611.623 Coal/22

Memorandum by the Economic Adviser (Feis) of a Conversation With the First Secretary of the German Embassy (Meyer)

Dr. Meyer, who has very recently returned from Europe, called to discuss alleged violations of the most-favored-nation clause in our treaty with Germany by the taxes on coal and on yachts imposed by the Revenue Act of 1932.

Dr. Meyer’s purpose was to emphasize the seriousness with which Germany regarded the coal matter. Germany could not understand why it could receive no statement of the opinion of the United States Government as to whether or not the treaty was violated in respect of the excise tax on coal. The only answer it had received to its complaint was that the Government of the United States could express no opinion on the matter until it had been tried in the courts. Germany could not have confidence in assurances of prompt court action as the case might be decided in April but might be postponed until October, the Court of Appeals meeting only twice a year, and might then go to the Supreme Court and take years and years to decide. Germany attached the greatest [Page 508]importance to the question as a matter of principle as, in case the American tax were not held to be in violation of the treaty, Germany might wish to impose taxes which it could not do until the American tax was held not to be a treaty violation.

I told Dr. Meyer that the question he raised was a legal one, in the competence of the Legal Adviser rather than of the Economic Adviser’s Office. Dr. Meyer said he would try to see Mr. Hackworth57 tomorrow or would be glad to see Mr. Bundy or Mr. Rogers58 if advised by telephone that they cared to see him. His purpose was to emphasize the nervousness which he had found in Berlin regarding this situation and the importance which Berlin attached to it. He requested that I bring this to the attention of Mr. Bundy and Mr. Rogers.

Dr. Meyer also mentioned the Revenue Act of 1932 double excise on foreign boats.59 The Embassy had brought this to the Department’s attention and had heard nothing about it for four months, except that it had been referred to the competent authorities. This and the coal matter had aroused much concern in Berlin as to the effectiveness of the commercial treaty with the United States. I told Dr. Meyer I recollected nothing about the matter of the boats.

Dr. Meyer’s presentation of these matters was very competent.

  1. Green H. Hackworth, Legal Adviser of the Department of State.
  2. Harvey H. Bundy and James Grafton Rogers, Assistant Secretaries of State.
  3. For previous correspondence on this subject, see Foreign Relations, 1928, vol. ii, pp. 936 ff.