Mr. Pitkin to Mr.
Blaine.
Legation of
the United States,
Buenos
Ayres, February 26, 1891. (Received
April 3.)
No. 102.]
Sir: I have the honor to report that on the night
of the 14th instant I received from the foreign office an answer, herewith
transmitted in copy and translation, to the protest made against partial and
oppressive levies by recent Argentine enactments upon foreign life-insurance
companies, which protest, relating to companies resident in the United
States and by branch here, Mr. Secretary Fishback made on the 10th ultimo
and I renewed on the 30th ultimo, live days after my return from the United
States. Twenty days having then elapsed without an expression upon the
question from the foreign office, I conceived it to be proper to discharge
the Department’s cabled instruction of the 5th ultimo in more extended
terms, a copy whereof accompanied dispatch No. 94. It will be seen by the
inclosures that the minister of foreign affairs commended recourse by said
companies to the federal supreme court of the Republic as the only authority
competent to consider the alleged grievance, and declared a discussion of
the question to be inefficacious and unnecessary prior to a determination by
that tribunal. The term “reglamentar” in the common legislative instruction
to the President, “El poder ejectivo reglamentara esta ley,” so often seems
to import more, or to be more elastic, than our own term “execute,” that I
indulged a hope that, by reason of the protest, the laws in question might
receive a more favorable interpretation. A copy of an executive decree of
the 24th instant, herewith inclosed, will show that the 7 per cent tax on
profits and 1 per cent on premiums received at this federal capital, are not
to be imposed in the execution of the recent provisions.
Furthermore, I am advised by the manager of the Equitable Life Insurance
Company, Mr. T. T. Watson, that it has been invited, by the assent of the
minister of finance, to file an application to be admitted to the same
footing as native companies when it shall invest $100,000 in the Republic
and constitute a local board. This application has been exhibited to me, and
is framed under direction of the Equitable management in expectation of an
early and favorable administrative decree thereon. Recourse to the federal
supreme court will probably be wholly unnecessary in order that the
companies may reopen their doors here. The Equitable manager expresses much
satisfaction with results, which he ascribes largely to the protest
made.
I have, etc.,
[Page 8]
[Inclosure 1 in No.
102.—Translation.]
Señor Costa to Mr.
Pitkin.
Argentine Republic,
Ministry of Foreign
Affairs,
Buenos
Ayres, February 13,
1891.
Mr. Minister: The note dated January 30 last
has been received, wherein the minister renews the protest framed in his
absence by the secretary of the legation, Mr. Fishback, by reason of the
laws originated in the National Congress imposing certain duties on
life-insurance companies established in the United States with branches
existing in Argentine territory. The minister states that these
insurance companies have established their agencies in the Republic
under the declarations of the constitution, wherein its article 16
states that equality is the basis of taxation and of public charges, and
article 20 assures strangers all the civil rights of its citizens,
freedom in pursuits, and immunity from forced contributions. Moreover,
the minister considers that the taxes in question are in contravention
of article 9 of the treaty of July 27, 1853, in force between the
respective Governments, by which it is arranged that “in whatever
relates to the acquiring and disposing of property of every sort and
denomination in any manner whatsoever, as also in the administration of
justice, the citizens of the two contracting parties should reciprocally
enjoy the same privileges, liberties, and rights as native citizens, and
they shall not be charged in any of those respects with any higher
imposts or duties than those which are paid or may be paid by native
citizens, submitting, of course, to the local laws and regulations of
each country respectively.”
By reason of the foregoing the minister considers that the taxes in
question are not in consonance, either with the cited treaty or with the
constitutional pledges of equality, and renews the protest made by Mr.
Fishback. If the minister will permit me, it does not enter the
discussion whether the laws of Congress were or were not accommodated to
the constitutional principles which are lodged in the organic letter,
still less whether the taxes which have been thought convenient to enact
are just or excessive.
It is an incontrovertible principle that the entire nation is the sole
and exclusive interpreter of its internal laws, and to establish taxes
upon existing property in its territory Congress has done no other thing
than to exercise a right inherent in the sovereignty of the State. And
no one more than the North American Congress has given unimpeachable
evidence of the amplitude of this right, establishing duties which are
calculated to disturb secular pursuits. The protest of the minister
could be admitted and examined only under the point of view of existing
treaties.
By chance, however, our constitution, after the example of that of the
United States, removes this discussion from the restraint of the public
powers. The federal supreme court, among ourselves as in the American
Union, is the authority charged to determine whether a law is contrary
to existing treaties, in the constitution or in the laws of
Congress.
Whether, then, the taxes to which the minister refers contravene the
declarations and premises of the constitution or the stipulations of
treaty, the American insurance companies should repair to the federal
supreme court, persuaded that in that tribunal they will meet the
justice to which they assert a right. While this high and supreme body
has not pronounced its definitive opinion, I permit myself to say to
your excellency that all discussion is futile and unnecessary. Having
thus answered the communication of the minister, it is pleasing to
present to him the expression of my much distinguished
consideration.
[Inclosure 2 in No. 102.—From the Buenos
Ayres Standard, February 25, 1891.]
Decree of the President.
The President of the Republic issued the following decree to-day:
- “Article 1. The tax of 7 per cent on
the policies of insurance companies, established by article 6 of
law 2714, shall be understood as a special form of collecting
from said companies the tax to the same amount imposed by
article 5 of the same law on all joint-stock companies, and,
consequently, insurance companies, whether joint stock or not,
are not included in the provisions of article 5.
- Art. 2. The tax of 7 per cent on the
policies of insurance companies imposed by article 6 of the law
is virtually the increase of 1 per cent in the tax established
by article 27 of the general stamp law voted for 1890, and which
remains in force for the present year; consequently the said 1
per cent shall be considered suppressed from the moment that the
7 per cent tax comes into force.
