881.512/60

The British Ambassador (Howard) to the Secretary of State

No. 573

Sir: The International Administration of the Tangier Zone is desirous of securing the consent of the United States Government to the application to United States nationals of any legislative measures which may be passed, increasing existing or introducing new taxation. It is particularly anxious to secure such consent in respect of a measure relating to the consumption duties, the early introduction of which is considered to be most important, as without it it will not be possible to balance the Budget of the Zone.

I have the honour, under instructions from His Majesty’s Principal Secretary of State for Foreign Affairs, to inform you that His Majesty’s Government, who have learned that this desire on the part of the Administration is being brought to the notice of the United States Government by the United States Diplomatic Agent at Tangier at the request of the Resident General of the French Protectorate, earnestly hope that the United States Government will see their way to comply with it.

I am, in expressing this hope, to explain that so long as Italy was not a party to the international regime at Tangier and Italian subjects were not amenable to the laws enacted by the Administration, it was found impracticable to introduce additional taxation, either direct or indirect. It was indeed necessary on this account to suspend certain legislation passed by the Assembly. This difficulty has not, unfortunately, disappeared with the accession of Italy to the Tangier Statute, and the Administration feels that the continued immunity of United States nationals from the fiscal measures to be introduced, would inevitably prove an invincible obstacle to the enforcement of those measures, which, I am to point out, will be such only as are necessary to ensure the proper administration of the Zone and place its finances on the sound basis which it has not hitherto been possible to attain. I am to emphasize the fact that the United States Government are in no way being asked to surrender any of the rights [Page 511] which they enjoy in Tangier, and which are fully recognised by the International Administration. They would remain in undisputed possession of those rights, just as they and His Majesty’s Government remain in possession of their capitulatory rights in the French Zone although, out of international courtesy and in the interests of the successful administration of the zone, they in practice make the protectorate laws applicable to their nationals. It would, of course, always be open to the United States Government to withhold their consent in any particular instance where they considered that their interests might otherwise be prejudiced.

I have [etc.]

Esme Howard