811.512362 Shipping/1: Telegram

The Secretary of State to the Ambassador in Germany (Houghton)83

79. Your 137, September 7, 9 A.M. Treasury Department states that it is necessary for a foreign government to exempt citizens of the United States not residing in the foreign country concerned as well as domestic corporations from tax on earnings from sources [Page 190] within such country derived exclusively from the operation of ships in order that such country may satisfy the equivalent exemption provision of Section 213 (b) (8) of the Revenue Act of 1921.

Therefore, if the Minister of Commerce [Finance] will issue the same instructions to the financial authorities relative to citizens of the United States not residing in Germany as have been issued relative to domestic corporations Germany will, Treasury Department states, have satisfied the equivalent exemption provision referred to and as soon as that Department receives notice that the additional instructions have been issued it will issue a statement that Germany has satisfied this exemption provision.

If the instructions referred to above are issued, report telegraphically the date on which they become effective. Also, inform Department whether Germany has ever demanded or collected, or under the law may demand, any income tax from citizens of the United States not residing in Germany or domestic corporations on earnings derived from the operation of ships from January 1, 1921, to the date on which above instructions if issued become effective.

  1. On Oct. 8, 1923, the Embassy in Berlin presented a note verbale to the German Foreign Office in conformity with this instruction. For text of note verbale, see Department of State, Executive Agreement Series No. 17, p. 2.