811.512351 Double/185: Telegram

The Ambassador in France (Straus) to the Secretary of State

208. Reference Department’s number 41 of January 27, 4 p.m., my telegram No. 138 of February 21, 12 noon, and despatch number 678 of March l.9

Parliament adjourned yesterday reassembles May 15th. During the past fortnight Embassy has been making strong and urgent representations for ratification double taxation treaty and had assurances from Barthou, Herriot,10 Tardieu,11 Germain-Martin12 that ratification would be asked of Parliament by Government. However though all [Page 170] formalities including signature of President Lebrun had been secured measure was not introduced until day before yesterday and did not get out of committee before adjournment.

I fear that soft words and assurances, assertions made, lip service or bluff [omission] and would like instructions from Department that failure to ratify is regarded by the United States as additional strain on friendly relations and may give cause for further press antagonisms.

I strongly recommend that the retaliatory tax legislation now pending before Congress be enacted into law. I believe that this threat of retaliation did more to stir the French in their recent attempt at ratification of the convention than anything else. It is suggested however that the executive discretionary power to tax be not exercised for the present.

Tardieu indicated that this appreciably may be used in hastening debt settlements. From other quarters it has been suggested that it might be used for bargaining for a new commercial treaty. I concur in the Embassy’s recommendation in its despatch number 295 of October 10, 193313 that we must insist on the ratification of this convention before a new commercial agreement is made and that if necessary such a strong leverage as the prevention of exports of French wines into the United States should be used to bring about the ratification of the double taxation convention.

In the meantime new assessments under the “quotité imposable” against American concerns are continuing, two large ones having been made in the last few weeks and branches or subsidiaries here are in a constant state of uncertainty.

  1. Telegram No. 138 and despatch No. 678 not printed.
  2. Edouard Herriot, French Minister of State.
  3. André Tardieu, French Minister without Portfolio.
  4. Louis Germain-Martin, French Minister of Finance.
  5. Not printed.