Sir Julian
Pauncefote to Mr. Hay.
British
Embassy,
Washington, April 17,
1899.
Sir: I have received a dispatch from the
Marquis of Salisbury calling attention to the fact that legislation has
recently been enacted in certain States of the Union by which a
discriminating tax has been imposed upon foreign fire insurance
companies as against American companies.
Lord Salisbury has received a strong appeal on the subject from the “fire
offices committee” in London, who point out that there are twenty-three
British fire insurance companies represented in the United States, that
not one of them has ever failed to meet its obligations in the United
States, and after fifty years of trading, involving transactions of
hundreds of millions of dollars, they would now, by the differential
impost in question, be called on to pay not only more than the native
companies, but more than the companies of other foreign nations, while
in Great Britain and her colonies, American insurance companies are free
to carry on their business on the same footing as British companies.
The inclosed letter from the resident manager of the Liverpool and States
Insurance Society (whose chief offices are in New York) gives details as
to the legislation enacted by the State of Iowa and that pending in the
States of Missouri and Nebraska on this question, and dilates upon the
unfavorable position on which the British companies are placed in these
States, as regards not only American companies but those of other
nations. The treaties in force between Belgium and Switzerland and the
United States contain provisions which expressly forbid the levy from
the subjects of those countries of any tax or duty higher than that paid
by the citizens of the United States, and it is hardly credible that the
Government of the United States can wish to place British subjects in a
less advantageous position than other foreigners.
I have accordingly been instructed to request your serious consideration
of this matter, with the view of averting, if necessary, by a treaty “ad
hoc,” the injury with which the British insurance companies are
threatened by the discriminating legislation, of which they legitimately
complain.
I have, etc.,
[Inclosure.]
Mr. Eaton to
Sir Julian
Pauncefote.
Washington, D. C., March 25, 1899.
[The Liverpool and London and States Insurance Company,
chief office in United States, 45 William street, New York.]
Sir: I desire to call your attention to the
fact that there are now pending in the legislatures of various
States of the United States, and amongst others in the States
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of Missouri and Nebraska,
bills imposing a discriminating tax on the premiums of
fire-insurance companies of foreign countries, and amongst them the
companies of Great Britain are affected.
In the greater urgency of the case, your attention is particularly
directed to the measures in the States above quoted, in which a
distinction is sought to be made between companies of the other
States and companies of other countries, the tax sought to be levied
on the class last named being much higher.
The companies of Great Britain are and have been quite willing to be
classed with companies of other States as to taxation, but they
protest against action which is harmful to their interests, and
which, by an expansion of the principle, might easily be carried to
the point of prohibition.
Two years since the State of Iowa granted a law imposing a tax of 1
per cent on the premiums of companies of that State, 2½ per cent on
the premiums of companies of the other States, and 3½ per cent on
the premiums of companies of foreign countries. This tax was paid by
British companies under protest, and litigation is now in progress
as to the constitutionality of the act and as to other points, which
may in course of time find its way to the United States Supreme
Court for final action.
We feel unable to wait the result, with its attendant injury to our
interests and possibly of danger to us in other States, which might
in the interval be equivalent to expulsion and we now respectfully
ask your aid in an appeal to the treaty between the United States
and Great Britain, claiming that whilst American fire and life
companies enjoy and have enjoyed complete liberty of commerce in
England reciprocal liberty of commerce is not enjoyed in this
country by companies of Great Britain in the State of Iowa, and that
restriction on this liberty is sought to be imposed by some other
States, and amongst them the States of Missouri and Nebraska.
Your obedient servant,
H. W. Eaton,
Resident Manager.
