File No. 812.512/596.

Consul Guyant to the Secretary of State.

No. 341.]

Sir: I have the honor to acknowledge the receipt of the Department’s telegraphic instruction of March 26, 1915.

Cantú has stated to me, and his military representative here has lately reiterated, that he recognizes the Convention Government of Mexico—which I understand is the present de facto government in Mexico City—as supreme. From personal observation, however, I would say that he is “subject to its orders” only so far as suits his convenience. Lower California is relatively so unimportant in furthering the interests of either Villa or Carranza that the local dictator, acting with discretion, has practically a free hand, and Cantú, taking advantage of this, is more independent than a European monarch.

About a year ago when paper money—which had depreciated in value—was circulating here, mining taxes were doubled in order to offset the depreciation in paper currency. Now that paper is not accepted and all payments of taxes must be made in silver pesos or American money the increased amount demanded works out as a hardship, but naturally no move has or will be made to place the taxes on their former basis. Most American mine owners have paid their taxes for the ensuing four months (the time for payment expiring today) in silver; but two companies, desiring to test the order not to receive paper money, have today tendered payment of their taxes in that currency. Upon its being refused they have notified the tax collector that the money is deposited with local merchants subject to his order at any time he may produce a receipt for the taxes paid. When mining taxes are not paid upon falling due the owner must pay 50 per cent additional if he pays them within the next succeeding three months, after that he has three more months during which he can pay with 100 per cent added. If not paid at the end of the second three months the mines are sold for taxes. It appears that these two companies are doomed to fail in this attempt to force the acceptance of paper money for the simple reason that it is not legal tender. However, on account of the doubling of the taxes they will undoubtedly resist any move to nullify their titles.

Another unjust action in the matter of mines have upon decree nullifying all mining titles issued during the Humanitan. Americans [Page 968]here who obtained titles during that period were given until today to redenounce their mines. As they could have no assurance that in the future such redenouncement would legalize their holdings any more than the original titles, they have taken no action but will look to the United States to protect them against confiscation. This matter was reported to the Department in my despatch No. 328 of February 8, 1915.

With reference to the second part of the Department’s telegram above quoted, mining taxes should be paid in Ensenada to the administrator of the stamp office, Julio Viderique, in the same manner as always. Mail payments are, however, insecure and unsatisfactory and all Americans owning mines should have—and nearly all do have—agents here to attend to the matter for them.

I have informed Colonel Cantú by mail that the American Government advises that, on account of existing confusion, no action should be taken for the forfeiture of mining title held by American citizens because of non-payment of taxes.

I have [etc.]

Claude E. Guyant.