No. 471.
Mr. Evarts to Mr. Lowell.

No. 93.]

Sir: A telegram dated the 30th ultimo, from the consulate-general of the United States at Havana, states that the director of finance of the island of Cuba, in a communication addressed to the consulate-general under date of the 28th of August, stated that it having been again decided by the Government of Madrid on the 26th of June preceding that American citizens cannot be included in the exemption from payment of arrears of taxes granted to the subjects of the German Empire, the governor-general has, therefore, ordered the collection of such arrears.

It seems unnecessary to go into a detailed review of the circumstances attending the equalization of the citizens of the United States resident in Cuba with those of Germany in the matter of taxation for extraordinary purposes, inasmuch as the files of the legation show amply what was done, and the extent of the concession finally made, whereby American residents, in common with German and others, were to pay an extraordinary tax of 22½ per cent, instead of the 30 per cent. levied upon Spanish subjects on that account. The concession then made was appreciated at its full worth as a step tending in a marked degree to draw closer still the feelings of good will existing between the two countries.

In the judgment of this government, the same considerations which led to the partial remission of the tax in question, apply with even greater force to the remission of the arrears in the same degree as has been conceded to the subjects of other friendly powers. It is not to be forgotten that, before the reduction of the tax to its present rate, it bore the objectionable feature of being specifically a “war tax,” and as such particularly obnoxious to opposition under the received principles of international right, and that the point was practically yielded by His Majesty’s government, not merely changing the name of the tax to “extraordinary,” but by the remission, in favor of foreign subjects, without distinction, of such proportion of the rechristened tax as might necessarily go toward defraying the expenses occasioned to the insular treasury by the existence of a state of war. The objections preferred against the original tax are therefore strengthened in their applicability to the proposed enforcement of the collection of the arrears thereof. The benevolent disposition of the Spanish Government was, moreover, shown by the repeated and continued suspension of the collection of the tax, pending an international adjustment of the question.

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Under these circumstances, and in view besides of the complete and fortunate pacification of the island of Cuba, a result to which the resolved and friendly attitude of this government in the inflexible discharge of its international obligations may have contributed in no inconsiderable degree, the United States conceive that they have a more than slight claim to the consideration of the Spanish Government toward their citizens resident in Cuba, and that they may with perfect good faith ask the remission, at this late day when peace and harmony again prevail, of an impost which was not only odious at the time of its decretal, but has been since practically annulled in deference to the powers friendly to Spain.

It is presumed that protests will have been made by the representatives of foreign governments accredited at Madrid against the contemplated collection of the arrears in question. It is not known whether opposition is likely to be made to the collection of the whole of the arrears, on the ground that Germans were, by express provisions of treaty, exempted therefrom; or whether a middle course may not be pursued by assimilating the original tax to that subsequently imposed, and permitting a rebate from 30 to 22½ per cent., as is now allowed to all foreigners. It would be well for you to inquire among your colleagues and ascertain the extent of the demands, if any, which they may be instructed to make, in order not to exceed a proper limit in the presentation of the subject to the earnest attention of His Majesty’s government, as you are hereby instructed to do. It is, however, to be understood that, while identical action with your colleagues is advisable in this matter, it is not expected that you will enter into any concurrent or joint remonstrance on their part.

I am, &c.,