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influenced by the desire to avoid a dangerous precedent. Martial law is often declared in the Spanish-American republics during the time of peace, as at Bluefields, for political purposes. If these military courts are authorized to demand the presence of our consular officers as witnesses there is no limit to the possibility of abuse resulting therefrom, as no restriction will be placed by them upon the information they will ask for, and the privileged consular information will thus be accessible to them. In the case of Mr. Clancy it was doubly dangerous, because, not understanding Spanish, he would have no means of knowing if his evidence was correctly translated. Instances have occurred recently at Bluefields where the hired government translator tried to have recorded what the foreign witness had not stated, but, the witness understanding Spanish, he was promptly corrected and reprimanded by the witness. The matter having been practically closed, and no demand made upon me for consular evidence after my arrival at Bluefields, the precedent is now established that before courts-martial in Central America ministers and consular officers need not testify—a position which I respectfully suggest may be of importance hereafter. Had I received your No. 217, dated April 17, in time, I should, of course, have strictly obeyed the instruction."

Mr. Merry, min. to Nicaragua, to Mr. Hay, Sec. of State, May 9, 1899,

For. Rel. 1899, 583.

5. TAXATION.

(1) LIABILITIES AND EXEMPTIONS.

$715.

With reference to a complaint that the consul of the Elector of Hesse at New York had been enrolled in a military company, and had been fined by a court-martial for nonattendance upon the company's parades, the Department of State said that the case was one that belonged primarily to the courts of law, which had, when resorted to in such cases, always decided, according to the principle laid down in the law of nations, and embodied in treaties, that “all persons recognized in the consular character by the President's exequatur, who are not citizens of the United States, are exempted from all public service, and from all taxes, imposts, and contributions except such as they may have to pay on their property, or in consequence of their engaging in commercial pursuits, they remaining in all cases amenable to the laws of the country."

Mr. Forsyth, Sec. of State, to Mr. Faber, Feb. 3, 1840, 30 MS. Dom. Let.

465. As to Art. V. of the consular convention with New Granada of 1850, see

Mr. ('ridler. Third Assist. Sec. of State, to Mr. McNally, May 13, 1899, No. 34, 167, MS. Inst. Consuls, 272.

“ If Bremen consuls are exempted from taxation in the United States, it is through the courtesy of the authorities of the several States in which these officers are situated, and not from any stipulation in the existing treaty between the United States and Bremen, of which only can this Department take cognizance."

Mr. Appleton, Assist. Sec. of State, to Mr. Diller, consul at Bremen,

March 3, 1859, 26 MS. Desp. to Consuls, 508.
See, also, Mr. F. W. Seward, Assist. Sec. of State, to Mr. Doering, vice-

consul at Oldenburg, May 29, 1861, 29 MS. Desp. to Consuls, 523.

With reference to a complaint of the Russian minister that the Russian consul-general at New York had been called upon to pay the Federal income tax, Mr. Seward wrote the Secretary of the Treasury that it was desirable that the law on the subject should receive such a construction as to exempt foreign consuls " from any such tax which may not be chargeable upon income derived from property in the United States or from business other than that of an official character.” If the law would not admit of such a construction, Mr. Seward suggested that it should be modified, and he added that the Department of State was not aware that the income of any United States consul abroad, derived from official sources, was taxable by the governments of the countries where they resided.

Mr. Seward, Sec. of State, to Mr. Chase, Sept. 23, 1863, 62 MS. Dom.

Let. 9. " Whatever we may say of the right of a government to tax the incomes

of persons residing within its borders as consuls from foreign governments, the practice of late years of our own government, and it is believed of the British government, has been not to insist on such a tax. Therefore, whatever may be said on the abstract question of the right of the British government to tax your income, you may with good reason claim exemption from such tax in the present case on the ground of international comity and reciprocal favor.” (Mr. Adee, Second Assist. Sec. of State, to Mr. Bonham, consul-general at Calcutta, No. 20, April 5, 1887, 120 MS. Inst. Consuls, 677.)

“The general principle is that a foreign consular officer is subject to no charge in the country of residence, by reason of his official capacity or acts; but that if such officer contracts private interests there, such as engaging in business, acquiring taxable property, and the like, he is subject to the same rules as a private individual. I know of no [United States] internal-revenue tax which could affect the official character, functions, or emoluments of a foreign consul.” By Article III. of the consular convention with Italy of 1878, consular officers, citizens of the state by which they are appointed, are

Mr. Frelinghuysen, Sec. of State, to Mr. de Struve, Russian min., April 21,

1884, MS. Notes to Russia, VII. 449. See, as to consular exemptions from taxation, under particular conven

tions, Consular Regulations of the United States (1896), $ 83, p. 32.

exempt from all national, state or municipal taxes, imposed upon persons either in the nature of capitation tax or in respect to their property unless such taxes become due on account of the possession of real estate or for interest on capital invested in the state in which they reside. If they are engaged in trade, manufactures or commerce, they shall not enjoy such exemption but shall be obliged to pay the same taxes as are paid by other foreigners under similar circumstances."

By Article X. of the treaty between the United States and Portugal of 1840, each party engages to give to consuls appointed by the other most-favored nation treatment. Hence it was advised that the Portuguese vice-consul at New York, whose residence was in New Jersey, was entitled to exemption in the latter State from (1) a capitation or poll tax, and (2) a tax on his personal property, unless it became due for interest on capital invested in the State of his residence, New Jersey.

Mr. Day, Assist, Sec. of State, to the governor of New Jersey, Jan. 31,

1898, 225 MS. Dom. Let. 89.

With reference to a note of the minister of Austria-Hungary of January 26, 1898, concerning the Austrian income tax law which took effect on the first of the year, and the treaty between the two countries of July 11, 1870, the Department of State said: “ The interpretation placed by this Department on the treaty corresponds with that suggested in your note, namely, that where consuls are citizens of the country which has appointed them and are owners of real estate in the country to which they are accredited, they are subject to taxation on their real and personal property, which would include the tax on their houses and on their incomes derived from mortgages on property situated in the country where they exercise their consular functions. So far as this Department is informed, the practice in the various States composing the United States is in harmony with this interpretation of the treaty."

Mr. Sherman, Sec. of State, to Mr. Hengelmüller, Austro-Hungarian min.,

No. 212, Feb. 2, 1898, MS. Notes to Aust. Leg. IX, 352.
See, as to treaty stipulations, Consular Regulations of the U. S. (1896),

$ 83, p. 32.

By Article III. of the consular convention between the United States and Germany, of December 11, 1871, it is provided that under no circumstances shall the official income" of consular officers be subject to any tax.

By the German law relating to insurance against disability and old age, all persons working in a dependent position, on regular wages that do not exceed a certain amount per annum, are required to insure themselves against certain liabilities, the insurance to be effected by means of stamps pasted on cards, one half the cost of the stamps being paid by the employer and the other half by the employee. The American consuls in Germany submitted themselves to the law, in respect of their German employees, it being for the advantage of the latter. In 1901, however, a question was raised by the United States consul at Breslau in respect of two German subjects employed by him, one as secretary and the other as messenger, the consul claiming that neither he nor they could be obliged to pay the tax. The German authorities, on the other hand, considered it doubtful if the consul was freed by the treaty from the obligation to contribute toward the payment for the stamps, and besides intimated that, if the two employees were to be considered as American officials, they were not entitled to any pension under the law. The foreign office therefore requested the American embassy to use its good offices in the case to the end that the two German subjects in question might not be deprived of advantages which would accrue to them if they were in other employ. It seems that there had always been uncertainties as to the exact meaning of Article III. of the convention of 1871, in so far as it related to consular officers and employees of German nationality, but that the general practice had been to exempt them from taxation. This, however, had not been done in pursuance of any formal decision, and, if the question was made one of principle, it seemed not improbable that the German employees of the American consulates would be held to be liable to local taxation.

The Department of State held that under the provisions of Article III. the consul at Breslau, not being a German subject, was exempt from the payment of the tax in question, but that this exemption could not be claimed for the secretary and messenger of the consulate who were German subjects; and that, as the members of the embassy at Berlin and the United States consular officers generally throughout the German Empire had voluntarily submitted themselves and their employees to the provisions of the insurance law, the consul at Breslau should be advised to follow the same course, as it was to the advantage of his employees. It was observed that he could undoubtedly so arrange that they should bear the payment of the quota of the contribution which he was asked to pay.

Mr. Hill, Act. Sec. of State, to Mr. White, ambass. to Germany, Apr. 30,

1901, For. Rel. 1901, 173, acknowledging despatch No. 1604 of Mr. Jackson, chargé, to Nr. Hay, Sec. of State, Apr. 13, 1901, For, Rel. 1901, 172.

(2) Customs DUTIES.

$ 716.

It is not usual to allow to consuls the right of free entry for goods sent to them for their personal use; though in some countries this privilege is granted as a matter of courtesy.

Mr. Bayard, Sec. of State, to Mr. Cox, Nov. 6, 1885, MS. Inst. Turkey, IV.

305,

Article II. of the treaty between the United States and AustriaHungary of 1870, in exempting consuls from all direct and personal taxation, refers to all kinds of assessments, forced loans, income and capitation taxes, and other charges levied by the general or local government upon the individual, distinct from property taxes or duties by reason of transactions in which he may engage in the place of his residence. It does not refer to customs duties upon importations collected by the general government, nor to municipal duties on articles of consumption, commonly called octroi duties, nor to excise taxes, stamp charges, and the like.

Mr. Bayard, Sec. of State, to Mr. Lee, chargé, No. 16, Nov. 6, 1885, MS.

Inst. Aust.-Hungary, III. 371.
Although exemption from stamp taxes on paper used officially by consuls

in Mexico is " not expressly conceded by the Mexican consular law,"
it “is rational to expect it, and it is apparently sanctioned by usage."
(Mr. Blaine, Sec. of State, to Mr. Ryan, min. to Mexico, No. 362,
Oct. 8, 1890, MS. Inst. Mex. XXII, 641.)

Article III. of the treaty between the United States and the German Empire of 1871 does not exempt consuls from payment of customs duties on importations.

Mr. Rives, Assist. Sec. of State, to Mr. Smith, No. 100, Jan, 3, 1889, 128

MS. Inst. Consuls, 214.

By Article XVII. of the treaty between the United States and Tunis of 1797, each party is “at liberty to establish a consul in the dependencies of the other; ” and this consul is entitled to “import for his own use all his provisions and furniture without paying any duty." In 1895 the Tunisan minister of foreign affairs, who was also the French minister resident, notified the vice-consul of the United States that the government of Tunis intended to suppress all privileges, honors, and prerogatives granted to the consuls by treaties, except in the case of salaried officers. As the vice-consul was an unsalaried officer, the United States, March 12, 1895, declared that in conformity with the rule generally observed, which made no discrimination between salaried and unsalaried consular officers of foreign states, it could not acquiesce in any differential treatment of its consular officers abroad “ based upon a mere detail of financial relation between this government and its agent, which in no manner

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