File No. 812.63/65.
Mr. Harold McLeod Cobb has filed a protest against the confiscatory
nature of this new mining law, which I take pleasure in forwarding to
the Department as enclosure No. 1 to this despatch.
As a matter of fact if this law is put into effect and carried out
according to its terms it will mean the confiscation or, at least, the
loss of a great deal of mining property in this consular district upon
which the owners have paid taxes for many years and which they believe
they had good title to. The law is clearly a breach of faith with the
mining interests.
[Enclosure No. 1.]
Mr. Harold McLeod
Cobb to Vice Consul Coen.
American Consulate,
Durango,
April 8, 1915.
My Dear Sir: The writer, an American
citizen, the owner of mines and following the vocation of mining for
the last 12 years at Guanacevi, Durango, Mexico, wishes to protest
to you as United States Consul against the new mining law signed on
the 19th day of March 1915, and dated at Monterey, N. L., that you
may place my protest before the proper authorities of the State
Department at Washington. This law works an injustice, is
confiscatory, and in practice is absolutely impossible to comply
with, no matter how much the foreign mine owner might desire to do
so. All this will be explained by me in detail at another place,
when the various articles of the law are analyzed. I might also
point out that the U. S. Government has repeatedly warned its
citizens to temporarily abandon the Republic of Mexico, until such
time as conditions become normal and peace is restored, and life and
property secure.
This new mining law makes it compulsory to actively operate all
mines, naturally necessitating the return of foreigners owning
mines; for in what other manner may a mine be actively operated
unless the owner is present to arrange the financing and the
thousand and one details incident to mining operations. To do this,
American citizens will either have to disobey President Wilson’s
instructions, or lose their properties. But let us carefully analyze
and study this new law, copy of which I hereto attach translated
into the English language.
I respectfully call your attention to article 1 of the new law,
reforming article 51 of the old mining law under which foreigners
acquired their mining interests in Mexico and expended hundreds of
millions of dollars of their capital; the only manner in which their
mines could be forfeited under the old law, after once acquiring
title from the Mexican Government, was by failure to pay the
Impuestos Mineros or mining tax to said government on each hectare
(equivalent approximately to two and one half acres). Now under the
new law of reformed article 51, mines are to be forfeited for
additional causes, as for example:
If work is paralized or abandoned voluntarily during a period of 60
days or more, and as I have said, considering President Wilson’s
instructions to foreigners, this new law, if complied with will
force Americans to disobey their President’s orders and return to
Mexico. But what I regard as the hardest, I might say most unjust
portion of article 1 of the new law, is that portion that states
that all mines will be declared forfeited on account of insufficient
work, no matter if we have complied with all other requisites of the
Mexican Mining Law and have paid our taxes and are working our
properties at the risk of our lives, and doing the very best we can,
yet if we do insufficient work, our mines are null and void as far
as the title from the Mexican Government is concerned.
Now the question arises, what constitutes insufficient work? This is
a very ambiguous term, and it is left with the mining agents of the
different camps to state what constitutes this insufficient work, or
in other words, when a mine is to be declared forfeited. This seems
to me to be placing very arbitrary
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powers in the hands of said mining agents, and
should any of these mining agents be venal, it would be a very easy
matter to declare a valuable mine, on which foreigners have expended
hundreds of thousands, or millions of dollars, forfeited, so that
friends of theirs (the mining agents) may subsequently acquire title
to the same; it is this portion of the law that seems to me to be
the hardest, and impossible to comply with. If a specific amount of
work was stated, Mining Companies and mine owners could and would
use every effort to comply with the law, but at the present no one
knows how little work constitutes insufficient work and how much
labor constitutes sufficient work.
I also wish to call especial attention to article 3 of the new mining
law, where it says that each owner of a mine shall maintain in
activity at least one work of exploitation for each five hectares of
surface. Even assuming there be ore to extract, this is impractical
as the Mexican Mining Law is one of vertical side lines, and mines
having an ore body with a dip from the vertical to the horizontal
take up additional hectares or pertenencias of surface to protect
their veins on the dip from passing out of their territory as depth
is attained; therefore these extra surface holdings can not possibly
be operated until the ore body reaches these extra side line surface
holdings, due to the further deeper mining operations necessitated
by the company; which work may take six months or may take ten years
to consummate. This portion of the law is absolutely impossible to
comply with as may be seen at a glance.
The object of this new law has apparently the idea of stimulating
mine owners to commence active operations on their properties. But
mine owners do not need such measures; the main stimulant that they
have and always have had is the desire to make money out of their
properties. No mining company or owner would maintain watchmen and a
crew of employees in idleness; pay mining taxes to the government
which is a loss or drain on their resources, if by working they
could by the extraction of ores pay these dead expenses. Why are the
mines shut down?
- a.
- For lack of mining supplies, due to poor transportation
facilities.
- b.
- For lack of cars or railroad facilities for the transportation
of ores to the smelters.
- c.
- For lack of smelting facilities.
- d.
- Why are only 10 per cent of the smelting capacity of the
smelters in Mexico in operation? For lack of coal and coke. Why
is coal and coke lacking? For want of transportation
facilities.
It will be readily seen that the basis of all mining stagnation is
due primarily to the lack of railroad transportation for supplies,
which should go directly to the mines, or to their allied industries
“the smelters.”
What is the cause of this lack of railroad transportation? The
disturbed condition of the country due to the revolution; a
condition that we foreigners are not responsible for, nor over which
we have any control. Therefore it seems very unjust to me to make
new laws that are impossible to comply with, due to the disturbed
political condition of the country, and threaten our mines with
confiscation if we do not comply with same.
Another cause of the shutting down of many mines having mills for the
beneficiating of their ores, is lack of cyanide. This chemical is
absolutely necessary for the treatment of the bulk of the low grade
ores containing either gold or silver, or both of these metals, and
the great source of supply of cyanide for Mexico has, in the past,
been Germany. Due to the fact that Germany is at war and not
exporting this article, many mines can not secure cyanide at any
price and in consequence can not operate their mills, and without
the mills in operation they have no way to treat the ores extracted
from the mines.
Résumé: I will say in closing that if this
new law is enforced, a large proportion of the mines of Mexico will
become forfeited, as it is a physical impossibility to comply with
same.
- 1st.
- For lack of transportation facilities due to the fact that
railway service is intermittent and in some portions of the
country, out of service entirely.
- 2d.
- Lack of cyanide for the mills.
- 3d.
- Smelters out of commission.
- 4th.
- Risk of life attendant to the operation of mines in isolated
sections of the country.
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I therefore request, that the State Department of the United States
use its good offices to try and persuade the Conventionist
Government of the hardship this new law will work on all foreign
held mines, and request that the law be modified.
Respectfully submitted,
