File No. 812.63/148.
Mine and Smelter Operators et al. to Special Agent Canova.
Dear Sir: Confirming our conversation at your office yesterday, I wish to say that as representative of the Mine and Smelter Operators Association in Mexico we have had many meetings recently with Mr. Escudero, Minister of Finance in General Villa’s Cabinet, with the view of securing modification in the rate of export taxes which the Minister proposed to levy upon the mining industry in the Republic. As a result of these meetings we finally entered into a contract with the Minister of Finance of Mexico, representing the Federal de facto Government, and with Mr. F. Avila, Military Governor of the State of Chihuahua, copy of which we enclose herewith marked Exhibit A.
As a result of this contract, and based upon the terms set forth therein, the decree affecting export tax was issued on the 19th day of March, 1915, copy of which we enclose herewith marked Exhibit B.
On the same date the Minister of Finance issued a decree materially modifying the law under which titles to mining properties are held in Mexico and which is most drastic in its effect, copy of which we enclose herewith marked Exhibit C.
Upon receipt by us of the decree, on March 26, 1915, the Mine and Smelter Operators called upon Mr. Escudero at Chihuahua and discussed the terms with him very fully and addressed a letter to Mr. Escudero, copy of which we enclose herewith marked Exhibit D.
A committee of the Mine and Smelter Operators Association then called a meeting at El Paso on April 1, 1915, and made representations to the State Department at Washington as per copy enclosed herewith marked Exhibit E, and sent the Secretary of State a telegram as per copy enclosed herewith marked Exhibit F, to which we received a reply from the Secretary of State as per copy enclosed herewith marked Exhibit G.
We have been furnished with a copy of a telegram from Mr. Carothers to the Department, dated at Irapuato under date of April 16 , copy of which we enclose herewith marked Exhibit H.
This gives you a complete file covering negotiations with the de facto Constitutionalist authorities under General Villa.
We are filing an official letter addressed to the State Department in Washington in which we are urging upon the Department the necessity of insisting upon the repeal of this decree in its entirety, which letter will no doubt reach you in due course.
We only wish to repeat that under no circumstances do we consider it advisable to consider any modifications of that decree, which to the best of our understanding will result unquestionably in the confiscation of many, if not all, foreign-owned mining properties within the Republic of Mexico.
As per our statement to you, we discussed this entire matter at some length with Mr. Llorente yesterday, who in the course of his conversation with us, stated that he had been advised by General Villa that this decree would not be enforced at the present time, but he gave us to understand that it would be enforced when conditions had improved in Mexico and transportation facilities were such as [Page 904]would, in the judgment of the Minister of Finance, permit of the operation of the properties. We called Mr. Llorente’s attention to the fact that this law was a very serious modification of the conditions under which titles to mining property were held in Mexico; that it was retroactive in effect; and that it imposed burdens upon the industry in general which in effect were equivalent to confiscation of vested rights in the Republic.
Llorente stated to us that it was not the intention of the Government to make the law retroactive insofar as it referred to the amount of property that could be held under the decree, but in all other respects, and particularly as to the conditions and sufficient operation, it would apply to every property within the Republic.
In our opinion it is positively necessary that our Government insist upon the repeal of this measure in its entirety, as we believe that the enforcement of the decree, even in a modified form, would surely result in an effort to confiscate foreign-owned property in the Republic of Mexico, which in turn would lead to serious international complications.
Yours very respectfully,
- W. H. Aldridge.
A. J. McQuatters.
Committee representing the Mine and Smelter Operators Association and other mine owners in Mexico.
- Inclosure 2—Exhibit B.↩