File No. 812.516/124

The Acting Secretary of State to the French Ambassador

Excellency: I have the honor to acknowledge the receipt of your excellency’s note of July 20, 1916, in which you state that the de facto Government of Mexico threatens to place a heavy monthly tax, in gold, on the National Bank of Mexico, in violation of Article 9 of the concession granted to the bank on May 15, 1884. In view of the great importance of the interests of foreigners in the said bank, and because of the interests of foreigners in Mexico generally, you request the assistance of the Government of the United States in an endeavor to prevent such threats from being put into effect.

In reply, I have the honor to inform your excellency that, on July 28, I instructed Mr. James Linn Rodgers, the Department’s special representative near General Carranza, to report on the financial situation in Mexico, especially with reference to the threatened imposition of heavy taxes upon the National Bank of Mexico. Under date of July 31, Mr. Rodgers telegraphed that the banks have, thus far, refused to pay the extra taxes demanded by the de facto Government of Mexico, and that, on July 22, acting in behalf of the American interests involved, he was successful in having the Mexican Secretary of Finance agree to suspend, temporarily, the enforcement of the extra taxes. Mr. Rodgers adds that no action has been taken since that time, and that he has been advised that a compromise, somewhat satisfactory to all banks, will be effected in the near future.

I am glad to inform your excellency that, on August 2, I instructed Mr. Rodgers to continue his efforts in behalf of American interests in financial institutions in Mexico, to the end that no unwarranted burdens be placed upon them.

Accept [etc.]

Frank L. Polk