Modified Faddeev-type three-nucleon equations that also include the Coulomb potential between the two protons are solved in momentum space. With a separable representation of the Paris potential for the N-N 'So, the coupled 3 S\ -3 D\, and the P states, we have calculated for the first time p-d polarization observables. Our p-d results at E p =2.5 MeV are compatible with the measured p-d data and demonstrate that a proper treatment of the p-d Coulomb corrections is required.The nucleon-nucleon (N-N) system represents the prime source of information on the interaction between nucleons at energies relevant for nonrelativistic potential theory. However, some aspects of the interaction, such as the spin-(and to some extent also the isospin-) dependent part, are not easily accessible through TV-TV scattering, and the off-shell component of the interaction can practically not be obtained from a pure two-body system. In the system with three nucleons the interaction between two nucleons is distorted by the presence of the third nucleon, and consequently the off-shell component of the TV-TV interaction can be studied. In addition, spin-polarization effects in three-nucleon scattering are bigger than in N-N scattering by at least an order of magnitude and lend themselves even, at rather small laboratory energy, to better information on the spin dependence of the TV-TV interaction. Also, since an exact theory describing three nucleons interacting via strong two-body forces is available by the Faddeev equations, the situation seems to be quite favorable for improving our knowledge of the TV-TV interaction by means of the three-nucleon system.Unfortunately the Coulomb force has spoiled real progress so far because it has an inverse impact on theory and experiment. For experiments, namely, spin-polarizaton experiments, mostly the reaction with electrically charged particles, i.e., proton-deuteron (p-d) scattering, has been studied, 1 whereas for the neutralreaction counterpart, i.e., neutron-deuteron (n-d) scattering, data are sparse and are restricted to differential cross sections and neutron analyzing powers in elastic reactions. 2 What is advantageous for the experiment turns out to be a major problem for the theory, because originally the Faddeev equations were derived only for twobody potentials of sufficiently short range. To accomodate the infinite range of the Coulomb potential in the Faddeev equations is by no means trivial, and this has been the reason why data from p-d experiments have usually been analyzed on the basis of n-d calculations supplemented by approximate Coulomb corrections. The standard approximation 3 originates from the two-body Coulomb scattering between the proton and the electric charge of the deuteron located at its center of mass (cm. scattering), whereas another approximation 4 tried, in addition, to describe in a two-body manner the distortion that the strong interaction experiences in the presence of the Coulomb force. The fact that p-d polarization measurements have been essentially compar...