811.512351 Shipping/3
The French Chargé ( Sartiges ) to the Secretary of State
Mr. Secretary of State: The Revenue Act of 1921, Section 213,11 provides that the profits of vessels under the flag of countries which will grant a like exemption to American vessels will be free from taxation in the United States.
Following the example just set by the United States the French Parliament on April 29, 1926, inserted in the French law of finance Article 5, which has the following provision:
“Profits made by the navigation concerns established abroad and derived from the operation of foreign vessels are free from taxation on condition that the country whose flag is displayed by those vessels grant a like exemption to French navigation concerns.”
However, the same Article 5, the full text of which is here inclosed,12 provides “the modus of the said exemption and the taxes coming under the exemption shall be in the several countries fixed by a diplomatic agreement.” My Government, therefore, instructs me to ask Your Excellency whether the United States Government would be inclined to enter with it into an arrangement determining the modus of the contemplated exemption and the taxes coming under the exemption.
The time from which the agreement would go into operation might be set at January 1, 1921. I should be thankful to Your Excellency if you would kindly let me know whether you share the views of the French Government and if so in what shape the said agreement might, in your opinion, be made.
Be pleased [etc.]