The Secretary of State to the Ambassador in Germany (Houghton)
Sir: Referring to the Department’s instruction dated January 22, 1925,2 in reply to your Embassy’s despatch No. 843 of December 12, 1924, concerning taxation by Germany of the earnings derived from the operation of ships documented under the laws of the United States, you are informed of the receipt of advices from the Secretary of the Treasury that Germany is now considered to have satisfied the equivalent exemption provision of Section 213 (b) (8) of both the Revenue Acts of 1921 and 1924, and that accordingly the income of a nonresident alien or foreign corporation from sources within the United States which consists exclusively of earnings of a ship or ships documented under the laws of Germany is exempt from Federal income tax and such exemption is applicable for the year 1921 and subsequent years.
It is suggested that the German Foreign Office be informed of the ruling of the Treasury Department.3
I am [etc.]