File No. 611.627/362.
The German Ambassador to the Secretary of State.
Washington, February 15, 1911.
Mr. Secretary of State: In reply to your excellency’s note of the 11th instant, I have the honor to say, by direction of my Government, that nothing is known at either the foreign office or imperial treasury of a collection of the excess production tax in question on the potash output. The collection concerns the several States; in consequence the Imperial Government has in accordance with your excellency’s wish entered into communication with the offices concerned, and begs to reserve an answer.
I further have the honor, in compliance with my Government’s instructions, to submit the following to your excellency:
On the American side it has heretofore been declared that the American purchasers did not have to bear the excess production tax, as was stated in Ambassador Hill’s note of June 9 of last year and in oral conversations had at Berlin. In a statement published on January 6 of this year in the press of this country, Messrs. Bradley, Brewster, and others take the same stand. It further appears from the same statement that the purchasers have declined to receive the surplus quantity, or only paid the taxes under protest.
In consequence my Government is of opinion that any declaration of the purchasers differing from the previous ones will not suffice, unless your excellency can supply me with a legally binding—say a notarial—declaration of the purchasers by which they expressly recognize their liability to the excess production tax, and say that this recognition is also made in regard to the sellers and intended for them. Otherwise, in my Government’s opinion, arbitration must decide the question whether under the private contracts the tax is to be borne by the American purchasers.
[Page 231]As soon as one of the two foregoing conditions is fulfilled the Imperial Government will, in accordance with the memorandum handed to your excellency, be quite ready to propose prices for the products affected by the excess production tax. The ascertainment of these prices however will require some computations that will take some time for their completion. Accept, etc.,