File No. 812.512/909.
Vice Consul Davis to the Secretary of State.
Guadalajara, November 5, 1915.
Sir: I have the honor to say that it is the purpose of this dispatch to show the arbitrary manner in which mining interests are being treated by the present de facto government, and how foreigners, and principally Americans, are being made the sufferers.
First, I believe that at least ninety per cent of all investments in mining enterprises and their corollaries in Mexico, is the representation of strictly American capital.
Second, the great bulk of these investments were made under very much more favorable conditions than those which were begun to be put in vogue some five years ago, and they have since, and especially under the present government, been made almost confiscatory, and in most unjust, inequitable and arbitrary manners.
The tax, up to a short time ago, had been for several years six pesos per pertenencia—about two and one-half acres. The fiscal year begins July 1 of each year. Taxes could be paid for a whole year, or every four months, but always in advance. If not paid before the end of July, fifty per cent is added for that particular 4 months and then, if not paid before the end of August, one hundred per cent is superadded; and if not paid before the first of October, the property is forfeited to the Government. Said taxes were payable in the circulating medium of the country.
Now the above taxes have been doubled, and must be paid in metallic pesos. And this must be done whether you are, or can be put, in possession of the property or not, or whether the present government is in control of the territory wherein the property may be located, or not.
Moreover, these conditions are being maintained, notwithstanding the fact—which the Government very well knows—that for months—aside from not being able to be in possession of and work their properties—many American owners have not been able to get money from the States to Mexico so they could pay any kind of tax. Therefore—and for no fault of their own—such American investors must lose their properties.
[Page 951]This strikes me as both unjust, unfair and extremely arbitrary treatment, and if anything can be done to stay the operation of these confiscatory measures, I feel that it ought to be done, and the sooner the better.
I have [etc.]