File No. 312.115/117.


351. My 345, February 22, General Obregon has issued a decree today exacting payment within 72 hours equal to ¾ of 1 per cent on the capital of all banks, business houses, stock companies, mortgage holders, and private individuals operating within the federal district including all foreign corporations and private business men. Companies organized abroad but operating within the federal district are also subject to this payment on the basis of the actual capital invested in the Republic. A tax will also be collected in the proportion of ⅓ of the present annual tax on all taxpayers within the district. The time given will expire at 6 p.m. on Friday next and the penalties for non-compliance therewith are confiscation, the appointment of receivers, and imprisonment for 30 days. In view of the fact that some countries by virtue of existing treaties compel Mexico to exempt their nationals from the necessity of effecting such payment the diplomatic corps will have a meeting this afternoon to consider the subject.

I shall be glad if the Department will wire immediate instructions as to what I should advise American citizens to do in the matter. The general tendency on the part of foreigners is not to pay. Please make necessary representations to Carranza and kindly furnish copy to Brazilian Embassy It is reckoned this tax will aggregate twenty million pesos.

Cardoso de Oliveira.