The Acting Secretary of State to the Ambassador in France (Edge)

No. 137

Sir: I am transmitting herewith two copies of a statement entitled “Basic Principles of United States Taxes”, prepared by the Treasury Department together with the copies of laws and regulations mentioned therein.8 It is suggested that a set of these documents be kept in the Embassy’s files and that the other set be transmitted through appropriate channels to Mr. Borduge, Director General of Taxation, in order that he may study them before the informal discussions to take place during May with representatives of this Government in connection with the double assessment of taxes upon American firms operating in France through French subsidiaries.

In this connection, I confirm the Department’s telegram of March 19, 1930,8 advising you that Mr. E. C. Alvord, Special Assistant to the Secretary of the Treasury, Mr. Mitchell B. Carroll, formerly of the Department of Commerce and now attached to the Office of the General Counsel, Bureau of Internal Revenue and Professor Thomas S. Adams of Yale University, are sailing on the George Washington on April 23. They should therefore reach Paris in the early part of May. As at present advised, it is contemplated that they will [Page 9] remain in Paris until such time as it may be necessary for Professor Adams and Mr. Carroll to proceed to Geneva in connection with the meetings of the Fiscal Committee of the League of Nations. Inasmuch as it is understood that Mr. Borduge will also proceed to Geneva for the same purpose, it is believed that the discussions could profitably be continued at that place. It is believed that a total period of thirty days should be sufficient at this time to cover the discussions in both cities. Mr. de Wolf who has been handling in the Department the question of double taxation in France, is sailing on the Majestic on May 15 to spend his annual leave in Europe and expects to be in Geneva on May 22, at which time he will be prepared to join in the discussions until their conclusion.

As indicated in the Department’s telegram No. 62 of March 19, 1930, it is presumed that the discussions will consist largely of canvassing the present situation and exploring the possibility of remedial action either in the shape of legislation or the conclusion of a treaty. While it is not expected that the informal discussions to be initiated in May will lead directly to the conclusion of a double taxation treaty between the United States and France, the bases for such a treaty will, however, be thoroughly gone into and the possible limits within which this Government will be prepared to conclude such a treaty will be explained to the representatives of the French Government.

The Embassy will, I know, extend every possible assistance in connection with the forthcoming informal conference. Your past interest and endeavors in this case have been of great assistance to the Department in determining the best procedure to be followed with a view to protecting the important American interests involved in this case. A separate instruction is being sent to you with regard to the payment of expenses of this Government’s representatives.9

I am [etc.]

J. P. Cotton
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