862.504/337

The Chargé in Germany (Gordon) to the Acting Secretary of State

No. 2512

Sir: With reference to my telegram No. 106 of June 17, and the Department’s answering telegraphic instruction No. 75 of June 22, I have the honor to report that I have made the oral representations directed at the Foreign Office and impressed upon it the necessity for prompt action before any adverse administrative procedure should tend to become crystallized. Dr. Dieckhoff quite appreciated the point and [Page 462] certainly showed no inclination to contest our view that the law may have the effect of contravening our Treaty of Friendship, Commerce and Consular Rights with Germany; he promised that he would do his best to expedite an answer, but, as the Department is aware from various despatches from this Embassy of the impotence into which the Foreign Office has fallen, a prompt answer can not be too confidently expected.

As for the law in question, it is an omnibus law and the only pertinent part is Chapter 2 thereof, the text and translation of which are herewith transmitted.

I am also forwarding, as instructed, a memorandum in the premises prepared by the Consulate General.1 This memorandum may be regarded as merely preliminary, and as further specific instances of discrimination effected by the law come to hand—which they undoubtedly will in considerable number—they will be transmitted to the Department.

Respectfully yours,

George A. Gordon
[Enclosure—Translation]

Chapter II. of the Law of June 1, 1933; for Decreasing Unemployment in Germany

(Reichsgesetzblatt No. 60 of June 2, 1933, page 323.)

Tax Exemption for Replacement Acquisition

In calculating profit for the purposes of paying income tax, corporation tax and trade tax, the following is valid for the tax periods ending after June 30, 1933 and before January 1, 1935, the provisions of paragraph 16 of the Income Tax Law notwithstanding:

Expenditures for the acquisition or the manufacture of machines, tools, and similar objects which constitute trade or agricultural investments, can, in the tax period in which the acquisition or manufacture takes place, be entirely deducted, provided that the following four conditions are met:

(1)
The new article must be of inland [domestic] production.
(2)
The taxpayer must have acquired or manufactured the new article after June 30, 1933 and before January 1, 1935.
(3)
The new article must replace a similar one which was previously used in the establishment.
(4)
It must be proven that the use of the new article does not lead to a decrease in the number of workmen employed in the establishment of the taxpayer.

  1. Not printed.