File No. 812.512/666.

Vice Consul Davis to the Secretary of State.

No. 557.]

Sir: I have the honor to hereby confirm a telegram which I tried to forward you yesterday, but could not because we are again cut off from Manzanillo:

Both central and state governments demanding repayment all taxes collected during occupation Convencionalistas. Am protesting but fear if Washington does not protest to Carranza my efforts may not avail much here.

And to further call your attention to the enclosed copy of a circular letter, from Luis Cabrera, Carranza Secretary of Treasury, to all administradores de rentas, as well as my letter to Acting Governor Berlanga, dated today, on the same subject.

I have [etc.]

Will B. Davis.
[Inclosure 1—Translation.]

Circular No. 8, relative to the nullity of payment of Federal taxes made to pretended authorities.

There are frequent cases in which Federal tax collectors inquire of this Department whether they should accept as valid the payment of taxes to the pretended authorities who without right had been occupying places that have since returned to the power of the Constitutionalist Army. Once for all, and by order of the First Chief of the Constitutionalist Army, in charge of the Executive Power, be it known by all tax collectors directed by this Department that they must not accept as valid any payment made to pretended authorities not recognized by this Government; and they will proceed to collect the taxes not heretofore collected by our authorities. This order extends to payments hereafter to be made in places now occupied by rebel forces or which they may hereafter occupy.

Department of the Treasury,

Luis Cabrera.
[Inclosure 2.]

Vice Consul Davis to Acting Governor Berlanga.

I have learned that both the Central Constitutionalist Government and the Government of this State will decline to recognize receipts issued for taxes paid during the occupation of this city by the Conventionists.

It would seem that this is not based on justice, and I will have to protest energetically against such a resolution in so far as concerns interests of foreigners under the protection of this Consulate.

Foreigners resident in the country, on subjecting themselves to this class of acts on the part of one or other revolutionary faction, would imply a recognition on the part of such foreigners of the legality of one or the other of the factions or governments, although not at present recognized by any foreign government.

I recognize that it is the duty of persons resident in a foreign country to submit to the laws and authorities resident at the time in such country, be the government de jure or de facto, and it is not for them to decide if such government is or is not legally constituted.

I will present to you the following concrete case: While the Conventionista forces occupied this city I received instructions from Mr. W. J. Bryan, Secretary of State of the United States, to pay the taxes of an American mining [Page 971] company, and to draw on him for amount so expended. I went to the tax office and made the payment, and drew on Mr. Bryan for the amount, attaching to my draft the receipts of the government I then found here.

I leave to your superior judgment whether it was incumbent on me to say if that government was legal or not, and if I should now make a second payment to the government that I now find in power, and again draw on Mr. Bryan.

I avail [etc.]

Will B. Davis.