of Yen 200,000 and an annual payment of Yen 25,000, regardless of the
output of the mines. The company is of opinion that the deletion of
the clause in question carries permanent immunity from inspection
by tax officials.
  An examination of the record seems to indicate that the original con-
cession and its subsequent modifications were drawn up without refer-
ence to the possible imposition of an individual income tax. There is
no evidence of an intention on the part of the Government General
of Chosen to levy taxes on the company. It is obvious, however, that
the authorities in Chosen insist upon the right to inspect the company's
books in order to verify the amounts paid to employees who are subject
to income tax under the law.
  In view of the stringent provisions of income tax legislation in the
United States, I feel that the Embassy would not be justified in sup-
porting the company's position in this matter without the Depart-
ment's express approval. I am accordingly instructing Mr. Langdon 25
to withhold his proposed reply to the Government General pending a
review of the case in the Department.
  Respectfully yours,                          EDWIN L. NEVILLE

                           [Enclosure]
Proposed Reply by the Amrerican Consul at Seoul (Langdon) to the
  Chief of the Foreign Affairs Section, Japanese Government General
  of Chosen (Tanaka)

                                                  SEOUL, CHOSEN.
  SIR: I have the honor to refer to your letter of September 18, 1934,26
in regard to the application of the Chosen Income Tax Law to the
Oriental Consolidated Mining Company and its employees.
  The Consulate General does not dispute the Government General's
view that the incomes of individual employees of the Company are
taxable under the Chosen Income Tax Law, inasmuch as there is no
provision in the Company's charter upon which its employees might
properly claim exemption from such tax. With regard to the inspec-
tion of the Company's books, however, as Article 17 of the original
charter, containing the distinct sentence "Said officer (viz., the repre-
sentative of the sovereign) may inspect the books of the Company",
was canceled without any reservation whatever, the Consulate General
cannot admit that there still resided in the sovereign the right to in-
spect the books for particular purposes. Such an interpretation would
render the Company's special right in this respect valueless, as the

2 William R. Langdon, Consul at Seoul.
" Not printed.



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JAPAN