The two countries agree that the existing restrictions and prohibitions concerning importation and exportation of certain goods will not be maintained except during the time and in the measure strictly necessary for meeting contemporary economic conditions. While awaiting the reestablishment of unrestricted interchanges, they engage to make all necessary arrangements to reduce to a minimum the inconvenience arising from the continuance of restrictive and prohibitive measures. These engagements, however, do not apply in case the restriction or prohibition is enforced for the purpose of fostering a state monopoly or native industry, or for reasons of sanitation or public safety.

Japan and Poland signed on December 7, 1922,1 at Warsaw, a comprehensive treaty of commerce and navigation which may well be considered a model for post-war commercial and most-favored-nation covenants. There are, indeed, stated exceptions, but the most-favored-nation treatment is unconditional and is applicable to a wide range of commercial activity. There is to be, in the first place, reciprocal freedom of commerce and navigation between the territories of the two countries.

Articles, the produce or manufacture of the territories of one High Contracting Party, upon importation into the territories of the other, from whatever place arriving, shall enjoy the lowest rates of customs duty applicable to similar articles of any other foreign origin.

The treaty similarly provides that the products of each country when exported to the other shall be accorded mostfavored-nation treatment; moreover, import and export prohibitions and restrictions, except as the articles affected constitute a state monopoly or are excluded for reasons of safety or sanitation, must conform to the most-favorednation principle.

1Journal of Commerce (New York), Dec. 27, 1922.

Nationals of one country residing in the other may export the proceeds of the sale of their property and their goods in general without being subjected as foreigners to higher duties than are paid by native subjects or citizens under similar circumstances.

Equality of treatment in the matter of taxation and facilities is to be mutually accorded to commercial travelers and Poland undertakes, on condition of reciprocity, to accord such treatment to Japanese business companies established in its territory whenever granted to the companies of any non-contiguous state. Generous provisions for national or most-favored-nation treatment of shipping and of goods in transit are included. The stipulations of the treaty do not, however, apply:

1. to tariff concessions granted by either of the High Contracting Parties to contiguous States solely to facilitate frontier traffic within a limited zone on each side of the frontier,

2. to the special favors resulting from a customs union, 3. to the provisional regulations of customs between Polish and German Parties of Upper Silesia,

4. to the treatment accorded to the produce of the national fisheries of the High Contracting Parties or to special tariff favors granted by Japan in regard to fish and other aquatic products taken in the foreign waters in the vicinity of Japan,

5. to the special laws of protection of the national commercial vessels according to the international custom.

On the other hand, by a clause of the accompanying protocol,

it is understood that the terms of the treatment of the most favored nation in this Treaty are to be interpreted as immediate, and unconditional unless expressly otherwise provided.

The Kingdom of the Serbs, Croats and Slovenes,1 after

'The treaty has now been ratified by Jugoslavia. See despatch from commercial attaché, Oct. 6, 1923, Foreign Tariff Files, Department of Commerce.

continued negotiations, agreed upon and signed a commercial convention with Poland, on October 23, 1922, containing, among others, the following provisions:

Citizens or subjects of each country are to enjoy in the other "the same rights, privileges, immunities, favors and exemptions as the citizens or subjects of the most favored nation." The same is true as regards their juridical status, their goods and chattels and their rights and interests. Internal taxes in one country "are not to affect the products, merchandise or articles" of the other country "more or more embarrassingly" than "indigenous products" or products of the most favored nation.

Moreover,

All the products of the soil and of industry, originating in or proceeding from Poland, which are imported into the Kingdom of the Serbs, Croats and Slovenes, and all products of the soil and of industry originating in or proceeding from the Kingdom of the Serbs, Croats and Slovenes, which are imported into Poland, destined either for consumption, warehousing or reexportation, or in transit, are to be subjected, during the duration of the present Convention to the treatment accorded to the most favored nation, and namely, cannot be in any case submitted to duties either higher or other than those which are levied on the products or merchandise of the most favored nation.

Exports destined for one of the Contracting Parties are not to be burdened by the other with duties or taxes other or higher than are levied on the export of the same articles in the countries most favored in this respect.

Each of the Contracting Parties binds itself, thus, to grant to the other immediately and without other conditions all favors, privilege or reduction of duties or taxes which it has already accorded or may in the future accord, in the respects mentioned, either permanently or temporarily to a third nation.1

1Article 7.

Exception is made, however, in the case of border traffic regulations, customs unions and the provisional customs régime existing between the Polish and German portions of Upper Silesia. Customs formalities and railroad rates form the subjects of other most-favored-nation guarantees. Clauses tending to liberalize restrictive and prohibitive regulations affecting trade between the two countries are included, as well as the following interesting article:

The two Contracting Parties agree that goods originating in and proceeding from one of the Contracting Parties are not to be burdened upon their entrance into the territory of the other Party with Customs multiples imposed for motives proceeding from the depreciation of the exchange value of the currency of the exporting country.1

The policy of Poland in the commercial treaties heretofore negotiated shows a readiness to reconcile itself with the policies of other countries; there would appear to be no reason for exception should the United States seek a treaty based upon the policy of Section 317.

68. RUSSIA

The Union of Soviet Socialistic Republics, extending from the Baltic Sea to the Pacific Ocean and, with its associated and dependent countries, embracing more than eight million square miles of territory and containing about 132 million inhabitants, is not only the world's largest contiguous area under unitary political control, but is a land offering natural resources of almost every variety and commercial potentialities of inestimable value. General recovery appears to be in progress from the debâcle of the World War and the subsequent revolutions which overthrew the Russian imperial régime. Likewise, a moderating influence appears

Article 9.

to be at work accommodating some of the stricter tenets of communism to the practicable attainments of economic life. Exports from the United States to Russia in Europe averaged, in 1910-1914, about twenty-three million dollars annually. In 1919 the corresponding figure was about thirty million dollars; in 1920, fifteen millions; in 1922, twenty millions. Imports into the United States from Russia were valued at an average of about nineteen millions in the years 1910-1914 and at about a quarter of a million in 1922.1

Until such time as the United States is prepared to accord recognition to the Soviet Government, the question of negotiating a commercial treaty with Russia must be held in abeyance. The de jure recognition by Great Britain and by Italy, early in 1924, however, suggests that at no remote date the other Great Powers may decide upon a similar

course.

The Soviet authorities have negotiated for trade agreements with a considerable number of countries. In those actually concluded an opportunist policy is apparent. Russia appears, however, to have adopted a definite policy of favoring, in matters of commerce, those countries that are willing to enter into treaties and so extend recognition.

3

Great Britain and Russia signed a trade agreement on March 16, 1921, which was, by its terms, "to come into force immediately". The first article contains the following provision:

Both parties agree not to impose or maintain any form of blockade against each other, and to remove forthwith all obstacles hitherto placed in the way of the resumption of trade between the United Kingdom and Russia in any com

'Statistical Abstract of the United States, 1922, p. 357.

'See "Treaties and Trade Agreements of Soviet Russia," Commerce Reports, June 25,1923, p. 809.

'See supra, subdivision 23, note.