El Paso herald. (El Paso, Tex.) 1901-1931, 1919-07-04
TREASURY DEPARTMENT FAVORS
REPEAL Of FOREIGN DEPOSIT TAX
Protests From Border Cities Against Shutting Out
Mexican Money Needed and Effort VIII Be Made to
Secure the Repeal Of Provision of Revenue Act;
Competition Is On For Control Of Money Market.

IITASHINGToN. D C, July 4-Re-
w peal Of that provision OF the
revenue act which imposes q tax on
the interest which American banks
pay nonresident foreigners depositing
money - this country is forecast in
an expression from the treasury de-
partmenr today
Ndrr tlzt the world war is about
over and trade conditions arc tending
toward thar normal status. the COM
petition il trade and banking is be-
coming particularly keen Protests
have been coming into the treasury
department from banks on The Next
can border and from ether ba nks that
handle money for European customers
that American banking institutions
were Handicapped by the tax on in
tercst-
Other countries it was agreed. dis
scented with the tax
Cobb Preparsz Memorandum.
zach Lamar Cobb, form erly col
lector Of customs Al Fl P.aso, Tex, and
heretofore one Of The department OF
states experts on business and politi-
cal relations WITH Mexhso. prepared
an exhaustive memorandum showing
that Canadian banks with branches
in the United States could actually
offer Mexican industrial concerns a
privilege which American banks
could not meet because OF che revente
act
A Mexican concern could carry
its balance with n HorItr Eal bank
and use the New York bz1nch Of
the Canadian institution foe, check
ing purposes and rereiEe interest
without The payment of n TAX
British banks are telling customers
IN Mexico and Central A1neric and
South America that they viii carry
their deposits without deducting q
tax
Roper Adsoczfes Repeal.
Daniel c. Roper commissi oner OF
internal revenue, has written Mr.
Cobb the following letter.
~The question involves an impor-
tant matter Of principle believe
that the federal government should
not impose a tax on such balances
maintained in this country BIZ persons
or corporations who are not other I
wise taxable under our laws To Tax
such foreign balances puts a handicap Z
ON the United States as an interna-
ticnal money market and dis courazes
other countries from doing financial
business here when. as matter OF
fact. we should in every proper way Z
be encouraging them 20 do their
banking with Us The fact that the l
amount Of the handicap thus imposed I
on foreign banking III the United 4
States does not involve very large /
percentage does not change the prin- 1
cipie1
It IS recognized fact that in in
transitional banking that trade tol- 4
lows bank deposits The supremacy i
of England in world trade has been +
due largely 70 the holding by London 1
Of the deposits of the world Bank /
balances everywhere have been cleared l
by checks On London
Competition Is Ga.
During the wa much OF this busi- Z
ness was diverted 10 New York Vow 1
European banks are naturally making I
an effort TO recover some Of it and .
+ the competition is on Action BY con- I
gross in line with commissioner !
Koperss letter IS believed 10 be as
sured and, when taken. wiz enable
New York 10 seek deposits from the i
outside world and carry them without /
handicap
The treasury. department vas 10
some extent Influenced in its decision
By the receipt OF the following OFF,
ciai information:
Canada imposes no tax, income or
Otherwise. upon interest paid 10 for
eizn depositcrs. individual OF eorDor-
alton. By Canadian banks hold such
deposits unless the individual or cor-A
poration is resident N Canada- en-