and Great Britain has not been accorded the exemption, for the reason that exports of American coal to those countries do not exceed the imports of coal from them. With a view to obtaining the exemption of German and British coal under the treaties, importers have taken the case to the Customs Court where it is now pending. Both the German and the British Governments have heretofore protested against the collection of the duty as a violation of their treaty rights. This Department considers their protests to be well founded. A note dated April 10 from the German Embassy again raises the question and intimates that if a satisfactory adjustment of this matter is not soon forthcoming the German Government will consider itself free likewise to disregard the provisions of the treaty. By virtue of the treaty of 1923 American commerce is assured the benefit of reductions made by Germany on numerous products under commercial treaties with other countries. If these guaranties should be withdrawn, American trade might be subject to discrimination on a most extended scale. In view of the importance of the German market and the pressing need in these times to maintain all existing market outlets for American products, the possible withdrawal of these benefits is a matter of serious concern. The Department of Justice and the Treasury Department represent the interests of this Government in the case brought against it by the importers. It is recommended that the Attorney General and the Secretary of the Treasury be requested to take such steps as may be feasible to expedite an adjustment of this matter in a manner consistent with the treaty rights of Germany and Great Britain. I am informed that if the decision of the Customs Court should be favorable to the importers and the collectors of customs were notified that the Government will not appeal, German and British coal might at once be exempt from the tax. It is recommended that the heads of the two departments mentioned be requested to take this action if the decision of the Customs Court is favorable to the importers; or, whatever the decision of the Customs Court may be, to take such action as their familiarity with the circumstances and the legal procedure involved may indicate to be best suited to effecting an early termination of the treaty violations by the United States.78 Faithfully yours, CORDELL HULL 78 In a memorandum of May 17, 1933, the President considered the position taken up by the Secretary of State in this matter as "wholly justified" and said that he had referred the letter to the Attorney General "with the request that he also take it up with the Secretary of the Treasury." (611.623 Coal/50) 611.623 Coal/59 The Acting Secretary of State to the Attorney General (Cummings) WASHINGTON, June 9, 1933. MY DEAR MR. ATTORNEY GENERAL: I am informed that the United States Customs Court has rendered a decision in the suits of George E. Warren Corporation and Domestic Fuel Corporation v. the United States,79 holding that coal imported from Great Britain or Germany is not subject to the tax of ten cents per one hundred pounds imposed by the Revenue Act of 1932. This litigation has been the subject of several exchanges of correspondence between the Department of State and your Department. I refer particularly to Mr. Hull's letter to you of May 29, 1933.80 In the letter mentioned, the suggestion was made that, should the United States Customs Court decide in favor of the importers, the best solution of the matter would be to refrain from taking an appeal and to notify collectors of customs accordingly. In view of the bearing of this litigation on the foreign relations of the United States, I venture to suggest anew that the decision of the United States Customs Court be accepted by the Government and that an appeal be not taken. I shall be glad to be apprized of the decision of your Department in the premises. Very truly yours, 811.623 Coal/68 WILLIAM PHILLIPS The Assistant Secretary of State (Carr) to the Legal Adviser (Hackworth) [WASHINGTON,] August 24, 1933 MR. HACKWORTH: The German Ambassador called upon me to say that he was instructed by his Government to bring the following to the attention of the Department. There had been some discussion with the Department by the Embassy on the subject of the taxability of coal imports. The Customs Court in July [June] rendered a decision which was satisfactory to the German Government and the Department is alleged to have written a note to the German Government to the effect that there would be no appeal fron that decision. The Ambassador understood that the matter was settled. but upon his return finds that the Treasury Department has now appealed the case to the higher court. The Ambassador considers this an extraordinary course, in view of the very definite statement which he claims to 79 Decision No. 46455, June 3, 1933; for text, see Treasury Decisions, vol. 63, fp 1033-1055. 80 Not printed. have received from the Department that such an appeal would not be taken. He stated with great emphasis that he was instructed to ask that the appeal be withdrawn. I told him that I was not familiar with the case, but I would have the matter examined and see what, if anything, could be done about it. W[ILBUR] J. C[ARR] 611.623 Coal/71 The Chief of the Division of Western European Affairs (Moffat) to the Secretary of State [WASHINGTON,] September 8, 1933. MR. SECRETARY: I reminded Dr. Leitner, during a call this afternoon that on August 30 [247] the German Ambassador had spoken to Mr. Carr about the appeal being entered by the Department of Justice against the decision of the Customs Court in the coal case. Mr. Carr had locked into the matter and before starting on leave two days ago had asked me to give Dr. Leitner a message to the following effect: We feel there must be some mistake in the assertion of the Ambassador that we had sent him a note saying that there would be no appeal from the decision. It is true that we expressed to the Departments of Justice and Treasury the hope that there would be no appeal from the court's decision but we gave no assurance to that effect and of course could not have done so for the reason that the decision in the matter did not rest with the Department of State. The Department of Justice, which was the competent office, had decided, after examining both sides of the question, that an appeal should be taken. Dr. Leitner said that this was a very serious bit of news and that he must tell me in all frankness that it would be viewed in the same light in Berlin. He said that without wishing to raise two unrelated subjects, we were complaining about a certain set of derelictions on the part of the German Government but were at the same time violating our treaties in a way which he had difficulty in understanding. He said that the coal case was to him a case of violation of treaty without mitigating circumstances, and that pending a final solution of the matter by the court it was in effect holding up all trade in coal. Similarly, we were delaying beyond measure a decision on the dumping of German steel; we were scarcely observing the terms of the treaty in the case of the taxation of motor boats; 81 the Normano case he urged as another instance,82 as well 81 For previous correspondence on this subject, see Foreign Relations, 1928, vol. I, pp. 936 ff. 82 This case refers to the extradition from the United States to Germany of Isaak Lewin, alias J. F. Normano, on charges of forgery and fraud. (211.62 Lewin, Isaak) as our attitude on the general subject of the mixed claims.83 The aggregate of so many instances he felt could only be viewed with extreme seriousness by his Government. At the end he asked me to bear in mind that he was not listing these as a démarche from his Government, but calling them to my attention personally to show the difficulties with which they were faced in their relations with this Government. PIERREPONT MOFFAT [The United States Court of Customs and Patent Appeals rendered a decision on April 2, 1934, published as T. D. 47276, upholding the opinion of the lower court. As no further appeal was filed within the statutory time limit, the judgment of April 2, 1934, became final. (611.623 Coal/96)] REPRESENTATIONS BY THE GERMAN EMBASSY AGAINST THE BEVERAGE CONTROL LAW OF THE STATE OF NEW YORK AS BEING IN VIOLATION OF TREATY RIGHTS 711.622/160 N. Y. 471 The German Embassy to the Department of State [Translation] The German Embassy has the honor to inform the Department of State of the following, with a request for examination and further action: The State of New York has adopted a law, "Alcoholic Beverage Control Law" 84 (An Act relating to the manufacture, sale, control, distribution and regulation of certain alcoholic beverages, constituting chapter 3-b of the consolidated laws). Paragraph 84 of the law conflicts, according to the view of the Embassy, with the German-American Commercial Treaty.85 For according to Paragraph 84 the granting of licenses for the beer business to non-citizens of the United States or to companies which are not under the control of American citizens is prohibited. Paragraph 84 reads: "Persons Forbidden To Traffic in Beer. No person hereafter described in this section shall receive a license to traffic in beer. (1) A person who has been convicted of a felony. 83 See pp. 492 ff. 84 Printed in Laws of the State of New York, 1933, ch. 180, p. 595. 85 Signed at Washington, December 8, 1923, Foreign Relations, 1923, vol. 1, p. 2. (2) A person under the age of twenty-one. (3) A person who is not a citizen of the United States. (4) A copartnership, unless one or more of the members of such copartnership owning at least one-half interest in the business thereof shall be a citizen of the United States. (5) A person who shall have had his license issued under this chapter revoked for cause, or who has been convicted of a violation of this chapter until the expiration of two years from the date of such revocation or conviction. (6) A corporation or copartnership, if an officer or member thereof has been convicted of a violation of this chapter or has had a license issued under this chapter revoked for cause, until two years from the date of such conviction or revocation". According to the above wording, the act would contravene, in particular, Article I of the German-American Commercial Treaty, in which it is stated: "The nationals of each of the High Contracting Parties shall be permitted to enter, travel and reside in the territories of the other; to exercise liberty of conscience and freedom of worship; to engage in professional, scientific, religious, philanthropic, manufacturing and commercial work of every kind without interference; to carry on every form of commercial activity which is not forbidden by the local law; to own, erect or lease and occupy appropriate buildings and to lease lands for residential, scientific, religious, philanthropic, manufacturing, commercial and mortuary purposes; to employ agents of their choice, and generally to do anything incidential to or necessary for the enjoyment of any of the foregoing privileges upon the same terms as nationals of the state of residence or as nationals of the nation hereafter to be most favored by it, submitting themselves to all local laws and regulations duly established. The nationals of either High Contracting Party within the territories of the other shall not be subjected to the payment of any internal charges or taxes other or higher than those that are exacted of and paid by its nationals. The nationals of each High Contracting Party shall enjoy freedom of access to the courts of justice of the other on conforming to the local laws, as well for the prosecution as for the defense of their rights, and in all degrees of jurisdiction established by law. The nationals of each High Contracting Party shall receive within the territories of the other, upon submitting to conditions imposed upon its nationals, the most constant protection and security for their persons and property, and shall enjoy in this respect that degree of protection that is required by international law. Their property shall not be taken without due process of law and without payment of just compensation. (Nothing herein contained shall be construed to affect existing statutes of either country in relation to the immigration of aliens or the right of either country to enact such statutes.86)" 86 Senate reservation contained in resolution of February 10, 1925, giving advice and consent to ratification of the treaty. |