File No. 812.512/19.
Vice Consul Bowman to the Secretary of State.
Nogales , April 12, 1913 .
Sir: I have the honor to report that this office has been appealed to for advice by a number of American mine owners in this district with regard to the payment of their taxes, now overdue. The status of this problem is as follows.
The taxes on Mexican mining property are payable in triannual periods, called tercios. The last tercio ended March 31 and taxes not paid previous to that date are now overdue. The law provides a fine for delinquency in payment, with the ultimate penalty of forfeiture of title. These taxes were formerly collected by federal stamp agents located throughout the state. The federal government now has no officers in the district, outside of the town of Naco. The stamp agent of Nogales, Sonora, is now living in Nogales, Arizona, and cannot receive taxes. This official has advised American mine owners to withhold the payment of taxes during the period in which the state authorities control the state, assuring them that there will be no penalty attached for delinquency in this instance.
[Page 732]However, the state government has issued a demand for the payment of these mining taxes, and extended the time of payment eight days from March 31, and has also decreed that the owners of the properties shall forfeit their titles under the existing federal laws if they do not pay these taxes.
This leaves many Americans in doubt as to what should be done. As the tax is a federal tax it would seem that Americans should be governed by the instructions of the federal officers. On the other hand I have consulted with some of the state officials of influence and they reply that the provisional government at Mexico City is not the constitutional federal government, and until there is a constitutional federal government the state may assume to enforce federal laws. The state hold itself responsible for these taxes to the federal government, and up to the present is adhering strictly to the provisions of the established federal laws.
I have advised Americans whose claims are undeveloped to withhold the payment of their taxes temporarily. But those who have properties with developments subject to seizure, or who are still endeavoring to operate I have advised to pay the state agents under protest to prevent the possible confiscation of their property, or any hard feeling with the de facto authorities. I think it quite certain that the state agents will yet accept the taxes already overdue without assessing any fine for delinquency if paid soon.
Without anticipating the results of the present revolution in this state, it seems that if the American mine owners refuse to pay their taxes to the state agents, and the ultimate victor in the revolution should be the state, the mine owners might experience difficulty in recovering their titles without considerable expense.
This office would appreciate instructions from the Department for future guidance in advising Americans in this matter.
A copy of this despatch is being forwarded to the Embassy at Mexico City.
I have [etc.]