that the promoters of the loan intend that the debt to the Salvador Railway Company shall be paid in full and that the holders of the bonds of 1908 and 1915 shall receive in exchange for their holdings bonds of the new issue in accordance with the terms of an agreement which is now under consideration by the holders of those bonds.

WASHINGTON, December 9, 1921.

FEDERATION OF THE CENTRAL AMERICAN REPUBLICS

(See volume I, pages 143 ff.)

SIAM

TREATY AND PROTOCOL BETWEEN THE UNITED STATES AND SIAM, DECEMBER 16, 1920, REVISING EXISTING TREATIES

711.923/125

The Acting Secretary of State to President Wilson

WASHINGTON, February 24, 1920.

MY DEAR MR. PRESIDENT: The Siamese Minister has explained to me the great desire of his Government to break down the regime of extraterritoriality which foreign nations enjoy in Siam and which apparently has been a great barrier to the successful development of its governmental system, particularly the judicial branch.

At the present time the great powers have the right to try their own subjects before their own consuls in Siam or before the Siamese Courts on which an advisor of the nationality of the defendant sits, and whose opinion prevails. One result of this system is that it is difficult, if not in some cases impossible, to enforce highly desirable laws and regulations generally in respect of all persons in Siam. For example, I am advised that, although Siam is a party to The Hague Convention for the suppression of the abuse of opium and other drugs, she is unable to give effect to its provisions through appropriate legislation owing to her lack of jurisdiction over foreigners in Siam under the present judicial system.

Siam, therefore, is very anxious to free herself from this system and to formulate codes of laws along the lines of Western ideas, which will be applied to Siamese and foreigners alike in Siamese Courts. The Minister states frankly that negotiations are now proceeding with other countries with a view to obtaining this result. The purpose of his Government is to obtain a treaty with the United States which will define a certain period after which the enjoyment of extraterritorial rights in Siam shall cease. He desires us to agree to make this period a definite one, say one to five years (preferably as short as possible) from the date of the promulgation and putting into force of all of the Siamese codes; namely, the Penal Code, the Codes of Procedure, and Civil and Commercial Codes, and the Law for the Organization of the Courts. Up to the termination of this period Siam is willing to agree that legal pro ceedings against Americans as defendants be tried in Siamese Courts,

in which an American Advisor would sit, and his opinion would prevail. This would supersede, for the transitory period, the present method of trying such cases before American consuls in Siam, and I see no objection to this substitute, as I believe that the rights of American defendants would be fully protected. The important point with Siam is the absolute termination of such "Advisor" Courts and of the Consular Courts after a definite time; for she believes that with such a treaty with us as a model she will be able to obtain similar treaties with other countries having extraterritorial rights in Siam.

The Siamese Minister has discussed with the Department various plans short of absolute termination of our extraterritorial rights at the end of a definite period. The plans which have been discussed are: that the United States will give up extraterritorial rights at the expiration of a certain period after the promulgation of the Codes, if the operation of the Siamese Courts proves to be satisfactory; or that the United States will terminate its extraterritoriality on a definite date after the promulgation of the Codes if the Codes are found upon examination to be satisfactory to the Government of the United States; or that we could give up our extraterritorial rights as soon as all other governments have given up their rights.

None of these plans entirely satisfied the Minister as there is a condition attached to each one of them. He is pressing for a definite date of termination without any conditions. However, I am inclined to think that he may agree to a provision running something like this:

years

Said system shall absolutely cease and terminate after from the promulgation and putting into force of all Siamese Codesnamely, the Penal Code, the Codes of Procedure, and Civil and Commercial Codes, and the Law for the Organization of the Courts; it being understood that if the Government of the United States perceives objections to them that the Government of Siam will endeavor to take measures to meet such objections.1

The Department has never committed itself with respect to giving up our rights on a certain date without conditions, and the purpose of this letter is to ask how far I may go in this regard. The only objection I can think of to terminating our rights on a certain date without conditions is that the Senate may interpose the objection that we cannot be sure now that the Siamese Courts will at that date in the future be functioning so as to mete out justice to American citizens who become involved in litigation. If this objection is

1 'On a letter dated Feb. 28, 1920, in which the Acting Secretary of State put forward this provision for the second time, inserting the word "five" in the blank space, the President made, in the margin, the following notation in pencil: "I like this. . . . W. W." (File no. 711.923/1262.)

raised we cannot say that it is covered by a reservation. We will have to meet such an objection by pointing out that the relations between the United States and Siam have been friendly for over a hundred years and that the relative strength and influence of the United States will carry weight in our representations to Siam in the event that our confidence in her courts is overestimated, and that so far no citizen of the United States has suffered a wrong at the hands of the Siamese Government which has not been satisfactorily adjusted; that her judicial system bids fair to be as strong and as impartially administered as the systems of some of the Central and South American Republics, and, finally, that in our Treaty of 1898 with Japan we gave up extraterritorial rights in that country on a certain date without any reservation whatever, although the Japanese Codes had not yet been put into effect.

The Siamese Government have made considerable progress in reforming their judicial system. Several years ago the Siamese Government created a Code Drafting Commission, composed of Siamese and foreign jurists, including jurists of Great Britain, France and (for a time) the United States. This Commission is now engaged drafting and revising the codes, which I mentioned above, and has up to the present time completed drafts of the Penal Code, the Codes of Procedure, and the Civil and Commercial Codes. I am informed that the Penal Code was in fact promulgated and put into effect on June 1, 1908. Our reports are that the Siamese Courts have in the last few years been functioning in a fairly satisfactory manner. There is probably no doubt that the Siamese Government will be unable to develop its judicial system beyond a certain point unless it is able to free itself from the extraterritorial privileges of foreign nations.

I should add that Japan has agreed definitely to give up extraterritoriality upon the promulgation of all of the codes. I understand also that Denmark has agreed to give up her rights at the same time. Great Britain and France have already made a partial surrender and the former has agreed to make a further concession on the promulgation of all of the codes.

In connection with our surrender of extraterritorial privileges Siam is willing to revise her commercial treaty and in the revision is willing to grant us effective favored nation commercial treatment, free privilege of travel throughout Siam, the right to own property and engage in business throughout Siam on the same footing as natives, etc., none of which rights we enjoy at the present time. This in a sense is a quid pro quo for our surrender of extraterritoriality, as Siam is unwilling to revise the Commercial Treaty unless we make this concession.