File No. 812.512/951.
The Secretary of State to Special Agent Silliman.
Washington, December 28, 1915.
You are hereby instructed to proceed to San Luis Potosí and bring to the attention of General Carranza the Department’s telegram of June 30 last in regard to mining taxes, copy of which you will take with you. You will point out strongly to General Carranza that the taxes imposed by the decree of March 1 last and by subsequent modifications [Page 963] thereof are not justified by laws emanating from the Mexican Constitution. You will also earnestly state to him that any collection of taxes from mining and smelting interests in Mexico which has been made by reason of the decree and modifications thereof above mentioned are to be regarded only as deposits, subject to liquidation when more nearly normal conditions have been restored in Mexico.
The Department is informed that some of the American mining interests, through inability to meet the increased pertenencia tax imposed, have been compelled to suspend payment on certain of their holdings. This, however, is not to be considered as any relinquishment of rights, and you will impress upon General Carranza the importance of his not taking any action that might cloud or endanger the title to such holdings, reserving to the owners thereof the right of redemption at the time stated in the previous paragraph.
Mining and smelting properties in Mexico have endured great hardships during the past few years, paying no dividends during that time and being a drain upon the companies; and the imposition of excessive taxes now, when encouragement should be given, would result disastrously. These mines employ more than five hundred thousand Mexicans, affording sustenance to five times that number. The resumption of work is desired by the companies and it is of great economic importance to the de facto government, because every laborer earning an honest wage is a factor in the restoration of peace and order.