File No. 812.63/63.

Mr. Sidney Smith to the Secretary of State.

Dear Sir: I desire to call the attention of the State Department to an order issued by V. Carranza, First Chief [etc.] with reference to a tax attempted to be levied and enforced against mining properties in Mexico.

[Page 900]

I represent the American Consolidated Mining and Milling Company, a corporation duly incorporated under the laws of the State of Oklahoma, and am attaching hereto a copy of the order above referred to, which, if carried into effect, will mean the absolute confiscation of all of the property of the company I represent in the State of Oaxaca in the Republic of Mexico.

Our company owns 338 pertenencias, in perfecting our title to which we have been out a large sum of money from which we have had but very little returns; and an attempt on the part of the Revolutionary Government of Mexico to enforce the attached order against us at this time would render it impossible for our company to meet the demands of the Government, and would result in the absolute confiscation of our holdings. I would therefore respectfully request that the State Department’s representatives in Mexico be advised by your Department to interpose its protest against the unreasonable and unjust attempt to deprive us of the use or benefit of our property by the enforcement of the attached order.

Respectfully submitted,

Sidney Smith.

Mining decree issued by Carranza at Vera Cruz, March 1, 1915.

I, Venustiano Carranza, First Chief of the Constitutionalist Army, in charge of the Executive Power of the Nation and Chief of the Revolution, by virtue of the extraordinary powers wherewith I am invested, have found it proper to decree the following:

  • Article 1. Articles 2, 5, 9, and 10 of the Law of March 25, 1905, relating to stamp taxes and mining franchise taxes are hereby amended to read as follows:
    • Article 2. Ores produced in the Republic or proceeding from a foreign country are subject to an internal stamp tax, with no exceptions other than those expressly made by this law. Said tax will be imposed in the future as follows:
      Metals exported in the form of mineral rock or earth, cyanided or sulphurated, residuum of smelters, or in any other form in which they may be combined or mixed with other substances which are not metals, properly speaking, as follows:
      • Gold: At the rate of one hundred and ten pesos ($110) a kilogram.
      • Silver: At the rate of two pesos, sixty centavos ($2.60) a kilogram.
      • Copper: At the rate of three and one-half centavos ($0.03½) a kilogram.
      • Lead: At the rate of six centavos ($0.06) per ten kilograms.
      • Zinc: At the rate of five centavos ($0.05) per ten kilograms.
      For metals which may be treated or smelted in the country to the extent that they are not alloyed or mixed with other metals, whatever may be the assay of the product, the imposts fixed in the preceding paragraph shall be reduced by 20%.
    • Article 5. No tax will be imposed, etc.

      G. Nor will taxes be imposed upon copper when the minerals contain the said metal in the proportion of less than three per cent (3%); on lead when they contain it in proportion of less than ten per cent (10%); nor on zinc when they contain it in proportion of less than fifteen per cent (15%).

    • Article 9. The special stamp tax, which, according to the laws in force, must be fixed on titles of ownership of mines, will be ten pesos ($10) for each pertenencia protected by said titles, whatever may be the mineral substances that it is intended to exploit.
    • Article 10. The annual tax on ownership of mines shall be imposed in the following terms:
      The quota will be twelve pesos ($12) annually for a mining pertenencia, or four pesos ($4) for each third of the year, whatever may be the substances which may be exploited.
      If the number of pertenencias of a mining property or of different mining properties belonging to the same owner and situated in the same mining district shall exceed ten pertenencias, the quota of taxes will be imposed at the rate of twelve pesos ($12) for the first ten pertenencias, and for the excess up to twenty at the rate of fifteen pesos ($15); for the excess from twenty to fifty the quota will be eighteen pesos ($18); and from fifty-one on at the rate of twenty-four pesos ($24).
  • Article 2. Article 3 of the said Law of March 25, 1905, is hereby repealed.
  • Article 3. All sums which the Treasury must receive in conformity with the present decree and the said Law of March 25, 1905, must be paid exclusively in national gold coin.

[Page 901]
  • Transitory Article 1. This decree will take effect on the date hereof.
  • Transitory Article 2. For mining properties which may have pending the payment of taxes, and in respect to which no forfeiture has been declared, a period is hereby granted until June 30, 1915, within which to pay in gold the amounts due in conformity with the quotas herein specified.

V. Carranza.