811.512342 Double/11

Memorandum by Mr. James C. H. Bonbright of the Division of Western European Affairs

Mr. Hume Wrong, Counselor of the Canadian Legation, telephoned Mr. Hickerson10 this morning to say that the Canadian Government was prepared to proceed with the negotiation of a treaty on taxation in accordance with the terms of the Tax Bill passed by Congress last session.11 Mr. Wrong was anxious to proceed with the negotiations at once in order that the treaty can be completed for presentation to the Senate as soon as it convenes.

After discussing the matter with Mr. Otterman, of the Treaty Division, I informed Mr. Wrong that we would like very much to delay negotiations until the return of Mr. de Wolf of “TD”, and Mr. King of the Bureau of Internal Revenue, both of whom will land in New York November 12. I said that Mr. King, in particular, had asked that the negotiations be delayed until his return.

Mr. Wrong said that it would be perfectly alright to wait until November 12 on the assumption that negotiations would begin immediately thereafter. The Canadians have prepared an informal draft which Mr. Wrong will bring to the Department in the near future in order that it may be given preliminary study. He said that if the treaty has to receive the advice and consent of the Senate, which seems probable, it was the intention of the Canadians to press for a more comprehensive treaty than was envisaged in our Tax Bill. He added, in confidence, that if the treaty did not have to be referred to the Senate he thought he could persuade the Canadian Government, for the sake of speed, to confine the treaty to the points set forth in our Tax legislation and take up the additional questions later on when the Tax Bill comes up for amendment.

I said that we would be very glad to have the Canadian draft to look over but that I was not at all sanguine that we would be prepared to consider a treaty beyond the scope of the Tax Bill even if the treaty had to be referred to the Senate.

  1. John D. Hickerson, Assistant Chief of the Division of Western European Affairs.
  2. Revenue Act of 1936, 49 Stat. 1648.