to Mr. Evarts
Mexico , December 9, 1878. (Received January 2, 1879.)
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.,