811.512394 Shipping/65

The Department of State to the Japanese Embassy

Memorandum

Reference is made to a memorandum dated September 19, 1936, from the Japanese Embassy in which the understanding of the Japanese Embassy is expressed that at the time of a satisfactory settlement of the question of the additional war profits taxes asserted by the Treasury Department against three Japanese steamship companies, certain bonds deposited by the Toyo Kisen Kaisha with the American Government will be returned and certain monies paid by the Osaka Shosen Kaisha to the American Government in excess of the assessment for the year 1920 will be refunded.

A copy of the memorandum under reference was transmitted to the Treasury Department, and there has been received from the Treasury Department a reply under date October 14, 1936, pertinent portions of which are quoted hereunder as follows:

“…14 it is agreeable to this Department that it be understood that at the time of a satisfactory settlement of the issues in the cases before [Page 963] the Board of Tax Appeals by the payment of $650,000, the United States Treasury bonds amounting to $120,000 which were deposited by the Toyo Kisen Kaisha with the Anglo California National Bank of San Francisco under escrow agreement dated May 18, 1934 be returned to that company, together with the invested increments thereon, interest, etc., as more particularly provided in the contract. It is also the understanding of this Department that the proposed settlement and payment will completely and finally dispose of all issues relating to the income and profits tax liabilities of all three companies for the years 1918 and 1919, and also for the year 1920 in the case of Nippon Yusen Kaisha. It will not include any settlement of the tax liability of Osaka Shosen Kaisha for the year 1920. It follows, therefore, as suggested in the memorandum of the Japanese Embassy that it will not in any way affect the right of the Osaka Shosen Kaisha to any refund of excess payments made for the year 1920, since the proposed settlement involves only the years 1918 and 1919 in respect of that company. Action on the pending proposed certificate of overassessment in the amount of $65,756.60 has been held up to await the outcome of the case involving the years 1918 and 1919, but it will be given prompt attention with a view to disposing of it at the same time the other years are settled.”

  1. Omission indicated in the original.