811.512342 Double/55a: Telegram
The Acting Secretary of State to the Ambassador in the United Kingdom (Bingham)
194. From the Secretary of State. I should like to have conveyed in some way to Mr. King24 and Mr. Dunning25 the information that I have notified the Senate Foreign Relations Committee that I no longer have any objection to their favorable consideration of our Tax Convention with Canada, signed on December 30, 1936, and already ratified by Canada. For background purposes, see Department’s press release of that day.26
It is my understanding that the Convention has been reported favorably by a sub-committee of the Foreign Relations Committee, but that no action has yet been taken by the Committee as a whole.
Confidentially, this information was conveyed sometime ago to the Canadian Minister here, but I have just learned that he has not yet transmitted the information to his Government. I also pointed out to him that, under the terms of the Convention, either Government was free at any time to raise the withholding rate above 5%, and that the result of such action would merely be to release the other Government from its obligation. I stressed this point because it is not yet known whether the policy of the Treasury Department will necessitate a higher withholding tax and, if it were found necessary to do this, I did not wish this Government to be charged with bad faith.
[Page 179]Both Mr. King and Mr. Dunning professed great interest in this Convention prior to their departure for London and, at this critical time, I consider it important that they should know that this Department no longer stands in the way of ratification. [Hull.]