Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

77. Telegram From the Department of State to the Embassy in the United Kingdom⁰

Washington, July 20, 1963, 8:20 p.m.

517. In view apparent misunderstanding abroad, Treasury issued supplemental press release July 20, as follows: “July 19 remains effective date of interest equalization tax, recommended by President Kennedy, on purchases of all foreign securities outside U.S., Treasury said today.

Following President’s message on July 18, Treasury announced delay to August 16 as date from which purchases of outstanding foreign securities would be subject to rules of proposed tax, if those purchases were effected on U.S. national securities exchanges registered with Securities Exchange Commission.¹

Delay does not apply to transactions carried out on foreign securities exchanges nor to transactions in U.S. or elsewhere which are not carried out through U.S. registered securities exchanges. Recommended effective date of proposed tax on such transactions, and for taxable newly issued foreign securities purchased by American investors, remains July 19.

Treasury and representatives of exchanges are currently developing detailed procedures involved in applying rules of proposed tax to transactions on these U.S. exchanges.”

Request Emb cooperation in dissemination this info.

Rusk

0. Source: Department of State, Central Files,FN 16 US. Unclassified. Drafted by F. L. Widman (Treasury), cleared by Creel and Mortimer D. Goldstein (E/OFE), and approved for transmission by Vincent J. Monti (OC/OCT). Also sent to Paris (Embassy and USRO), Bonn, Rome, The Hague, Brussels (Embassy and BUSEC), Ottawa, and Tokyo. Attached to the source text is the typewritten text of the press release issued by the Department of the Treasury.
1. Reference is to the Department of the Treasury’s announcement at 6:15 p.m. on July 18 that “purchasers of foreign securities traded on a national securities exchange registered with the Securities and Exchange Commission would not be subject to the Interest Equalization Tax proposed by the President in his Message to the Congress today on purchases made on such exchanges prior to and including August 16, 1963.” (Quoted in Department of State Bulletin, August 12, 1963, p. 256n)