File No. 812.63/45.
Consul Letcher to the Secretary of State .
Chihuahua , March 27, 1915 .
Sir: I have the honor to forward herewith for the Department’s information copies of a decree reforming the mining laws of Mexico which has just been issued by the Villa Government from the office of the Department of Fomento. A translation is also enclosed.
This decree constitutes the most radical measure touching the mining interests that has been advanced by any faction engaged in the present revolution, and a close study of its provisions will reveal its character to be no less than a measure designed to bring about the practical confiscation of mining properties throughout Villa territory, since it is practically impossible for owners of claims and developed mines to comply with the requirements laid down. The action indicated realizes one particular of a prediction the undersigned has privately been making for more than a year past, and puts into a practical shape what he has believed to be and has pointed out as being the ultimate aspiration of the present movement in this country.
A further report upon the general effects of this decree will be made so soon as it is possible to give appropriate study to the question. In advance of this prospective report, I venture to call attention to the following paragraph from the Introduction to the Mining Laws of Mexico (Lic. Rodolfo Reyes: 1910: American Book Co.) page 4, which epitomizes the relation between grantor (the Mexican Federal Government) and grantee, which has formed the basis of all past transactions in ore-bearing properties (oil and coal excepted), the provisions of which are entirely abrogated now by this new decree. The paragraph indicated is as follows:
Once the mineral patent or title is issued, the grantee acquires what is known to the common law as a base, qualified, or determinable fee in the deposits. In plain language, he is the absolute owner of the mining grant so long as the mining tax is paid punctually. The nation, on the other hand, is the direct owner of all mineral deposits until actually granted; and upon grant, retains therein a contingent reversionary interest, conditioned upon a failure at any time to pay the mining tax.
It may be noted that the great majority of mineral claims held by foreigners—and principally by Americans, who are the leading developers of mining properties in Mexico because of their superior methods both in the technical operation of the mines as well as in systematic business management of them—have been bought from Mexicans at good figures; and, in addition, that large sums have been expended in the payment of what are known as “pertenencia taxes,” the pertenencia, a hectare in extent, being the unit of mine grants. There are many Americans who have bankrupted themselves in the mere payment of taxes on their mining claims, and the application of [apparent omission] their claims at this time will work better [bitter] hardships upon them.
I have [etc.]
- See, under Political Affairs, the third inclosure with Mr. Llorente’s communication of March 8, 1915.↩
The law of December 11, 1909, which defined the condition under which mining property could be forfeited, namely, non-payment of the mining tax in accordance with the provisions of the law.
Article 51. Mining property shall be forfeited by non-payment of taxes in accordance with the law pertaining to such payment; by voluntary suspension of working the mines, by abandonment of such works; and by inadequate exploitation.↩