Papers Relating to the Foreign Relations of the United States, 1918
File No. 837.51/257
The Minister in Cuba ( Gonzales) to the Secretary of State
Sir: I have the honor to enclose herewith a translation of the law recently passed by the Cuban Congress and approved by the President, authorizing a $30,000,000 loan and providing for revenue for interest on and retirement of the bonds. This act was passed in place of the one vetoed by the President.
[Page 295]The President states, as I have already notified the Department by cable, that the taxation features are unsatisfactory in some particulars, notably as to the heavy tax on iron and copper ores. These taxes he will suspend or greatly reduce, by decree, until Congress meets, when the law will be amended.
I have [etc.]
Extract from the Official Gazette of the Republic of Cuba, Special Edition No. 87, Wednesday, August 1, 1917
Mario G. Menocal, President of the Republic of Cuba, makes known that Congress has voted, and I have sanctioned the following
LAW
Article I. The National Executive is authorized to issue Treasury bonds up to the sum of $30,000,000 current gold, of the standard weight and fineness as set forth in the National monetary law, which will bear, as maximum rate, 6 per cent annual interest, payable semiannually, when due.
The issue may be made in three parts, in the remaining fiscal year and in the following years of 1918 to 1919 and 1919 to 1920, although it may be done before and at one time if the needs of the Treasury require it and the condition of public affairs recommend doing so.
The debt will be amortized in 12 years from January 1, 1918, but amortization will start January 1, 1920 by means of semiannual drawings, which will be held with the required anticipation; being well understood that the bonds will be consolidated and converted into certificates of the National debt when peace is signed or before if the circumstances so permit—in the opinion of the Government of the Republic—reimbursing the principal and paying interest to creditors in the form stipulated or that may be stipulated when conversion is made.
Said bonds may be given in guarantee or in payment of any obligation contracted by the Treasury on account of the wars; they may be sold or hypothecated in order to collect funds to meet payments or to purchase or import standard gold currency, so as to maintain the credit and gold standard of our monetary system. The bonds may also be exchanged for the remaining outstanding bonds of series “A” and “B,” which were issued on January 1, 1915, in accordance with the financial defense law and are known as “bonds of the 5,000,000-dollar issue,” Other details and circumstances in connection with the issue will be arranged by the Government in due time.
Article II. For the payment of interest and principal when due in connection with the Treasury bonds above authorized, and to supply the budget with the funds required on account of the present state of war, as well as for the needs of the Treasury, the following imposts are created:
First: A stamp tax, which will be paid with stamps, it being understood that the engraving and stamping will be exclusively for the account of the State, which will sell them just the same as is now done with the stamps known as loan tax (impuesto del empréstito). While these stamps are being made, postage stamps and stamps from taxes no longer in force or remaining in stock, may be used, same to be fitted for said purpose by the Secretary of Finance.
The following articles will pay tax in the manner and amount indicated:
(a) Stock Exchange transactions and contracts of value, public securities originating in Cuba, at the rate of 20 cents for each transaction exceeding $500 nominal value and not exceeding $1,000, and 30 cents additional for every $1,000 and fraction thereof above the first $1,000, all nominal value.
Those securities not included in the above paragraph can not be listed on the Stock Exchange.
(b) The copies of deeds executed before notaries public or of documents kept in their archives in connection with some act or money, will bear a stamp in accordance with the following rates: Deeds and documents not exceeding $500, 5 cents; exceeding $500 up to $1,000, 10 cents; exceeding $1,000 up to $5,000, 50 cents; exceeding $5,000 up to $10,000, $1, and from $10,000 up, $5. Each authorized copy should bear a stamp as indicated.
[Page 296](c) Private receipts exceeding $25 up to $50, 5 cents; from $50 to $100, 10 cents; from $100 to $500, 20 cents; and exceeding $500, 1 dollar.
(d) Commercial orders and invoices and all acts performed within the national territory on account of contracts and transactions will bear a 1-cent stamp when amounting from $1 to $10; exceeding $10 up to $40, a 2-cent stamp; and an additional 2-cent stamp for every $40 or the value thereof up to $400; from $400 to $800, 30 cents; from $800’ to $1,200, 50 cents; and from $1,200 up, 1 dollar.
Transactions of a mercantile nature, whatever may be the amount involved, have to be made in writing, signed by the purchaser or seller, as the case may be.
(e) All policies or documents including bonding contracts by surety companies to guarantee all kinds of services, obligations, or responsibilities between private parties before the administration or in judicial proceedings; all kinds of insurance policies, excepting life insurance, will bear a 2-cent stamp for every $100 or fraction, of the amount involved. Premium receipts will bear stamps as mentioned under letter (c), according to their amount.
(f) Each page of original deeds to be filed by notaries public, and of the books of registries of property, of mercantile registries and of registries of ships or marine property, will bear a 5-cent stamp.
(g) Current account books of banks and bankers will bear a stamp at the rate of 1 cent for each page.
Certificates or deposit books for deposits bearing interest with banks or savings institutions, will bear a 2-cent stamp for every $100 above $200; exceeding $500 up to $1,000, 5 cents; and from $1,000 up, or fraction thereof, 10 cents each $1,000 or fraction.
(h) Bills of exchange, drafts, checks payable to order, promissory notes, documents of exchange in general, and all kinds of vouchers not hereinbefore mentioned, will bear stamps as stated under letter (c), according to the amount involved.
(i) Diplomas issued by the National University will bear a $10 stamp, and all other titles or qualification certificates and diplomas, a 5-dollar stamp.
(j) The records of contracts and bids of the State, the Province or the City, will bear a 20-cent stamp on each leaf. The stamps will be affixed by the contractors or grantees upon approval and closing of contract. The sheets or debit slips for public works done will also bear a 10-cent stamp each, without which payment will not be ordered.
(k) All petitions, statements, or memoranda requesting certificates, and every certificate issued by public offices of the State, the Province and the City, besides the imposts fixed by other laws, will bear a 10-cent stamp. Said documents will only be issued when applied for in writing.
(l) The certificates issued by the registrars of property, mercantile and marine, will bear a 20-cent stamp.
(m) Hunting licenses will bear a 5-dollar stamp; licenses for carrying arms in towns, $10; in the country, $3; for carrying arms both inside and outside of town, $15. Licenses for carrying arms inside and outside of towns will not be issued separately to the same party. Those having a license of the first-and second-class and desire a third-class license, the two first licenses will be canceled, deducting in his favor the amount and tax paid before. Free licenses are not allowed. Those licenses that may be issued according to special laws are excepted.
(n) First-class tickets for foreign countries sold by agents or representatives of steamship companies, will bear a stamp equivalent to 5 per cent of their price, and second-class tickets, a stamp equivalent to 2 per cent of their price. Third-class tickets are excepted from this tax.
(ñ) The licenses issued every year by the City for the circulation of automobiles for hire [of] from 1 to 4 passengers, will bear a 1-dollar stamp; the licenses for automobiles known as “automobiles de luxe for hire” of from 4 to 7 passengers, a 2-dollar stamp; the licenses for private automobiles, a 3-dollar stamp, also the licenses for private omnibuses and auto trucks. The licenses or authorization for carromates (large carts for transportation of products from the country into the city and vice versa) will bear a 3-dollar stamp, and those for two-wheel carts a 5-dollar stamp.
The licenses for the circulation of carts the wheels of which on turning cover only 6 inches, will pay $5, and those exceeding that size will pay $1.
[Page 297]Second: A tax is also fixed on sugar, which will be divided into ordinary and special. The first or ordinary tax will be 10 cents on each bag of centrifugal juice sugar, which will be paid by the owners or managers for the account of the sugar mill at the sugarhouse once the product is packed. The second or special tax will consist in the ordinary 10-cent tax per bag and an additional 10-cent tax because of the special profits on account of the war, which will be exacted as long as said kind of sugar is listed in Habana and sold at the rate of 3 cents per pound or more; both taxes to take effect on November 1 of the present year 1917.
The 48 by 29-inch bag, weighing 325 pounds or 13 arrobas (an arroba equals 25 pounds) is taken as a base for fixing the tax.
Third: The impost upon companies and corporations, to which Military Order No. 463 of 1900 refers, will include all the associations of common rights, industrial or mercantile, organized or that may be organized in Cuba or outside of Cuba, for the cultivation and exportation of sugar and tobacco, the tax being fixed upon the profits of both large industries. The amounts paid on account of the 1904 loan tax and for the exportation of sugar will be taken into account and included among the operating and maintenance expenses as the cost of production.
The exemption of this duty in regard to mines is done away with, and mining properties are obliged to pay a tax equal to 6 per cent of their profits and a 2-dollar tax for each ton of copper exported and $1 for each ton of iron.
Banks and bankers in general, not mentioned in order No. 463, will pay 6 per cent of their profits.
The accountability of every company is to be kept in standard currency.
The impost upon insurance companies is raised to 4½ per cent, including the mutual companies and the agents’ commission.
Fourth: A production tax of ¼ cent for each gallon of molasses.
Fifth: A tax of 50 cents for every 100 pounds of cattle rawhide not intended for use in tanneries and manufactures of all kinds of leather goods in the Republic.
Sixth: A tax of $1 for every quintal (100 pounds) of explosive matter which, not belonging to the Government, may be deposited in its magazines. All explosives imported into the Republic have to be stored in said magazines of the State, which will deliver same for use as needed. When the explosives are manufactured in this country, upon transporting same to places other than that in which the factory is situated, they will have to be deposited in the magazines of the State closest to the place where they are to be utilized, in order that it may be easier to see what they are going to be used for.
Seventh: The articles comprised under paragraphs 25 and 26 of the customs tariff in force will pay, as tax, an additional duty equal to that declared in each case.
Eighth: The articles comprised under paragraphs 30 and 297 of the customs tariff in force, will pay, as tax, an additional duty of 25 per cent upon the duty declared in each case.
Article III. The above-mentioned imposts will be effective from September 1 next, or when possible, or as soon as possible during the next fiscal year, save those that have a fixed date for their execution. The Finance Department will dictate the necessary instructions and the corresponding rules and regulations will be submitted.
Article IV. All documents subject to imposts that may not have the above-mentioned stamps affixed, will be of no value. The infractor, besides being fined $10 the first time and $100 the second time, will have to pay twice the amount of tax unpaid.
Article V. The Executive is authorized to organize the required services and open the necessary credits for the execution of the precepts of this law, which will take effect upon its publication in the Official Gazette of the Republic, canceling any other legal order that may be contrary to its execution.
Therefore I order that said law be complied with and fully executed.
Given at the farm “El Chico”, Marianáo, on the 31st day of July 1917.
Leopoldo Cancio
Secretary of Finance