Taxation:   U.S. Imperial Airways
NO* 255.
1' *s*-
Sir,
BRITISH MB ASSY,
WASHINGTON, D.C.,
o   Ao.    June 87th, 1939*
I have the honour to acknowledge with
thanks the receipt of your note (611*41846/52) of
the 14th June, regarding tee exemption from United
States customs duty of supplies and equipment with-
drawn from bonded warehouses in the United states
for the use of aircraft registered in the united
Kingdom, and X as glad to note that the Collectors
of Customs are being instructed to accord to aircraft
registered in the United Kingdom the privileges
granted by sections 309 (a) and 817 of the Tariff Act
of 1930, as amended*
I further note that the Collectors of
Customs are also being advised that the United Kingdom
allows privileges to aircraft registered in the
United states which are substantially reciprocal to
those specified in the Internal Revenue Code* section
3451, in respect of aircraft registered in a foreign
country and actually engaged in foreign trade* This
section of the Internal Revenue Code provides that the
privileges granted under it "in respect of civil
aircraft employed la foreign trade or trade between
the United States and any of its possessions* in
respect of aircraft registered in a foreign country,
shall be allowed only if the Secretary of the Treasury
has/
FR'HM :ACEM:NT
The Honourable
Cordell Hull,
Secretary of State of the United States*.
Washington, D. 0.

all been advised by the Seeretary of Commerce that
he has found that such foreign country allows* or
will allow* substantially reciprocal privileges la
respect of aircraft registered Is the Halted States."
I presume therefore that Messrs. Imperial Airways
will be entitled to enjoy all the benefits of section
3451 of the Internal Revenue Code including
exemption from the Federal taxes on gasoline and oil*
I should, however* be grateful to learn whether my
understanding is correct*
In this connexion I may mention that* as
the United States Government is no doubt aware* Pan*
American Airways enjoy full exemption from taxes on
fuel and oil in Bermuda (as well as from taxes on
aircraft spares and equipment) and have had the
benefit of customs exemptions when refuelling at Hythe,
England* net only in connexion with the trans-Atlantic
experimental flights but also with respect to the
recent flights of the "Yankee Clipper".
X have the honour to be*
with the highest consideration*
Sir,
Tow most obedient*
humble servant*
(SOD) B.C. LINDSAY