CORRESPONDENCE. ARGENTINE REPUBLIC. Mr. Blaine to Mr. Pitkin. [Telegram.] WASHINGTON, January 5, 1891. Protest against levying exceptionally large tax on foreign life-insurance companies doing business in the Argentine. Mr. Blaine to Mr. Pitkin. BLAINE. No. 88.] DEPARTMENT OF STATE, Washington, January 8, 1891. SIR: I append on the over leaf, for the completion of your files, copy of my telegram of the 5th instant directing you to protest against the proposed law levying an exceptionally large tax on foreign life-insurance companies doing business in the Argentine Republic. I also inclose copy of the letter from Mr. George B. Williams, representing the Equitable Life Assurance Society of New York, on which my telegram was based. The tax is stated in the letter to be A license fee of $10,000 with a deposit of $100,000, a tax of 7 per cent on premiums, 7 per cent on dividends or profits, and, in the absence of dividends, of 7 per cent on the amount destined for the reserve fund. The tax seems excessive, and if, as alleged, the local companies are untaxed, would appear intended to drive the foreign companies out of business. I am, etc., JAMES G. BLAINE. [Inclosure in No. 88.] Mr. Williams to Mr. Blaine. 700 FOURTEENTH STREET, Washington, D. C., December 22, 1890. (Received January 6, 1891.) SIR: On behalf of the Equitable Life Assurance Society of New York, I would state that information has been received "that it is proposed by the Congress of Buenos Ayres to impose a license fee of $10,000 upon foreign life-insurance companies, to require a deposit of $100,000, to levy a tax of 7 per cent on premiums, besides 7 per H. Ex. 1, pt. 1—1 1 cent on dividends or profits, and, in the absence of dividends, 7 per cent on the amount destined for the reserve fund." I am requested to call your attention to this proposed legislation, and to state that such an act would destroy the business of American life insurance in Buenos Ayresa business that has reached large proportions. I submit this matter to you for such action, if any, as you may deem proper. GEO. B. WILLIAMS. [Telegram.] NEW YORK, December 31, 1890. TO GEORGE B. WILLIAMS, 700 Fourteenth Street, Washington. We have just received following cable from Buenos Ayres: "The legislature will probably pass the bill. Am advised by my lawyer that if you resist success 18 probable, because, according to the constitution, taxes must be equal to taxes of local companies. The latter are untaxed. Please telegraph instructions." We have replied to employ best counsel to defeat the bill. Can our Government be induced to cable instructions to our minister there at our expense? This is the bill about which I telographed and wrote to you on the 20th. J. STAHEL. No. 94.] Mr. Pitkin to Mr. Blaine. LEGATION OF THE UNITED STATES, Buenos Ayres, February 5, 1891. (Received March 27.) SIR: I have the honor to report, in respect of the cabled instruction of the 5th ultimo to this legation to protest against the levy of an exceptionally large tax on foreign life-insurance companies doing business in this Republic, that Mr. Secretary Fishback, then, and till my arrival from the United States on the 25th ultimo, in charge, advises me that said telegram did not reach his hand till the 10th ultimo, whereupon he punctually obeyed the instruction by addressing the minister of foreign affairs a pertinent communication, and that on the 30th ultimo, five days after my return, I took prompt occasion, when advised that the acts obnoxious in the particular direction had just been promulgated by the Executive, to transmit to said minister a further and more explicit protest, to which no reply has thus far been received, but is confidently expected at an early hour. Meantime the branches here of the Equitable and New York life-insurance companies have been constrained to close their doors. I have, etc., [Inclosure 1 in No. 94.] JOHN R. G. PITKIN. Mr. Fishback to Señor Costa. LEGATION OF THE UNITED STATES, EXCELLENCY: I have the honor to address and to inform your excellency that I have received from Washington, from Mr. Blaine, Secretary of State, a cablegram instructing me to protest to your excellency's Government against the levy of an exceptionally large tax on foreign life-insurance companies doing business in the Argentine Republic. I herewith do so with the greatest respect, and I have the honor to remain, etc., GEO. W. FISHBACK. [Inclosure 2 in No. 94.] Mr. Pitkin to Señor Costa. LEGATION OF THE UNITED STATES, I have the honor to remind your excellency that before my return to this legation from the United States, Mr. Secretary Fishback, then in charge, addressed on the 10th instant, and under instructions from my Government, a protest to your excellency against the levy of taxes and a patent charge, each esteemed onerous, upon and in discrimination against branches, resident here, of life-insurance companies established in the United States. These levies and charge are by virtue of enactments just promulgated by His Excellency the President of this Republic. These companies-the Equitable and New York life-insurance companies-through said branches and under the declaration in the Argentine constitution (article 16) that "equality is the basis of taxation and public charges," entered the Republic; acquired by charter a character coequal with native companies in the same sort of enterprise as juridical persons; entered into solemn covenants alike as to the Government and citizens here; and repo sed faith in the further warrants presented in article 20 of said constitution assuring to foreigners in this territory all the civil rights of its citizens, the pursuit of their avocations, and exemption from extraordinary forced contributions, in article 4 of said instrument in guaranty of equitable and proportional levies upon the population, and in article 9 of the treaty concluded between our respective powers on the 27th day of July, 1853, whereby, "in whatever relates to the acquiring and disposing of property of every sort and denomination in any manner whatsoever, as also in the administration of justice, the citizens of the two contracting parties shall reciprocally enjoy the same privileges, liberties, and rights as native citizens, and they shall not be charged in any of those respects with any higher imposts or duties than those which are paid or may be paid by native citizens, submitting, of course, to the local laws and regulations of each country respectively." In so far as the new enactments of the Argentine Congress relate to life-insurance companies of the United States acting under registered right of domicile in this Republic and appear to be in consonance neither with the recited treaty stipulation nor with the constitutional pledges of equality in levy enforced, I deem it proper to renew to your excellency the respectful protest communicated by Mr. Secretary Fishback, of this legation. No charge appears to have been alleged, nor, I venture to assert, could be maintained, that these companies have during their tenure here been guilty of any act in prejudice either of their charters or of the rights of Argentine citizens and thus merited a penalty such as the enacted discrimination might import. Were the burden imposed upon all companies of kindred character, the particular companies mentioned might forbear to participate in a remonstrance against its equal while oppressive weight; but, having earned a foothold here in strict compliance with the Argentine laws, having sufficed every requirement common to all similar resident companies in discharge of federal and provincial patents and other annual public obligations, having contracted with Argentine citizens that have numerously chosen to repose especial confidence in them as companies whose probity and solvency are everywhere unchallenged, and having relied upon as exact a good faith in the prescripts of this Government as they inflexibly exhibit in the payment of their policies, they are now menaced with exactions the enforcement whereof they allege will dismiss them from the Argentine field. His excellency the minister of hacienda stated in his communication of the 18th ultimo to the Argentine Congress in relation to the tax bill in question that the tax of 2 per cent on gold and paper deposits in the private banks is explained by the necessity and advisability of driving all this local capital into the National Bank and the Provincial Bank of Buenos Ayres. The same discrimination against the insurance companies of my country represented in branches here will, I am persuaded, result in their being constrained to do forthwith for themselves what your excellency's Government is empowered to do in terminating their business in this country. I find upon due inquiry that the companies in whose behalf I speak would entertain no objection whatever to the penalties prescribed against a dishonest or evasive compliance with the requirements in relation to periodical exhibits of their annual business, because their invariably correct conduct would never subject them to such hazard, nor an urgent objection to a deposit in guaranty, which, under the executive classification, would by reason of the world-wide rank of these companies be doubtless rated at the highest figure recited in the law ($100,000); but the same classification would, it may be presumed, logically fix their annual national patent at $10,000, a tax not only excessive in itself, but the more inequitable, not only because levied solely upon other than native companies, but also because superadded thereto and with like discrimination are a national tax of 7 per cent levied upon their premi ums and 4 per cent upon additions from premiums received to surplus and reserve funds, and yet again the patents imposed by the provinces, which also may at any moment assess premiums. The gravity of the new provisions furthermore appears in the fact that the aggregated tax paid by the Equitable and New York life-insurance companies in home taxes on buildings and in taxes on premiums, patents, licenses, fines, and fees in all other parts of the world to which they have extended their agencies averages less than 1 per cent of their income in premiums. Up to the date of the recent enactments they were paying 1 per cent, or more than said average rate, on premiums received at this capital, as also their respective patents of $1,500 and $1,000. The new legislation not only appears to retain the old tax of 1 per cent under the stamp act, but in the particulars mentioned exacts not less than 11 additional per cent on premiums, and also a patent, which, measured by the premiums of said companies here in 1890, would subtract a further tax of 5 per cent-a total of 17 per cent, which, I submit, will prove in effect prohibitory. If this presentment be, as it seeks to be, correct, the law enacted will work instant and irreparable injury to said companies now in occupation of numerous offices established at great expense throughout the Republic; disband a considerable force of agents diligent in serving Argentines who seek or hold the polices of said companies; seriously interrupt the proper discharge of existing contracts as to the payment of premiums and sums assured at maturity; forbid an extension of the present advantage secured by these companies under their mutual system to policy holders, in marked contradiction, as I am advised, to the especial profit derived by shareholders under the system maintained by native companies; and arrest an equal participation in honorable and practical service to the general prosperity of a Republic whose hospitality has been not only proverbial but hitherto illustrated in its laws, and with whose people those of the United States desire the heartiest fellowship. With these views, I tender, etc., Mr. Blaine to Mr. Pitkin. JOHN R. G. PITKIN. No. 96.] DEPARTMENT OF STATE, SIR: I inclose copy of a letter from the Secretary of the National Board of Marine Underwriters of New York complaining of the heavy charges imposed on vessels putting into the port of Buenos Ayres in distress. You will investigate the complaint and, if you find it well grounded, endeavor to induce the Argentine Government to remedy it. I am, etc., [Inclosure in No. 96.] JAMES G. BLAINE. Mr. Smith to the Bureau of American Republics. THE NATIONAL BOARD OF MARINE UNDERWRITERS, BUREAU OF AMERICAN REPUBLICS, Department of State, Washington, D. C.: DEAR SIRS: I am directed to inform you that the question of heavy charges incurred by vessels putting into the ports of Buenos Ayres and Montevideo in distress has of late attracted the serious attention of underwriters and others interested in marine insurance in this country. As any governmental action tending towards the abolishment, or even the modification, of the objectionable charges would encourage commercial relations between the merchants of this and the Argentine and Uruguayan Republics, and, as we are not fully aware of the express objects of your Bureau, we shall feel obliged if you will kindly furnish us with the information as to whether or not matters of this nature come under your jurisdiction. Yours, truly, J. RAYMOND SMITH, Secretary. No. 100.] Mr. Pitkin to Mr. Blaine. LEGATION OF THE UNITED STATES, Buenos Ayres, February 23, 1891. (Received April 10.) SIR: I cabled you on the night of the 20th instant in effect that the condition of affairs was critical; that there was expectation of a revolution; that a state of siege was declared by the President's proclamation; and that an attempt had been made to assassinate Prime Minister Roca. The proclamation and an account of the attempted assassination are inclosed. The state of siege was by later decree suspended during Sunday, the 22d instant, in order that municipal elections might then take place at this capital. Two journals at this capital, La Defensa del Pueblo and El Argentino, were, on the 21st instant, forbidden further issue, and others, it is expected, will be subjected to the same rigor. I called promptly on General and ex-President Roca, now minister of the interior, to congratulate him upon his escape on the 19th instant. This attention was not only appreciated by him, but seemed especially commended both by the action of the Argentine Congress in adjourning for three days in tribute to the memory of the slain Lincoln and by the fact of a large procession of Argentine citizens passing with bared heads under our legation flag soon after tidings arrived of President Garfield's death. This latter incident was during General Roca's administrative term, who referred feelingly to both victims during my interview. It is impossible to forecast how soon and by what expedients tranquillity may be assured. I have, etc., JOHN R. G. PITKIN. [Inclosure 1 in No. 100.-From the Buenos Ayres Standard of February 21, 1891.] Proclamation declaring a state of siege. As was anticipated, in view of the recent turn of events, the following decree was issued last evening by the Government, proclaiming the city of Buenos Ayres under a state of siege: "BUENOS AYRES, February 20, 1891. "Whereas the capital of the Republic is now passing through a period of excitement and of alarm which injuriously affects both social interests and the national credit; "Whereas various manifestations have already taken place, and the situation may be aggravated unless the measures authorized by the constitution for forestalling and repressing acts likely to cause profound confusion in the community be adopted; "Whereas it is still more necessary to proceed in this manner because the nation has to surmount financial difficulties which can not be conquered unless public order and the action of the public authorities be put upon a firm basis; "Whereas this dangerous state of things constitutes precisely the case of internal commotion referred to in Article 23 of the national constitution, in which the exercise of the constitution and of the authority thereby created may be considered in danger; "Whereas the executive is bound to watch over the public peace and to repress all excesses to which the excitement of evil passions may give rise; "For all these reasons and in the face of the dastardly attack that took place yesterday evening on the person of the minister of the interior, the President of the Republic considers and decrees: |
