1 The treaties follow, with the number of the article and paragraph containing the immunity waiver added after the citation. Italy, 1948 (63 Stat. (Pt. 2) 2225, Art. XXIV-6); Uruguay, 1949, not in force (S. Exec. D, 81st Cong., 2d Seas., Art. XVIII-5); Ireland, 1950 (1 U.S. Treaties 785, Art. XVIII-2); Colombia, 1951, not in force (S. Exec. M, 82nd Cong., 1st Sess., Art. XVIII-2); Greece, 1951 (5 U.S. Treaties 1829, Art. XIV-5); Israel, 1951 (5 U.S. Treaties (Pt. 1) 550, Art. XVIII-3); Denmark, 1951 (T.I.A.S., No. 4797; S. Exec. I, 82nd Cong., 2d Sess., Art. XVIII-3); Japan, 1953 (4 U.S. Treaties (Pt. 2) 2063, Art. XVIII-2); Federal Republic of Germany, 1954 (7 U.S. Treaties 1839, Art. XVIII-2); Haiti, 1955, not in force (S. Exec. H, 84th Cong., 1st Sess., Art. XVIII-2); Iran, 1955 (8 U.S. Treaties 899, Art. XI-4); Nicaragua, 1956 (9 U.S. Treaties 449, Art. XVIII-3); Netherlands, 1956 (8 U.S. Treaties 2043, Art. XVIII-2); Korea, 1956 (8 U.S. Treaties 2217, Art. XVIII-2).

2 5 U.S. Treaties (Pt. 1) 570; T.I.A.S., No. 2948.

3 William W. Bishop, Jr., ‘ ‘ New United States Policy Limiting Sovereign Immunity,'' 47 A.J.I.L. 96 (1953) ; Eobert B. Wilson, “Postwar Commercial Treaties of the United States,” 43 A.J.I.L. 272 (note) (1949); Eobert R. Wilson, “ A Decade of New Commercial Treaties,” 50 A.J.I.L. 929 (1956); Herman Walker, Jr., “Treaties for the Encouragement and Protection of Foreign Investment: Present United States Practice , “ 5 A. J. Comp. Law 238 (1956); Jean-Flavien Lalive, “L'immunite de juri diction des 6tats et des organisations internationales,” 84 Hague Academy Becueil des Cours 238, 254, 274 (note), 280-281 (1953, I I I ) . See also the author's article, “The Immunities of the State and Government Economic Activities,” 24 (Part I) Law and Contemporary Problems 299, 312 (1959).

4 The early period of U.S. commercial treaty policy is covered in Setser, The Com mercial Reciprocity Policy of the United States, 1774-1829 (Philadelphia, 1937), but for the period since then, it is necessary to consult numerous individual monographs, or the treaties and diplomatic correspondence. See, however, S. P. Bemis, Diplomatic History of the U.S., Chs. 17, 38 (N.Y., 1950). The most comprehensive work on the international law aspects of commercial treaties is B. R. Wilson, United States Com mercial Treaties and International Law (New Orleans, 1960).

5 Dept. of State Pub. 6565, entitled ‘ ‘ Commercial Treaty Program of the United States,” January, 1958; Walker, “Treaties for the Encouragement and Protection of Foreign Investment,” loc. cit.;Setser, “Treaties to Aid American Business Abroad,“ 40 Foreign Commerce Weekly 3 ff. (U.S. Dept. of Commerce, Sept. 11, 1950). Although numerous official statements have been made emphasizing the “private enterprise” purpose of commercial treaties, the policy statement contained in the Mutual Security Act of 1954, as amended, which is followed by a clause that provides that the President shall “accelerate a program of negotiation treaties of commerce and trade … which shall include provisions to encourage and facilitate the flow of private investments … “ is sufficiently illustrative. 22 U. S. C. 1933.

6 Miriam E. Oatman, “The Nationalization Program in Czechoslovakia,” 15 Dept. of State Bulletin 1027-1031 (1946); Leon Goldenberg and Laure Metzger, “The Polish Nationalization Law,” 15 Dept. of State Bulletin 651-654 (1946); “Private Enterprises Nationalized in Yugoslavia” (Press Release), 15 Dept. of State Bulletin 1150 (1946).

7 William A. Eobson, ‘ ‘ The Public Corporation in Britain Today,'’ 63 Harvard Law Eev. 1321-1348 (1950); William N. Loucks, Comparative Economic Systems 277-436 (N.Y., 1957).

8 Henry P. De Vries and Berthold H. Hoeniger, ‘ ‘ Post-Liberation Nationalizations in France,” 50 Columbia Law Eev. 629 (1950).

9 Byrnes-Blum agreement, May 28, 1946, 61 Stat. (4) 4175, 14 Dept. of State Bulletin 997 (1946); U.S.-Czechoslovak agreement relating to commercial policy, 61 Stat. (3) 2431, 15 Dept. of State Bulletin 1005 (1946). A treaty was not concluded with either country, however.

10 The text of the Tate letter is in 26 Dept. of State Bulletin 984 (1952). See also W. W. Bishop, Jr., “New United States Policy Limiting Sovereign Immunity,” 47 A.J.I.L. 96 (1953); Michael H. Cardozo, “Sovereign Immunity: the Plaintiff Deserves a Day in Court,” 67 Harvard Law Eev. 608 (1954).

11 There is no better established canon of treaty interpretation than that which requires that a treaty be considered as a whole. 1 Oppenheim, International Law 953 (8th ed., 1955, edited by H. Lauterpacht); McNair, The Law of Treaties 198 (1938); Crandall, Treaties, Their Making and Enforcement 317 ff. (1916); 5 Hackworth, Digest of International Law 222-224.

12 Art. VII, treaty with Israel. The development of the terminology of the treaties has been a continuing process since 1946, and, moreover, negotiating problems in the cases of individual countries have necessitated some variation in language from treaty to treaty. Consequently, not all of the relationships of the various provisions discussed here with reference to the treaty with Israel can be shown as conclusively for every other treaty. The fundamental rationale does not vary, however.

13 In the treaty with Israel, for example, the term ‘ ‘ enterprise'’ is employed in the following provisions: Art. I ; Art. VI, pars. 4, 5; Art. VII, pars. 1, 2, 3, 4; Art. VIII, par. 1; Art. IX, par. 3; Art. XVII, par. 1; Art. XVIII, pars. 1, 2, 3.

14 Examples are: W. H. Kiekhofer, Economic Principles, Problems and Policies 32 (N.Y., 1951); P. F. Gemmill and E. H. Blodgett, Economic Principles and Problems, Vol. I, p. 79 (2 vols., N.Y., 1948); J. T. Wendzel, the Dynamics of Capitalism 29-31 (N.Y., 1956); Norman S. Buchanan, The Economics of Corporate Enterprise 13 (N.Y., 1940); S. H. Schlichter, Modern Economic Society 134, 144 (N.Y., 1935).

15 Op. cit.79, italics supplied.

16 Op. cit.13, italics supplied.

17 The various senses of “enterprise” as used in economic writing are discussed by L. M. Eraser in his Economic Thought and Language (London, 1937), at page 318, as follows: “ I n ordinary language the word has two main meanings. In the first instance it refers to a thing projected or attempted—particularly if it be of a bold or hazardous nature. But it may also be used subjectively of the quality or qualities possessed by those who undertake such projects—that is to say, it may be in effect a synonym for 'boldness’ or initiative. Both these meanings are to be found in economic writings, but in addition the word has come to be used in at least two rather more specialized ways. On the one hand it has become more concrete, standing for the result or objective realization of a project in the economic field—viz. a firm or business unit. And on the other hand it has become more abstract, being used of the activities involvedin initiating or running such a project… . “

18 Loevinger, The Law of Free Enterprise 86 (N.Y., 1949). The statement is in the nature of a definition italicized for purposes of the present paper.

19 A. A. Berle, ‘ ‘ The Theory of Enterprise Entity,'’ 47 Columbia Law Eev. 344, 354 (1947).

20 52 Columbia Law Rev. 985. Other passages in the article contribute to an understanding of the “enterprise” concept. The fact that Kronstein prefers to employ the term to refer to the major central business units does not affect the bearing of his discussion upon the treaty terminology.

21 A more universal acceptance of the term is indicated by its use in the same sense in the model income tax convention adopted in 1943 at Mexico City at a conference held under the auspices of the League of Nations Fiscal Committee. League of Nations Fiscal Committee, Model Bilateral Conventions for the Prevention of International Double Taxation and Fiscal Evasion, passim,but especially pp. 16, 19 (Geneva, 1943).

22 5 U.S. Treaties 2768.

23 Loc. cit.245.

24 This entry and establishment provision has been properly described as ‘ ‘ the heart of the treaty as an investment instrument.'’ Walker, ‘ ‘ Treaties for the Encouragement and Protection of Foreign Investment,” 5 A. J. Comp. Law 236. It is often the most difficult part of a treaty to negotiate, since its acceptance is fully recognized as establishing a permanent policy of permitting the establishment of the alien enterprise without discrimination.

25 Art. XI of the treaty with Israel.

26 See Art. I l l , U.S.-Germany Convention for the Avoidance of Double Taxation, T.I.A.S., No. 3133.

27 See Walker, ‘ ‘ Provisions on Companies in United States Commercial Treaties,'' 50 A.J.I.L. 373 (1956). For the interpretation of national treatment as the treatment accorded to out-of-State corporations, see Art. XXII, par. 4, Israel treaty.

28 The coverage of the treaty provision is much narrower than that proposed by the experts of the Harvard Besearch in International Law in Art. II of the Draft Convention on the Competence of Courts in Eegard to Foreign States. The latter would not only deny immunity to a state when “ i t engages in an industrial, commercial, financial or other business enterprise” in another state, but also if “ i t does an act there in connection with such an enterprise wherever conducted.” The latter coverage, of course, is not provided in the commercial treaty. 26 A.J.I.L. Supp. 451, 597 (1932).

29 Those with Korea, Netherlands and Nicaragua. ‘’ Activity for profit'’ was again used in the treaty with Haiti.

30 See Art. IX, par. 3 of the treaty with Israel.

31 Lalive, loc. cit,272-281; B. Fensterwald, “Sovereign Immunity and Soviet State Trading,” 63 Harvard Law Eev. 624 (1950); Note, “Execution of Judgments Against the Property of Foreign States,” 44 ibid.963 (1931).

32 There are a number of decisions and opinions that support the view that the language used would not override, for example, Sec. 892 of the Internal Eevenue Code, which exempts foreign governments from taxation of income from any source within the U.S. 5 Hackworth 179, 185; 2 Hyde, International Law 1457; Crandall, Treaties 183-199. The principles concerning the taxation of a foreign state are discussed in Charles Fairman and Archibald King, “Taxation of Friendly Foreign Armed Forces,“ 38 A.J.I.L. 258 (1944).

33 The establishment of foreign state-controlled insurance entities in this country was checked by State action. An attempt in 1955 by the Caisse Centrale de Eeassurance, a reinsurance company controlled by the French Government, to obtain a license to engage in business in Florida, resulted in the enactment of a law (F.S.A. 631.16) forbidding the licensing in that State of an insurer “owned, controlled, or operated by a foreign government or any agency thereof.” Similar action has since been taken by many other States. Such legislation, promoted by the organized private insurance interests, was further stimulated by efforts of a company controlled by an agency of the Province of Saskatchewan, Canada, to expand into some of the Northwestern States.

34 This is done under authority of 49 TJ.S.C. 482. See also the special agreement between the U.S. and The Netherlands providing for waiver of immunity of air carriers, June 19, 1953. 4 U.S. Treaties 1610. State-owned air carriers seem to be subjected by Art. 2 of the Warsaw Convention (1929) to liability for the death or injury of passengers and for loss or damage to goods or baggage during transportation, but the U.S. entered a reservation to that article. 4 Treaties (Trenwith) 5250.

35 2 Hackworth 436-442; 46 U.S.C. 747.

36 In addition to its strictly legal character, however, a treaty of the type here considered is essentially a political and diplomatic instrument. By far the greater number of questions of treaty obligation and interpretation are disposed of in the foreign offices and never reach the courts.

37 U.S. policy with respect to immunity in the case of this corporation is illustrated by the cases in 4 Hackworth 439-442.

38 I t is a well-settled axiom of treaty interpretation in the “United States that treaty rules do not bind a government as to its proprietary activities except to the extent that they specifically stipulate that such activities are covered. Heim v.McCall, 239 U.S. 175 (1915), and the line of cases applying and elaborating the doctrine of that case.

39 Art. XVIII, pars. 1 and 2, Israel treaty.

40 For an interpretation of the status of military post exchanges, see Standard Oil Co. v.Johnson, 316 U.S. 481. “From all this,” said the Court, “we conclude that the post exchanges as now operated are arms of the Government deemed by it essential for the performance of governmental functions. They are integral parts of the War Department, share in fulfilling the duties entrusted to it, and partake of whatever immunities it may have under the Constitution and Federal statutes.“

41 l2 XJ.S.C. 635.

42 7 U.S.C. 1701.

43 50 U.S.C. 986.

44 7 U.s.C. 1692.

45 22 TJ.S.C. 1933.

46 Public Law 85-141, 85th Cong.

47 Export-Import Bank of Washington, Eeport to the Congress for the Twelve Months Ending June 30, 1957 (Pts. I and I I ) ; Olin S. Pugh, The Export-Import Bank of Washington (Charleston, S.C., 1957); Commission on Organization of the Executive Branch of the Government, Task Force Eeport on Overseas Economic Operations 373-382 (June, 1955). The legislation establishing the Bank can hardly be considered hostile to the idea of its being subjected in a proper case to foreign jurisdiction, however. Tt is specifically authorized to “ s u e and be sued, to complain and to defend in any court of competent jurisdiction.” 12 TJ.S.C. 635.

48 Dept. of State, The American Agricultural Attache’ (1957).

49 Commission on Organization of the Executive Branch of the Government, Task Force Report on Overseas Economic Operations 317-341; Sixth Semiannual Report on Activities Under Public Law 480 … Jan 1 through June 30, 1957.

50 Designated at different times in the past as Economic Cooperation Administration (to 1952), Mutual Security Administration (1952-1953), and Foreign Operations Administration (1954-1955).

51 Commission on Organization of the Executive Branch of the Government, Overseas Economic Operations, A Report to the Congress (June, 1955), and Task Force Report on Overseas Economic Operations (June, 1955); Eeport to Congress on the Mutual Security Program for the Six Months Ended June 30, 1957; Department of State, The Mutual Security Program, Fiscal Year 1958; Jerome Jacobson Associates, The Use of Private Contractors in Foreign Aid Programs (March, 1957), a study prepared at the request of the Special Committee to Study the Foreign Aid Program, U.S. Senate, 85th Cong., 1st Sess.

52 Public Law 85-141, 85th Cong.; International Cooperation Administration, Devel opment Loan Fund (Dec, 1957).

53 22 U.S.C. 1757; Sec. 205, Public Law 85-141, 85th Cong.