811.512351Double/30: Telegram
The Ambassador in France (Edge) to the Secretary of State
160. Please transmit following to Treasury from Alvord, reply to which is desired today:
“Borduge, under instructions from Minister of Finance, asks as consideration for concessions on the part of France that on reciprocal basis we exempt from Federal surtaxes all income derived from sources within the United States by nonresident French citizens including income from carrying on business, from personal services, and from real estate, as well as income from dividends and interest and other miscellaneous income proposed to be exempt by Hawley bill.
I do not regard concessions on our part as of substantial practical importance but obviously there will be real difficulties with Congress which have been fully explained French representatives. I recommend that Treasury take following position:
- 1.
- [Paraphrase.] Should there be in your opinion a reasonable chance of obtaining approval by Congress of the proposed convention which would contain such exemptions, that you authorize us to offer, [Page 16] if in our judgment it is desirable, surtax exemption as requested, it being understood that we will concede no more than is necessary.
- 2.
- Should there be no chance of approval by Congress, that we be authorized by you to offer, if in our judgment it is desirable, surtax exemption on all income except business, personal service and real estate as in Hawley bill. [End paraphrase.]
France apparently is willing to settle main points of controversy making substantial and satisfactory concessions along lines of my letter and tentative draft enclosed therewith. Please have State Department cable and concur in your reply. Complete text of proposed agreement will be submitted for your approval before any final commitment. Should appreciate reply by tomorrow noon if possible. Alvord.”
- Telegram in three sections.↩