File No. 812.512/945.
Mr. S. C. Neale to the Secretary of State.
Sir: I am requested by the American Smelting & Refining Co., of 120 Broadway, New York City, through Mr. William Loeb Jr., a member of its executive committee, to bring to your attention certain facts in connection with the decrees of General Carranza, of March 1 and August 31 last, which decrees related to mining taxes.
My clients have been advised from Mexico City that the Treasury officials of the Carranza Government have informed the representative of the American Smelting and Refining Company that instead of the production or export taxes being restored to the normal tax under the general law, the taxes imposed by the decree of General Carranza will be even increased; and General Carranza has informed one of the representatives of the American Smelting and Refining Company that the pertenencia tax will be fixed at 9 pesos irrespective of the number of pertenencias.
It is apparent that such a scale of taxation would be most unjust and detrimental to American interests in Mexico and imposes more of a burden than the American mining and smelting industries in that country can possibly stand.
I learn that Senor Luis Cabrera, the Minister of Finance, will be in Washington tomorrow, the 23rd instant, and I indulge the hope that you will see your way clear to point out to Señor Cabrera the gross injustice which will be done to Americans who have invested their money in Mexico, if any such taxation is put into effect by the Carranza Government.
I trust it will be insisted that the Mexican Government collect only the normal taxes imposed by the laws and constitution of Mexico and that any change in these laws should be made by the Mexican Congress instead of imposing taxes by decree without the sanction of Congress.
The decrees heretofore issued by General Carranza have resulted in throttling the development of the mineral resources of Mexico, and even with the taxes restored to the normal basis it will require a very large expenditure of money on the part of American smelting and refining companies in Mexico to put their plants in order and to move supplies necessary for the resumption of operations.
I learn that this whole question of taxation is held open until the Mexican Government can consult with Senor Cabrera, and hence the [Page 958] desirability of Señor Cabrera being placed in possession of the facts in the case while he is in Washington.
I beg to enclose you a copy of the petition of the Mine Owners Association to General Carranza which was forwarded to General Carranza by Señor Amador, who was acting for Señor Arredondo while that gentleman was in Mexico. I beg also to call your attention to a letter addressed to the Secretary of State by Mr. William Loeb Jr., of October 19, 1915, a copy of which I have not upon my files, which very clearly and fully sets forth the situation in respect to the questions involved.
I am [etc.]