No. 334.
Mr. Foster to Mr. Evarts .

No. 849.]

Sir: Owing to the poverty of the various state treasuries, and the disorders which exist in many of them, causing more than the ordinary expenses of government, in several states extraordinary contributions or taxes have been levied, which are weighing heavily upon all industries and commerce, and in some cases have caused open resistance on the part of the people. In the state of Jalisco the governor, by virtue of his “ample faculties,” decreed an extraordinary contribution or tax last month, the resistance to which caused a riot in Guadalajara, the capital of the state, which resulted in the death of a number of persons, and but for the interference of the federal army bid fair to result in the overthrow of the State government.

[Page 747]

There are a number of American citizens resident in that state engaged in commerce, manufacturing, and other industries. They appealed to me, asking the intervention of this legation with the Federal Government of Mexico against the tax as unconstitutional and oppressive. I inclose herewith a copy of a letter from one of the leading American citizens resident in Guadalajara, Mr. F. A. Newton, to which is attached a translation of the decree levying the tax.

I also inclose a copy of the telegraphic answer I sent to Mr. Newton, in which I stated that the tax was clearly unconstitutional, but, being general and levied equally, I would not feel authorized to intervene without instructions from Washington; and recommended resort to the Mexican courts for protection.

Within a few days thereafter I received a similar letter from an American citizen resident in San Luis Potosi, informing me of an extraordinary contribution in that state and asking my intervention. To this letter I felt compelled to give the same answer.

The unconstitutionality of the tax levy in the state of Jalisco, a copy of which decree I inclose, consists in the fact that it is imposed by the simple order of the governor, who claims the power to do so by virtue of the “ample faculties” with which he has been invested by the state legislature. But the federal supreme court decreed last year in the Goribar case, a copy of which I sent to the Department with my No. 595, of September 4 (inclosure 5, No. 2), that no other body or authority but the legislative power of the government can levy taxes, and that this latter power cannot delegate or transfer this faculty to any other power or authority, even in time of war.

Up to the present I have not been able to obtain from the Mexican Government any recognition of the right of American citizens to exemption from forced loans, levied and collected by military chiefs with the most arbitrary disregard of person and property, without the pretext of authority which the governors claim to have received from the legislatures, and in cases where there is no claim of a general or equal levy. It would, therefore, be a fruitless and unwelcome task for me to intervene in such cases as those cited herein until the claim of exemption of American citizens from forced loans was made valid and enforced. It will be noticed by the correspondence sent by this mail (see dispatch No. 850) that the Mexican Government reiterates in the most explicit terms the right of the executive power, even through its subordinate military chiefs, to levy and collect forced loans against American residents in Mexico. Before the recognition it was not so stout in the maintenance of this power, and virtually recognized the impropriety of its enforcement by repaying to a few American claimants the forced loans which had been levied upon them, and by interposing with State authorities; to prevent their enforcement against American citizens. But since the recognition of the Diaz government by that of the United States, not a single claim of this character has been paid, notwithstanding a number of Americans have been in this city urging their payment. I confess I was not prepared to expect such a course, as I supposed recognition would facilitate their settlement.

In view of the present phase of the question and of our relations, and in the absence of instructions from the Department of State, I did not feel authorized to protest against the tax decree referred to herein, especially as it had some of the forms of law and was a general and uniform tax, although clearly illegal, and I confined myself to recommending the American citizens in question to resort to the courts for protection. Their answer in such cases, however, is that the courts are under the control [Page 748] of the authorities who levy the taxes, and that no injunction or “amparo” can be obtained until after the tax decree is enforced by the collection of the taxes, if not by payment thereof, then by embargo, confiscation, and sale of property, as these tax proceedings are violent and speedy.

If the court gives a judgment in favor of the complainant, which is by no means certain, it is given after long delay and heavy expense of litigation, and after property to a large amount has been seized and sold for the taxes: And the judgment for damages when rendered is worthless, as it can never be collected in Mexico on execution against the government treasury or the individual officials. Numerous instances of this kind could be cited, but the most recent is that in the case of Mr. Blumenkron (see legation dispatch No. 844, of December 3), which is a parallel case to those presented in the present dispatch. When the decree was issued and his property seized, he applied to me, and I told him he must first exhaust his remedies in the courts. This he did, and after long litigation and expense secured the decisions of the courts in his favor and against the legality of the tax. He has sought in vain to make effective the judgment of the courts for the heavy loss sustained in the embargo and sale of a large amount of property to pay a small tax levy. He has applied to both State and Federal Governments in vain. Both the State treasury and the officials who levied and collected the tax are bankrupt. The Federal Government denies any responsibility, notwithstanding the governor in levying the tax acted under the military authority of the Federal Executive, the revolution being in progress. And such is the usual result of resort to the courts for redress against the illegal acts of the authorities.

In view of the general poverty of the State and national treasuries, and of the unsettled condition of the country, these extraordinary contributions may be expected to have frequent occurrence. It, therefore, presents to the department a question of considerable importance to determine what course is to be pursued when their enforcement against American citizens by the authorities occurs.

Until further instructed by the Department I will continue to act as in the present cases.

I am, &c.,

[Inclosure 1 in No. 849.]

Mr. Newton to Mr. Foster.

Dear Sir: This state government has just imposed an extraordinary tax on all kinds of property in this state, as you will see by the inclosed decree.

Will you please inform me per telegraph in answer to this, if, according to international law, I, as an American citizen, am to pay this extraordinary tax.

The first half of this tax is to be paid on the 1st of December, from which fact allow me to ask of you an early answer. Oblige me by sending your telegram to the office of Messrs. Ag. Gutheil & Co., of your city, who are instructed to forward the same to me.

[Inclosure in Mr. Newton’s note of November 21.—Translation.]

Jesus L. Camarena, constitutional governor of the State of Jalisco, to the inhabitants thereof:

Know ye, that in the use of the faculties conceded to the executive power of the state by decree No. 550, and considering that, with the object of preventing the revolution which threatens the state, the government has had to take precautionary measures [Page 749] ordering the organization of forces of national guards in all of the cantons, besides the forces provided for by the estimates;

That for such organization, as well as for moving the troops charged with pursuing the bands which initiated the disturbance of order, extraordinary expenses were incurred and continue to be incurred by the executive;

That to meet these expenditures the receipts fixed by the present estimates have not been sufficient, and it has been necessary to raise funds by private loans, and to divert from their object various special funds;

That in compliance with justice and for the honor of the state the deficit which has resulted in consequence of these exceptional circumstances should be met; and

That, although in normal times to decree an extraordinary tax would not be in conformity with the spirit of the constitution, this is made indispensable under anomalous circumstances, in order to save society from the evils which threaten it;

In view of which the said executive has thought proper to decree:

  • Art. 1. An extraordinary contribution is imposed for once only, of three-fourths per cent, upon mercantile and industrial capitals; of one-half per cent, upon town estates, and of one quarter per cent, upon country estates.
  • Art. 2. One half of this contribution will be paid within the ten days following the publication of this decree, and the remaining half within thirty days counted from the same publication.
  • Art. 3. The revenue employés, in order to collect this tax, will make use of the coercive faculties given to them by existing laws for the collection of ordinary contributions, all debtors who are delinquent or who resist being subject to the penalties established by the said laws.
  • Art. 4. The compensation which the treasury employés will receive for the collection of this tax will be three per cent, of the amount collected. The bureau of rents is authorized to distribute among said employés the amount of said compensation.

I accordingly order it to be printed, published, and circulated, and that it be given due fulfillment.

Palace of the government of the state.


Ignacio Aguirre,
Secretary pro tem.

[Inclosure 2 in No. 849.]

Mr. Foster to Mr. Newton.

[By telegraph.]

F. A. Newton, Guadalajara:

I regard tax as clearly unconstitutional, according to decision supreme court, Goribar case. Bat being general and levied equally, I would not feel authorized to intervene without express instructions from Washington. Americans subject to same taxes as Mexicans. Is a question of law. Remedy may be had by resort to courts for amparo.

[Inclosure 3 in No. 849.]

Mr. Pigeon to Mr. Foster.

Dear Friend: My father, Mr. Eugene Pigeon, has requested me to write to you and entreat you to inform him with regard to an extraordinary tax which must be paid. It is truly and really a very extraordinary tax, being 9¾ per cent, on the profits, which all the commerce of this city refuses to pay, and in virtue thereof has asked amparo at Guanajuato.

We would desire to know, as American citizens, whether we are compelled to pay such contributions.

Please be kind enough to inform us immediately by telegraph or by letter at Libro Mayor.

Receive beforehand our most sincere thanks for the many favors we permit ourselves to trouble you with.

Hoping soon to hear from you, I am, &c.,