File No. 812.512/662.

Mr. M. J. Brophy to the Secretary of State.

Dear Sir: I wish to place before you for your advice, and also in protest, the extraordinary situation we are up against in the payment of taxes on our copper properties in Lower California.

The control of this territory was seized in the early part of this year by a former Huerta officer, Col. Cantú. As must be known to your Department, he is acting in a very arbitrary manner, as evidenced by such actions as the seizing of the English merchant steamer Cetriana, whose cargo of bullion and merchandise he attempted to confiscate. He resides on the American side of the line, and is endeavoring during his tenure of office, by exorbitant impositions and taxes to squeeze every cent possible out of the country.

Col. Cantú in March demanded the payment of the double mining tax instituted by the Huerta Congress, in Mexican silver or American gold at an exchange rate of 2 for 1. By placing an impossible import duty on silver, he made payment in United States currency compulsory.

The Huerta Congress, which established the double mining tax to offset the depreciation in Mexican money, decreed that bank bills should be legal tender. For this reason, on the advice of our Mexican attorneys, we offered payment of the double tax through the American Consul in bank bills, and the same was refused.

We are advised that Mexican mining taxes are a federal matter; that the Congress of that country only, has the power to enact laws respecting them, and the interpretation of said laws can only be made by the Minister of Fomento.

We are endeavoring to effect payment of our taxes to the proper authorities and in accordance with the laws of Mexico.

Cantú in the official paper published at Ensenada admits his adherence to the Villa faction and publishes their decrees, etc. Consequently Villa is head of the de facto government of Lower California. [Page 972]We placed the matter before his Secretary of Finance in Chihuahua, and were instructed to pay the single tax in Mexican gold or American at 2 for 1, with the privilege of payment in Chihuahua.

I am informed by other interests who are involved in the same confusion and who have acted along similar lines to ourselves, that Cantú now refuses to accept the Villa decree and demands double the imposition of March with threat of confiscation if not paid during the month of May. He takes this action in spite of Villa’s decree that, because of the confusion, no penalty should be enforced.

We protest to you against the arbitrary acts of this local jefe politico and request that you take such action as may lie in your power to protect our interests in Lower California and prevent the illegal confiscation threatened.

Yours truly,

M. J. Brophy.