File No. 812.512/238.
Consul Hamm to the Secretary of State.
Durango, March 24, 1914.
Sir: I have the honor to report that there has recently been opened in this city a tax and revenue office of the so-called Constitutionalist Federal Government, which office is exercising all the functions and collecting all the taxes formerly payable to the Federal Government in Mexico City. In connection with the reopening of this office, an interesting case has arisen concerning which I would respectfully ask instructions from the Department of State for my future guidance.
The taxes levied upon mining holdings or pertenencias are exclusively federal and have heretofore been collected in advance in three annual installments during the months of July, November and March of each fiscal year. The American Smelting & Refining Co. which owns extensive mines in the Velardena district of this State, paid taxes thereon directly to the Federal Government in Mexico City on July 10, 1913, to cover the first four months period, and on November 7, 1913, to cover the second four months period of the current fiscal year. Both of these payments were effected prior to the opening of the local Constitutionalist revenue office. As soon as the American Smelting & Refining Company were apprised of the establishment in Durango of such an office under the auspices of the Carranza Government, the necessary documents were forwarded to this Consulate in order that I might effect payment in their behalf for the third and last four months period of the fiscal year 1913–14.
In accordance with instructions received I personally tendered payment to the director of the local revenue office, Senor L. Aillaud, by whom it was refused on the grounds that the taxes covering the first two four-months periods have been paid to the Federal Government in Mexico City and therefore would not be recognized by the Carranza Government, hence the American Smelting & Refining Company would have to pay for the entire fiscal year. I pointed out to him that the former payments had been made prior to the opening of the tax office of the Carrancista Government and that the Company had demonstrated its good faith by desiring to pay the taxes here as soon as they had knowledge of the establishment of the local office. At my request he submitted the question by telegraph to his [Page 738] superior officer, Señor E. Perusquía, general director of taxes of the Carranza Government with offices at Ciudad Juarez, by whom the decision of the local director of taxes was fully sustained on practically the same grounds. There the matter rests at present.
Under the circumstances above outlined it neither seems fair nor just that the American company in question should be compelled to pay these taxes twice. As I have reason to believe that many American property owners in this district have effected payment of their taxes in Mexico City, either because the local revenue office was closed or as a matter of convenience, may I suggest that this phase of the tax question be taken up directly through the appropriate American consul with General Venustiano Carranza or his Secretary of the Treasury, in order that American property interests may be duly protected and American property owners may know exactly where they stand.
I have [etc.]