a "mother country" to one or more of the American nations, should be excluded. It would be difficult to say that one non-American country should be represented and not any other, and in any case the presence of one non-American country would change the character of the conference, which would no longer be a conference of purely American States to discuss purely American problems.

TRANSFER OF THE PAN AMERICAN UNION FROM WASHINGTON TO SOME OTHER CAPITAL

There have been frequent rumors that a proposal will be made at the Sixth Pan American Conference to transfer the seat of the Pan American Union from Washington to the capital of some Latin American nation. Panama, Santo Domingo and Uruguay have been mentioned specifically. It is said that this action would be based on the theory that in Washington the Pan American Union is too much influenced by the State Department and dominated by the United States. Also that the Pan American Union containing as it does a great majority of Spanish-speaking countries should have its seat in a Spanish-speaking capital.

The Department does not believe that any serious effort will be made to adopt such a plan at the Sixth Conference. If a suggestion is made to include this question among the agenda it would seem desirable that the United States delegates, while being careful not to express their approval, should not, unless absolutely necessary, take a leading part in opposing it. It is felt that some of the Latin American delegates will see the disadvantages of opening this question and the advantages of maintaining the Union in Washington; . .

A number of arguments against such a change will readily occur to you, among others:

1). The eminent suitability of the present Pan American building in Washington, which was constructed on land donated by the United States, at a cost of about $850,000, the entire amount being contributed by the well known philanthropist Andrew Carnegie. This building could not be duplicated in another locality for anything like its original cost.

2). The advantages which the United States offers as a center of information on all subjects connected with the advancement of human knowledge and welfare. This country contains the headquarters of many organizations working for world improvement in sanitary, engineering, economic and social matters.

3). The fact that Washington is the only capital on the American continents at which all Latin-American nations constantly maintain a representative.

CANADA

The International Conferences of American States, commonly called the Pan American Conferences, are, as their name implies, conferences of American political entities to consider and discuss matters of special importance to the States of the western hemisphere. Should there be no need to discuss matters affecting the States of this hemisphere there would be no reason to hold such conferences, and, on the other hand, should there be a necessity of discussing topics and problems of world wide concern, or having a relation at least to other political entities not included in the western hemisphere, the necessity would be not for a conference of American States but for some other form of conference of different scope.

The Pan American Conferences are essentially conferences of governments and not of mere geographical groups or territorial units. Being conferences attended by the official representatives of Governments, they necessarily reflect the exigencies and policies of the Governments participating. If colonies, possessions or dominions, whose foreign relations are controlled by European States, were represented in these conferences, the influence and policies of European Powers would be injected into the discussion and disposition of questions affecting the political entities of this hemisphere. Whatever value such conferences would have it would not be that attaching to a conference distinctively American. Should Canada be proposed as a Member of the Pan American Union, you will be guided by the oral instructions given by the Secretary of State to the Delegation at its meeting at the Department of State on December 28, 1927.

LEAGUE OF NATIONS

Reference may here be made also to the participation, which has been informally suggested, of representatives of the League of Nations in the Pan American Conference. It should be understood that no disparagement or criticism of the League of Nations is intended, when it is observed that the Pan American Conference is organized upon a distinct and separate basis. The scope of the League of Nations is intended to be world-wide and a number of American States are members of the League and are thus able to express their point of view on matters of world-wide import which come before the attention of the Council and the Assembly of the League respectively. The Pan American Conference exists because of the distinct interests of American States which, without antagonism to any world relationship, makes it desirable for them to confer with respect to the problems which especially relate to States of this hemisphere.

There is, of course, not the slightest objection for cooperation with the technical services of the League of Nations through the exchange

of reports and information, and reciprocal advantage may thus appropriately be taken of statistics and reports of investigation. Participation of representatives of the League of Nations in the Pan American Conference, however, would bring to the Conference the viewpoints and policies of the States who are members of the League of Nations and are not American States and thus fundamentally alter the nature of the Conference itself.

The scope of the Pan American Conference is defined by Pan American interests and aims and if its usefulness is to be preserved, the integrity of the Conference as an exclusively American Conference should be maintained.

[Appendix 2]

Special Economic Memorandum

Trade between the United States and Latin America has shown a steady increase during the period which has intervened since the Fifth Conference. Exports from the United States to the Latin American countries in 1923 amounted to $693,000,000, and in 1926 to $882,000,000, showing an increase of about 27 per cent. Imports into the United States from the Latin American countries in 1923 amounted to $1,050,000,000, and in 1926 to $1,104,000,000, showing an increase of about 5 per cent. Thus the total trade of the United States with the Latin American countries amounted in 1923 to $1,744,000,000, and in 1926 to $1,986,000,000, or an increase of about 14 per cent. In 1923 this trade with the Latin American countries constituted 21.9 per cent of the total world trade of the United States, and in 1926 21 per cent, the Latin American share of the United States total trade decreasing in spite of the great gain in Latin American trade because of the increase in trade between the United States and other parts of the world. During this entire period the visible balance of trade was in favor of the Latin American countries to a very large extent. Trade with the United States amounts to about 36 per cent of the total trade of the combined Latin American countries.

Cuba ranks first among the countries of Latin America, not only in imports from but in exports to the United States. Our imports of merchandise from Cuba in 1926 were valued at $250,600,000, and our exports at $160,488,000. The amount of United States capital invested in Cuba is between $1,250,000,000 and $1,500,000,000. Moreover, a large amount is spent in the island annually by tourists from the United States. From these figures it is apparent that Cuba presents a broad field for the extension of American manufactured exports.

The past five years have witnessed an unprecedented flow of American capital to Latin America, our total investment in that

field being now estimated at $4,800,000,000, of which $1,250,000,000 to $1,500,000,000 are invested in Cuba. While the Latin American governments and people in general recognize the advantages derived from the use of this capital, which permits them to develop their natural resources; improve their means of communication; and create municipal improvements and sanitary works; nevertheless a growing uneasiness has lately been manifested throughout Latin America lest this dependence on the American financial market may lead to some form of economic domination, or even, eventually to armed intervention. It is possible that this feeling may be expressed at the Sixth Pan American Conference. Should this be the case you will, while refraining from committing this Government as to what action it might or might not have to take to protect American holders of foreign securities in unforeseen contingencies, make it plain that Americans investing their money abroad seek only that justice and fair treatment to which creditors are entitled by universally accepted principles of law and that the United States Government expects that such fair treatment will be accorded them and asks no more.

Treaty Series No. 840

Conventions 54

Convention Regarding Commercial Aviation, Signed at Habana, February 20, 1928 55

The Governments of the American Republics, desirous of establishing the rules they should observe among themselves for aerial traffic, have decided to lay them down in a convention, and to that effect have appointed as their plenipotentiaries:

[Here follows list of names of plenipotentiaries.]

Who, after having exchanged their respective full powers, which have been found to be in good and due form, have agreed upon the following:

ARTICLE I

The high contracting parties recognize that every state has complete and exclusive sovereignty over the air space above its territory and territorial waters.

"Of the eleven conventions adopted at Habana on Feb. 20, 1928, the United States ratified six, the texts of which are printed herewith. The other conventions were those with respect to (1) private international law, (2) revision of the convention of Buenos Aires regarding literary and artistic copyright, (3) treaties, (4) diplomatic officers, and (5) asylum. For the texts of these five conventions, see Sixth International Conference of American States, Havana, 1928, Final Act, and Report of the Delegates of the United States of America to the Sixth International Conference of American States.

"In English, Spanish, Portuguese, and French; English text, only, printed. Ratification advised by the Senate, Feb. 20, 1931 (legislative day of Feb. 17, 1931); ratified by the President, Mar. 6, 1931; ratification of the United States deposited with the Government of Cuba, July 17, 1931; proclaimed by the President, July 27, 1931.

ARTICLE II

The present convention applies exclusively to private aircraft.

ARTICLE III

The following shall be deemed to be state aircraft:

a) Military and naval aircraft;

6) Aircraft exclusively employed in state service, such as posts, customs, and police.

Every other aircraft shall be deemed to be a private aircraft.

All state aircraft other than military, naval, customs and police aircraft shall be treated as private aircraft and as such shall be subject to all the provisions of the present convention.

ARTICLE IV

Each contracting state undertakes in time of peace to accord freedom of innocent passage above its territory to the private aircraft of the other contracting states, provided that the conditions laid down in the present convention are observed. The regulations established by a contracting state with regard to admission over its territory of aircraft of other contracting states shall be applied without distinction of nationality.

ARTICLE V

Each contracting state has the right to prohibit, for reasons which it deems convenient in the public interest, the flight over fixed zones of its territory by the aircraft of the other contracting states and privately owned national aircraft employed in the service of international commercial aviation, with the reservation that no distinction shall be made in this respect between its own private aircraft engaged in international commerce and those of the other contracting states likewise engaged. Each contracting state may furthermore prescribe the route to be followed over its territory by the aircraft of the other states, except in cases of force majeure which shall be governed in accordance with the stipulations of Article 18 of this convention. Each state shall publish in advance and notify the other contracting states of the fixation of the authorized routes and the situation and extension of the prohibited zones.

ARTICLE VI

Every aircraft over a prohibited area shall be obliged, as soon as this fact is realized or upon being so notified by the signals agreed upon, to land as soon as possible outside of said area in the airdrome