890g.5123/–: Telegram

The Secretary of State to the Consul at Baghdad (Randolph)

Your despatch 524, July 1, 1927. Department assumes you and British authorities are familiar with the legal aspects of this question. This Government’s position must continue to be that until a treaty agreement providing to the contrary enters into force the collection of a tax of this nature from American firms is in contravention of American treaty rights.

London Embassy reports that the pending American-British-Iraq treaty is under discussion between Iraq Government and British Colonial Office and that an early settlement is probable.

In the interim this Government would be pleased to consider any request for its consent to levying of tax on American nationals. In other cases in extraterritorial countries it has acceded to such requests, e. g. in agreeing, upon the request of the French Government, to the collection from Americans of new duties in Syria prior to the entry into force of the American-French-Syrian Mandate Convention.79

You may in your discretion bring the foregoing to the attention of interested American firms adding, however, that should they, for reasons of business policy, desire to pay the tax this Government has no objection to such individual action.