DEPARTMENT OF STATE
WASHINGTON
August 28, 1939,
Excellency:
I have the honor to refer further to your note no, 255
jl^jl^   of June 27, stating that you presume from the notification
to the collectors of customs mentioned in my note of June
14, that Imperial Airways will be entitled to enjoy all of
the benefits of Section 3451 of the Internal Revenue Code,
including exemption from Federal taxes on gasoline and oil,
and requesting that you be advised whether your understand-
ing of the above matter is correct.
Upon receipt of your note, inquiry was made of the
Treasury Department regarding the above matter.    I am now
in receipt of a letter dated August 17, 1939, from the
Secretary of the Treasury, advising me that
"Since under T.D. 49914 (7), . . . , aircraft
registered in the United Kingdom and actually
engaged in the foreign trade may make withdrawals
in
His Excellency
The Right Honorable
Sir Ronald Lindsay, P.O., G.C.M.G., K.C.B., O.V.O.,
British Ambassador. * r\ .
3
-2-
ln the United States under the statutes above-men-
tioned free of duty and internal revenue tax upon
compliance with the regulations promulgated there-
under, the understanding of the British Ambassador
is correct."
The statutes referred to in the above quotation are
Section 5451 of the Internal Revenue Code and Sections
309(a) and 317 of the Tariff Act of 1939 (U.S.C., Sup. IV,
Title 19,  Sections 1309(a) and 1317).
I have also been advised by the Secretary of the Trea-
sury that in conformity with further advice from the Depart-
ment of Commerce, collectors of customs are being informed
that Bermuda allows privileges to alroraft registered in
the United States and engaged in foreign trade substantially
reciprocal to those specified in the Internal Revenue Code,
Section 3451, and in Sections 309 and 317 of the Tariff Act
of 1930, as amended by Section 5 of the Customs Administra-
tive Act of 1938 (U.S.C., Sup. IV, Title 19, Sec. 1309 and
1317) in respect of aircraft registered in a foreign country
and actually engaged in foreign trade.
Accept,