FRENCH PLAN

Hokitika Guardian, 12 May 1930, Page 8

FRENCH PLAN

TAXING AMERICAN FIRMS,

NEW WAYS TO PAY WAR DEBTS

WASHINGTON, May 1

France’s plan to tax certain American corporations (companies) which have French subsidiaries to the tune oi bl per cent on their business profits and dividends is regarded here as a blow to American enterprise.

It is alsa regarded as a very i'ngem ous plan to transfer the burden of ttu French war debt to American corporate subsidiaries in French jurisdiction. It is estimated that France, by the re-application of an old statute relating to an extra-territoral tax on dividends and by a new method of assessments will collect soon approximately £38,000,000 of the profiits of American corporate subsidiaries annually. Some officials in Washington place the total nearer. £40,000,000 than £33,000,000, ’nit the amount is so large in any case that it would be more than sufficient to meet the payments in the early year on the French war debt under the funding agreement. The United States Treasury and State Department have agreed to .send Mr Ellsworth Alvord, assistant to Mr Andrew Mellon, Secretary of the Treasury, to Paris, to talk the French oiit of the idea. But it is admitted that moral suasion is the only means available. If that fails, the tax will have to be borne by American corporate subsidiaries in French jurisidiction, for there is no legal method of stopping if Business men interviewed are frankly pessimistic regarding the situation and its effect upon other foreign countries where America is firmly entrenched through the operations of subsidiaries. One called it the direct result of America’s tariff wall to keep out foreign trade. Another said it was “unexpected and unsportsmanlike.” A third took the view that all was fair in war and trade, and that, i France “liked to pay more for goods tr lienefit the Frenchmanufacturer, no-: body could blame her.” France, said this, authority., never really accepted tiie idea ( that she owed any debt to the Americans, and is turning to what seems an easy way out. The Treasury Department has not be.en informed when the tax will ‘be put intd effect, and, hopes that its apnlication. may !he long enough delayed to permit of the subject being discuss d at the Intel-national Taxation Con- | ference in Geneva next'May.