Sir,

Periodically, for a number of years, consideration has been given to negotiating a treaty of commerce between Canada and the United States. The question cannot be regarded as urgent since the absence of a treaty does not appear to impose serious hardships upon Canadian nationals doing business in the United States. It is, nevertheless, true that legislation in various States imposes disabilities on aliens and such legislation can only be overridden by a treaty. A case in point is the provision in the laws of a number of States that licenses for the manufacture and sale of alcoholic beverages are restricted to United States citizens. To take another example, certain States forbid the ownership of real property by aliens. In both cases these laws are understood not to apply to the nationals of countries which have treaties with the United States of which there are said to be between twenty and thirty. Such treaties usually also define the status of consular offices and consular property in such a way as to provide certain immunities and exemptions not accorded in the absence of a treaty.

The Department was told informally some time ago by the United States Embassy that the State Department would be prepared to negotiate a standard treaty on commerce, friendship and consular rights. During the war it was regarded as impracticable to enter into such negotiations because of the more urgent matters that required attention, but the time has come when the Department can devote some attention to the problem. To assist us in considering its various aspects we should be grateful for the observations of the Embassy based on any relevant matters which may have come to its attention. A copy of this despatch is being sent to the Consul General in New York with a similar request for comment.

I should add that the Department has received very few representations on this subject. Cases involving licenses to sell alcoholic beverages have occasionally been raised by the Embassy and there was correspondence some time ago which made it clear that the Consul General in New York could not be exempted from certain State taxes in the absence of a treaty. We have recently received representations from the legal firm of Lash and Lash in Toronto on the subject of alcoholic beverage laws and a copy of this letter dated February 23rd is enclosed for your information. This is the only specific request for action which has been received by the Department and we have re-plied by stating that the question of negotiating a treaty is under consideration and asking for any indication that can be given, of the extent to which State laws in practice impose disabilities on Canadians.

I have etc.
R. M. MACDONNELL
for the Secretary of State
for External Affairs