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res), and other schedular taxes (impôts cédulaires) appropriate to the type of income specified in said articles;

“(2) The provisions of this agreement shall not be construed to affect in any manner any exemption, deduction, credit or other allowance accorded by the laws of one of the contracting States in the determination of the tax imposed by such State.

“(3) As used in this agreement:

“(a) The term “permanent establishment" includes branches, mines and oil wells, factories, workshops, warehouses, offices, agencies, and other fixed places of business, but does not include a subsidiary corporation.

“When an enterprise of one of the States carries on business in the other State through an agent established there who is authorized to contract for its account, it is considered as having a permanent establishment in the latter State.

"But the fact that an enterprise of one of the contracting States has business dealings in the other State through a bona fide commission agent or broker shall not be held to mean that such enterprise has a permanent establishment in the latter State.

"(b) The term "enterprise” includes every form of undertaking whether carried on by an individual, partnership (société en nom collectif), corporation (société anonyme), or any other entity.

"(c) The term "enterprise of one of the contracting States" means, as the case may be, "American enterprise” or “French enterprise.”

"(d) The term “American enterprise” means an enterprise carried on in the United States by a citizen of the United States or by an American corporation or other entity; the term "American corporation or other entity” means a partnership, corporation or other entity created or organized in the United States or under the law of the United States or of any State or Territory of the United States.

“(e) The term "French enterprise" is defined in the same manner, mutatis mutandis, as the term “American enterprise."

“(f) The American corporations mentioned in Articles V and VI are those which, owing to their form of organization, are subject to article 3 of the decree of December 6, 1872. The present agreement does not modify the regime of “abonnement" for securities.

"(g) The term “United States," when used in a geographical sense, includes only the States and the Territories of Alaska and Hawaii, and the District of Columbia.

"(h) The term “France," when used in a geographic sense, indicates the country of France, exclusive of Algeria and the Colonies. “Done in duplicate at Paris, the 27th of April, 1932.

"WALTER E. EDGE

"ANDRE TARDIEU." And whereas, the said convention and protocol have been ratified on both parts, and the ratifications of the two Governments were exchanged at Paris on the 9th day of April, 1935;

And whereas, it is stipulated in Article X of the said convention that the convention shall become effective on the 1st day of January following the exchange of ratifications, that is to say on the 1st day of January, 1936;

Now, therefore, be it known that I, FRANKLIN D. ROOSEVELT, President of the United States of America, have caused the said convention and the said protocol to be made public, to the end that the same and every article and clause thereof may be observed and fulfiled with good faith by the United States of America and the citizens thereof on and from the 1st day of January, 1936.

In testimony whereof, I have hereunto set my band and caused the Seal of the United States of America to be afixed. Done at the city of Washington this 16th day of April in the year of our

Lord one thousand nine hundred and thirty-five, and of the Independ[SEAL] ence of the United States of America the one hundred and fifty-ninth.

FRANKLIN D ROOSEVELT By the President: CORDELL HULL

Secretary of State.

EXEMPTION FROM INTERNAL REVENUE TAXES

The following list of provisions (digested) is not all inclusive, and various provisions of a more or less restricted or "local” importance have been omitted.

(A) UNITED STATES GOVERNMENT OBLIGATIONS

(Digested from Form 800-A, Revised, November 1, 1935, issued by the Commissioner of Public Debt, the 1936 edition of Treasury Annual Reports, Finance (Document No. 3079, pages 400 and 409), and Statement of the Public Debt of the United States, Form 774,

July 31, 1937.) With the exception of three small loans, which are exempt from the payment of all taxes and duties of the United States, except estate, inheritance, or gift taxes, all interest-bearing obligations of the United States now outstanding have been issued under the Second Liberty Bond Act, approved September 24, 1917, as amended, and the same Act is the present authority for the Secretary of the Treasury to borrow money through the sale of additional amounts of interestbearing obligations of the United States.

CLASSES OF SECURITIES The following classes of securities are authorized by the Second Liberty Bond Act.

(a) Bonds of the United States, those termed Treasury bonds, bearing interest. Treasury bonds are issued with maturities more than 5 years from the date of issue, in two forms: (1) coupon (or bearer) bonds, payable to bearer, with coupons attached for the payment of interest when due; and (2) registered bonds, payable to an inscribed owner, and with interest paid through checks drawn to the order of the inscribed owner. Both forms are issued in the denominations of $50, $100, $500, $1,000, $5,000, $10,000 and $100,000 (except that the $50 denomination is not available for some of the earlier issues of Treasury bonds). Coupon and registered bonds are interchangeable for like amounts of the same issue.

(b) United States Savings bonds, are issued on a discount basis. They may be issued with maturities not less than 10 nor more than 20 years from the issue date, and at prices to yield an investment return of not over 3 percent compounded semiannually. They are redeemable at the option of holders before maturity at increasing redemption values. These bonds are issued only in registered form and in the denominations of $25, $50, $100, $500 and $1,000 (maturity value). They are not transferable.

Notes of the United States, bearing interest, with maturities not less than one nor more than five years from date of issue. These notes are termed Treasury notes, and they are issued only in coupon form payable to bearer, with coupons attached for the payment of interest when due, in denominations of $100, $500, $1,000, $5,000, $10,000, $100,000 (but the $50 denomination may be provided for some series.)

Certificates of Indebtedness, commonly termed Treasury certificates of in. debtedness, bearing interest, with maturities not exceeding one year from date of issue. These certificates are issued only in coupon form payable to bearer, with coupons attached for the payment of interest when due, in denominations of $500, $1,000, $5,000, $10,000 and $100,000 (but the $100 denomination may be provided for some series).

Treasury Bills, with maturities not exceeding one year from date of issue. These bills are issued on a discount basis, and in denominations of $1,000, $10,000, $100,000, $500,000 and $1,000,000 (maturity value), payable to bearer.

TAX EXEMPTION

The provisions of the Second Liberty Bond Act; as amended, now in effect provide for tax exemptions of the public debt securities issued and outstanding, or issuable under that Act.

Treasury Bonds and United States Savings Bond8.-All such bonds are exempt, both as to principal and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate, inheritance, or gift taxes and (b) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations. The interest on an amount of such bonds the principal of which does not exceed in the aggregate $5,000 owned by any individual, partnership, association, or corporation, is exempt from the taxes provided for in subdivision (b) mentioned above. For the purpose of determining taxes and tax-exemptions on United States Savings bonds, the increment in value represented by the difference between the price paid and the price received (whether at or before maturity) is considered as interest.

Treasury Notes.The notes may be issued in any one or more of the following series as the Secretary of the Treasury may prescribe in connection with the issue thereof:

(1) Exempt, both as to principal and interest, from all taxation (except estate, inheritance, or gift taxes) now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority;

(2) Exempt, both as to principal and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate, inheritance, or gift taxes and (b) graduated additional income taxes, commonly known as surtaxes, and excess-profits and war-profits taxes, now or hereafter imposed by the United States, upon the income or profits of individuals, partnerships, associations, or corporations;

(3) Exempt, both as to principal and interest, as provided in paragraph (2); and with an additional exemption from the taxes referred to in clause (b) of such paragraph, of the interest on an amount of such notes the principal of which does not exceed $30,000, owned by any individual, partnership, association, or corporation; or

(4) Exempt, both as to principal and interest, from all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority, except (a) estate, inheritance, or gift taxes, and (b) all income, excess-profits, and war-profits taxes, now or hereafter imposed by the United States, upon the income or prof. its of individuals, partnerships, associations or corporations.

(NOTE.—Provision (1) applies to Treasury notes outstanding October 31, 1935. For any notes thereafter issued, the terms should be examined for tax exemptions.) Treasury Certificates of Indebtedne88.-All certificates of indebtedness are exempt, both as to principal and interest, from all taxation (except estate, inheritance, or gift taxes) now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority.

Treasury Bills.-All Treasury bills are exempt, both as to principal and interest, from all taxation (except estate, inheritance, or gift taxes) now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority; and the amount of discount at which Treasury bills are originally sold by the United States is considered to be interest within the meaning of this provision.

Any gain from the sale or other disposition of Treasury bills is exempt from all taxation (except estate, Inheritance, or gift taxes) now or hereafter imposed by the United States, any State, or any of the possessions of the United States, or by any local taxing authority; and no loss from the sale or other disposition of such Treasury bills is allowable as a deduction, or otherwise recognized, for the purposes of any tax now or hereafter imposed by the United States or any of its possessions.

IN BANDS OF FORMIGN HOLDERS

Bonds, notes and certificates of indebtedness of the United States, shall, while beneficially owned by a nonresident alien individual, or a foreign corporation, partnership, or association, not engaged in business in the United States, be exempt both as to principal and interest from any and all taxation now or hereafter imposed by the United States, any State, or any of the possessions of the United States or by any local taxing authority. (Sec. 3 of the Fourth Liberty Bond Act, approved July 9, 1918, as amended by Sec. 4 of the Victory Liberty Loan Act, approved March 3, 1919.) (U. S. C., Title 31, § 750.)

(B) INSTRUMENTALITIES OF THE UNITED STATES AND

THEIR OBLIGATIONS

BANKS FOR COOPERATIVES

See Production Credit Corporations.

CENTRAL BANK FOR COOPERATTVES

See Production Credit Corporations.

COMMODITY CREDIT CORPORATION

Bonds, notes, debentures, and other similar obligations issued by the Commodity Credit Corporation under the provisions of this Act shall be deemed and held to be instrumentalities of the Government of the United States, and as such they and the income derived therefrom shall be exempt from Federal,

taxation (except surtaxes, estate, inheritance, and gift taxes). The Commodity Credit Corporation, including its franchise, its capital, reserves, and surplus, and its income shall be exempt from all taxation now or hereafter imposed by the United States,

(Mar. 8, 1938, c. 44, sec. 5, 52 Stat. 108).

*

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FARMERS' HOME CORPORATION

The corporation, including its franchises, its capital, reserves, and surplus and its income and property shall,

be exempt from all taxation now or hereafter imposed by the United States

(July 22, 1937, c. 517, $ 40 (i), 50 Stat. 528.) (U. S. C., Title 7, 8 1014 (i).)

FEDERAL DEPOSIT INSURANCE CORPORATION

来 *

All notes, debentures, bonds, or other such obligations issued by the Corporation shall be exempt, both as to principal and interest, from all taxation (except estate and inheritance taxes) now or hereafter imposed by the United States

The Corporation, including its franchise, its capital, reserves, surplus, and its income, shall be exempt from all taxation now or hereafter imposed by the United States,

(Dec. 23, 1913, c. 6, § 12 B (p), added June 16, 1933, § 8, 48 Stat. 177.) (U. S. C., Title 12, § 264 (p).)

New banks organized by the Federal Deposit Insurance Corporation, notwithstanding any other provision of law, are exempt from all taxation now or hereafter imposed by the United States

on their franchises, property and income. (Dec. 23, 1913, c. 6, § 12 B (1) (9) added Aug. 23, 1935, c. 614, § 101, 49 Stat 696.) (U. S. C., Title 12, § 264 (1) (9).)

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FEDERAL FARM MORTGAGE CORPORATION

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The corporation, including its franchise, its capital, reserves, and surplus, and its income shall be exempt from all taxation now or hereafter imposed by the United States;

Mortgages executed to the Land Bank Commissioner and mortgages held by the Corporation, and the credit instruments secured thereby, and bonds issued by the Corporation under the provisions of this Act, shall be deemed and held to be instrumentalities of the Government of the United States, and as such they and the income derived therefrom shall be exempt from Federal taxation (except surtaxes, estate, inheritance, and gift taxes). (Jan. 31, 1934, c. 7, 8 12 (a), 48 Stat. 347 amended Feb. 26, 1934, c. 33, 48 Stat. 360.) (U. S. C., Title 12, s 10201.)

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FEDERAL HOUSING ADMINISTRATION

See Mutual Mortgage Insurance Fund.

FEDERAL HOME LOAN BANKS

Any and all notes, debentures, bonds, and other such obligations issued by any bank, and any consolidated Federal Home Loan Bank bonds and debentures, shall be exempt both as to principal and interest from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States,

The bank, including its franchise, its capital, reserves, and surplus, its advances, and its income shall be exempt from all taxation now or hereafter imposed by the United States, (July 22, 1932, c. 522, § 13, 47 Stat. 735, amended by May 28, 1935, c. 150, 8 8, 49 Stat. 295.) (U. S. C., Title 12, 8 1433.)

*

FEDERAL INTERMEDIATE CREDIT BANKS

Same as Federal Land Banks. (Mar. 4, 1923, c. 252, § 2, 42 Stat. 1459.) (U. S. C., Title 12, § 1111.)

FEDERAL LAND BANKS

Every Federal Land Bank and every national farm loan association, including the capital and reserves or surplus therein and the income derived therefrom, shall be exempt from Federal

taxation, * *. First mortgages executed to Federal land banks, or to joint stock land banks, and farm loan bonds issued under this Act shall be deemed and held to be instrumentalities of the Government of the United States, and as such they and the income derived therefrom shall be exempt from Federal

taxation. (July 17, 1916, c. 245, § 26, 39 Stat. 380.) (U. S. C., Title 12, $ 931.)

Notwithstanding the provisions of section 26 of the Federal Farm Loan Act, as amended, in the case of mortgages made or obligations issued by any jointstock land bank after the date of the enactment of this Act, all income, except interest, derived therefrom shall be included in gross income and shall not be exempt from Federal income taxation. (May 28, 1938, c. 289, sec. 817, 52 Stat. 578.) (U. S. C., Title 12, sec. 931 (a).)

FEDERAL RESERVE BANKA

Federal reserve banks, including the capital stock and surplus therein and the income derived therefrom, shall be exempt from Federal

taxation. (Dec. 23, 1913, c. 6, 87, 38 Stat. 258; March 3, 1919, c. 101, § 1, 40 Stat. 1314.) (U. S. C., Title 12, § 531.)

FEDERAL SAVINGS AND LOAN ASSOCIATIONS

Such associations, including their franchises, capital, reserves and surplus, and their loans and income, shall be exempt from all taxation now or here. after imposed by the United States, and all shares of such associations shall be exempt both as to their value and the income therefrom from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States;

(June 13, 1933, c. 64, 85 (h), 48 Stat. 133.) (U. S. C., Title 12, § 1464 (h).)

FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION

All notes, bonds, debentures, or other obligations issued by the Corporation shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States,

The Corporation, including its franchise, capital, reserves, surplus, and income, shall be exempt from all taxation now or here after imposed by the United States, *

(June 27, 1934, c. 847, 8 402 (e), 48 Stat. 1257.) (U. S. O., Title 12, 8 1725 (e).)

HOME OWNERS LOAN CORPORATION

The bonds issued by the Corporation under section 4 (c) of the Home Owners Loan Act of 1933, amended, are exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States

The Corporation, including its franchise, its capital, reserves and surplus, shall likewise be exempt from such taxation;

(June 13, 1933, § 4 (c), 48 Stat. 129 as amended by April 27, 1934, c. 168, § 1, 48 Stat. 644.) (U. S. C., Title 12, § 1463 (c).)

JOINT STOOK LAND BANKS

See Federal Land Banks.

MUTUAL MORTGAGE INSURANCE FUND

Such debentures as are issued in exchange for property covered by mortgages insured under section 203 or section 207 prior to the date of enactment of the National Housing Act Amendments of 1938 shall be subject only to such Federal,

taxes as the mortgages in exchange for which they are issued would be subject to in the hands of the holder of the debentures Such debentures as are issued in exchange for property covered by mortgages insured after the date of enactment of the National Housing Act Amendments of 1938 shall be exempt, both as principal and rest, from all ation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States

(National Housing Act 8 204 (a), as amended by Feb. 3, 1938, c. 13, § 3, 52 Stat. 14.)

NATIONAL FARM LOAN ASSOCIATIONS

See Federal Land Banks.

NATIONAL MOBTGAGE ASSOCIATIONS

All notes, bonds, debentures, or other obligations issued by any national mortgage association shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States,

* Every national mortgage association, including its franchise, capital, reserves, surplus, mortgage loans, income, and stock, shall be exempt from taxation now or hereafter imposed by the United States, * *. (June 27, 1934, c. 847, 8 307, as amended by Feb. 3, 1938, c. 13, § 8, 52 Stat. 24).

PRODUCTION CREDIT ASSOCIATION

See Production Credit Corporations.

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