811.512351 Double/433

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

No. 4145

Sir: I have the honor to refer to the proposed revision of the existing Franco-American Double Taxation Convention of 1932 and to the Department’s telegram No. 158 of March 11, 193982 and to inform the Department that Mr. Eldon P. King, Special Deputy Commissioner of Internal Revenue of the Treasury Department and Mr. Harry R. Turkel, of the Treaty Division of the Department of State, who arrived on the Washington on March 29, 1939, had their initial meeting with the French negotiators in the Ministry of Finance on April 3. They were accompanied on that occasion, as well as at the meetings subsequently held, by officers of the Embassy responsible for the handling of questions relating to double taxation.

M. Jeannequin, of the Sous-Section des Unions, is representing the Foreign Office in the current negotiations. M. Jean Watteau, Director of Direct Taxation in the Ministry of Finance, presided over the French Delegation at the initial conferences and was assisted by representatives of other interested sections in the Ministry of Finance.

Following the customary ceremonial exchanges, the American delegates submitted on April 3 the tentative draft83 of the United States proposals for revision of the existing Convention. Copies in English and in French translation were made available to members of the French Delegation and the draft was then made the object of a close survey and point-by-point analysis.

The French at first expressed surprise that the United States proposals were in the form of a completely new convention, but did not appear fundamentally opposed to the idea of a new vehicle, although they seemingly had anticipated that the revision would take the shape of an addendum to the existing document.

The April 3 conversations were almost entirely exploratory, as were further conversations conducted with the same representatives of the United States Government and substantially the same representatives of the French Government on April 5. Each article of the American draft gave rise to interpretative comment and explanation. The French negotiators evinced a very active interest in provisions for the exchange of fiscal information and left the distinct impression that the principal inducement, to the Finance Ministry, at least, to carry the current negotiations to a successful termination would be the facilities offered for the disclosure of data with respect to holdings of French citizens in the United States. The French have decided to [Page 553] continue the discussions with a reduced number of negotiators on their side. This will undoubtedly make for greater speed in covering the ground.

The American delegates have made tentative plans to return to the United States on the S.S. Washington on April 20, but it seems highly improbable, at this time that sufficient headway will have been made by that date to permit of their departure, unless it is decided to suspend the negotiations temporarily, with a view to resumption later. While the atmosphere of the discussions which have been held thus far has been entirely cordial, officials in the Ministry of Finance are apparently of the opinion, in view of the scope of the proposals and the differences in interpretations which must inevitably arise, that agreement may hardly be anticipated during the current month.

Respectfully yours,

For the Ambassador:
Edwin C. Wilson

Counselor of Embassy
  1. Not printed.
  2. Not found in Department files.