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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa

Newfoundland,   pp. 201-202 PDF (665.2 KB)

Page 202

811.512343 Double/7
      The Secretary of State to the British Charge (Mallet)
                                     WASHINGTON, October 8, 1937.
  SIR: I refer to the Ambassador's note of August 7, 1937 concerning
the desire of the Governor of Newfoundland that similar benefits be
extended on a reciprocal basis to Newfoundland holders of American
securities to those embodied in the convention between the United
States and Canada of December 30, 1936, concerning income taxation,
and advise you that a communication concerning this matter has been
received from the Treasury Department. In this communication the
Acting Secretary of the Treasury states that the Treasury Department
will be glad to consider any proposals which you may see fit to advance
along the lines suggested in the Ambassador's note. However, the
Acting Secretary of the Treasury suggests that there is now under
consideration another tax convention with Canada supplementary to
that of December 30, 1936.2 The scope and terms of such a supple-
mentary convention have not yet become clearly defined and hence
their effect upon the existing convention cannot at this time be accu-
rately determined. The Acting Secretary concludes that when the
situation in this regard has become clarified the Treasury Department
will be better prepared to give further consideration to a tax conven-
tion with Newfoundland.
  Accept [etc.]                        For the Secretary of State:
                                               R. WALTON MOORE
  [A note dated August 25, 1938, from the Secretary of State to the
British Ambassador quoted a letter from the Treasury Department
stating that the policy of the Department regarding tax conventions
with other countries had become more clearly defined and that it was
not contemplated that such conventions would reduce rates of taxa-
tion unless such reductions were authorized by revenue acts. The
letter of the Treasury Department concluded:
  "For these reasons this Department is at present unable to entertain
favorably suggestions for negotiations looking to adoption of a tax
convention by which is contemplated a reduction in the rates of taxa-
tion imposed under existing law upon income from United States
sources flowing to residents of Newfoundland." (811.512343
Double/15) ]
2 See pp. 177 ff.

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