600.127/174

The Association of Producers of Petroleum in Mexico to the Secretary of State

Sir: For the information of your Department, there is enclosed copy of an export tax decree61 as to which the Mexican Government has invited suggestions from the oil companies prior to its publication.

Apart from the increases involved, in the case of crude petroleum of 0.93 from 10% to 12%, the decree has the fundamental defect that, while establishing an export tax, it nevertheless provides that, in order to determine the values of the several products on which the tax is to be levied, “the average of the values obtained for similar products in the United States of the North during the preceding month” (Art. V), will be taken, without making any provision for deducting transportation charges. In other words, the measure seeks to create an export tax based on values obtaining, not at the port of shipment, but in the United States.

The Association of Producers of Petroleum in Mexico will meet tomorrow to consider the proposed measure, and will be pleased to advise the Department of the action taken.

We have [etc.]

Association of Producers of Petroleum in Mexico
By
H. N. Branch
  1. Dated May 24, 1921; not printed.