File No. 812.512/1166

Special Representative Rodgers to the Secretary of State


30. In reply to Department’s 58, April 22, 6 p.m. Had extended conference with Cabrera on proposed mining taxes to-day. He stated, first, that Mexico has undoubtedly right to institute, apply and maintain its own revenue measures and that in this instance such measures are instituted in regular manner by de facto Government. Second, that Mexico Government determined to apply principle high tax to large holdings, mineral lands and low to small, this being for general benefit and in the interest of overvalues. Third, that proposed taxes not high, but only fair, and especially so to Government which needs revenue for rehabilitation after disastrous period civil disturbance. Fourth, that proposed taxes when reduced to average basis will appear low for privilege given. Fifth, that mining companies and encumbents of nationality other than American have not objected to pertenencia taxes but apparently have accepted that in good spirit. Sixth, that advisability increasing export tax should be open to question. Seventh, that intent proposed decree to develop mining industry and not to retard it. Eighth, that Mexican Government thinks proposed decree all right and will adhere to it and it remains for mining operators to say whether they desire to work under it or not.

Suggestions of compromise tax eight pesos per pertenencia and was informed would not be considered as sliding scale proposed meets view Mexican Government.

Some slight modifications in minor details proposed decree probable and perhaps export tax may be lowered after trial but think announced taxes will be maintained absolutely and that nothing more can be done at present.