File No. 812.512/1540
Washington, January 25, 1917, 1 p.m.
630. Reference Department’s No. 2051, January 12, mining decree. Say to appropriate authorities that the Government of United States emphatically dissents from General Carranza’s declaration that subject matter of representations made by you December 12 is exclusively within province of Mexican authorities and that, under principles of international law, there is no ground for diplomatic discussion this matter. On the contrary, this Government holds that it is amply justified in diplomatic intervention respecting pertenencia taxes imposed in mining decree of May 1 last, since such taxes are confiscatory in effect, as has been abundantly proven in practice, and are detrimental to many American citizens.
Confiscatory operation of these taxes has been heretofore called to attention of de facto Government with relation to cases of a number of American mining companies which have already been forced temporarily to surrender thousands of pertenencias on which large amounts of taxes had been paid and which were needed for future operations but could not be held because of exorbitant tax mentioned.
During the past two years the mining industry has protested continuously, both directly and through Department, to General Carranza and Mr. Cabrera against confiscatory character of tax in question but neither the industry nor this Government has ever questioned Mexico’s right to impose taxes in accordance with laws properly emanating from Mexican Constitution. However, the Government of the United States is protesting, and will continue to protest, most vigorously, against a system of taxation having for its avowed object, as stated by Señor Cabrera and the late Señor Amador, the absolute [Page 1041]confiscation of the larger holdings of mining claims in Mexico, in which so many American citizens are interested.
In view of foregoing, Government of the United States must insist that the de facto Government give said representations of December 12 prompt and adequate consideration and sincerely hopes that the friendly spirit in which those representations were made will be reciprocated by the de facto Government, and that attempted confiscation of properties will be avoided by prompt action along lines suggested in such representations.