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Acre territory, where they could not induce either soldiers or customs officers to go,

the reports from the few survivors of early expeditions thither having been tragic in the extreme. Such statements are confirmed by a notice, which I herewith send, from the Brazilian Review of April 29. The Brazilian expedition under Dr. Cruls, recently sent to determine the boundary lines between this country and Bolivia, lost 12 men, despite the utmost care.

There is an area of the Acre where more favorable conditions exist than those herein described, but just where the land rises the rubber growth decreases.

Large rubber companies can doubtless derive great profit from their investments, but it will be to their advantage to employ acclimated natives in this section of Brazil rather than laborers imported from northern countries.

In view of the facts given and of other dangers that confront the foreigner in this remote region, I earnestly warn our countrymen against emigration to the Upper Amazon country. I have, etc.,


Extract from the Brazilian Review, of Rio de Janeiro.

APRIL 29, 1902. River Acre.

Reports in regard to the sanitary conditions of this river are very unfavorable. Beriberi and fevers prevail throughout the country. The steamer Brazil had on board 38 Bolivians, mostly officers of the army, who were suffering from beriberi, and were consequently leaving the country. One of these passengers, the commander of a battalion of infantry, died on board and was buried on the bank of the Purus.



Mr. Bryan to Mr. Hay. No. 434.]


Petropolis, July 11, 1902. Sir: Referring to your telegraphic instruction a of May 24, in regard to permission to United States consuls to act for Cuba, and your unnum. bered instruction of May 20, in regard to notifying this Government of the inauguration of an independent government in Cuba, I have the honor to report that the permission asked has been granted.

It will be noted that the Brazilian Government suggests that a direct communication is also expected from Cuba.

Copies of my notes to the foreign office and of the reply just received thereto are inclosed.

According to the instructions sent by you, I have notified the consuls through the consulate.general. I have, etc.,


a Printed, ante, page 6.
o Printed, ante, page 6.

(Inclosure 1.]
Mr. Bryan to Dr. Magalhaes.

Petropolis, May 27, 1902. MR. MINISTER: Pursuant to instructions from my Government, I have the honor to ask, through your excellency, the kind permission of the Government of Brazil that until consuls shall have been appointed by the Government of Cuba the consular officers of the United States of America may use their good offices within the jurisdiction of Brazil in representation of the interests of Cuba and its citizens.

His Excellency Tomas Estrada Palma, President of the Cuban Republic, has asked that this permission be requested. I improve the opportunity, etc.,


[Inclosure 2.]

Mr. Bryan to Dr. Magalhaes.

Petropolis, Juue 28, 1902. MR. MINISTER: Pursuant to instructions received from the President of the United States of America through the Secretary of State, I have the honor to convey to the Government of Brazil, through your excellency as minister for foreign affairs, that the military occupation of the island of Cuba by the United States of America ceased on the 20th day of May, 1902, and that an independent government, republican in form, has been inaugurated there under the presidency of His Excellency Señor Don Tomas Estrada Palma. I improve this opportunity, etc.,


[Inclosure 3.]
Dr. Magalhaes to Mr. Bryan.


Rio de Janeiro, July 9, 1902. I have received the two notes which Mr. Charles Page Bryan, envoy extraordinary and minister plenipotentiary of the United States of America, addressed to me on the 27th of May and the 28th of June, requesting, at the desire of the Cuban Government, permission for the consular officers of the United States to exercise provisionally their good offices in behalf of that Republic and its citizens; and informing me that the military occupation of the island by the American Government ceased on the 20th of the month just past (May), an independent and republican government having been organized under the presidency of Señor Estrada Palma.

The Government of Cuba has not yet communicated to that of Brazil the important events referred to by Mr. Bryan, and that Government has therefore not been recognized in the usual form, but the President of the Republic, assured that this action will not be delayed, gives with pleasure the permission requested. I have, etc.,



Mr. Hill to Mr. Bryan.



Washington, July 30, 1902. (Mr. Hill states that it is represented that the Brazilian Government is proceeding, without judicial process, to enforce the payment of inheritance tax of Baron Thomsen at Rio Grande do Sul by seizure of property of the copartnership of Thomsen & Co. Mr. Bryan is instructed to invoke good offices of the Brazilian Government with a view to assure due legal process and judicial hearing and decision of question of amount of inheritance tax justly due, payment of which Baron Thomsen's son represents his willingness to make.)

Mr. Dawson to Mr. Tay.



Petropolis, July 31, 1902. (Mr. Dawson reports that vigorous steps have been taken in the Thomsen inheritance tax case by Minister Bryan.)

Mr. Bryan to Mr. Hay.

No. 438.]


Petropolis, August 4, 1902. SIR: I have the honor to acknowledge the receipt of your telegram of July 30, and to confirm Mr. Dawson's replya of July 31 thereto; and to state that I had received on July 19, through the consular agent, a statement of the difficulty from Mr. E. H. Müller, an American citizen resident in Rio Grande do Sul, and the managing partner of Thomsen & Co. A copy is herewith inclosed. At the same time the legal statement of Mr. Müller's Brazilian counsel was received.

It was clear to me that the attachment would greatly injure an important American business enterprise and, after carefully considering the legal question involved, that the firm of Thomsen & Co. would have a right to ask the Brazilian Government for damages through the diplomatic channel should it be enforced, accordingly I determined to take personal and unofficial action. I received the following telegram from Consular Agent Vereker:

Rio GRANDE, July 25, 1902. With reference to my letter of the 12th instant, Edward Müller has been summoned to pay the amount claimed by the Government under penalty of summary attachment, which is now imminent. Legal measures have been exhausted, and he represents the urgent necessity of intervention to avoid vexatious injury.

VEREKER, Consular Agent. and the following cablegram from Mr. Thomsen's lawyer in New York:

NEW YORK, July 26, 1902. Retained by Thomsen, American citizen, in inheritance tax matter. Believe proceedings illegal and threatened attachment oppressive and unconstitutional. Desire same prevented if possible.

EUGENE ROBINSON. Knowing that the attachment was in the hands of an executive officer of the State of Rio Grande for enforcement, and being confident of the friendliness of the eminent president of Rio Grande, Dr. Borges

a Printed, ante.

Medeiros, to American interests as shown during my visit there and repeatedly since, I ventured to send him the following telegram.

PETROPOLIS, July 28. I ask your excellency's intercession with the minister of justice to delay the attachment against Thomsen & Co. until I shall have an opportunity to investigate the


To this was received the following favorable response:

PORTO ALEGRE, August 1. Complying with your wishes, I have to advise you that I have taken measures in the direction of sustaining the inventory of Thomsen & Co. Cordial greetings.

BORGES MEDEIROS. On receipt of your telegram of July 30, Mr. Dawson went to Rio and called upon the minister for foreign affairs, asking for his good offices with the State authorities of Rio Grande. Dr. Magalhaes stated that the executive had no power to intervene with the administration of justice by the courts, and was reluctant to promise to take any action. At his suggestion Mr. Dawson left with the director-g ral the following memorandum note:

RIO DE JANEIRO, August 1, 1902. Viscount CABO FRIO,

Foreign Office, Rio de Janeiro. DEAR SIR: I have just seen Dr. Magalhaes about the Thomsen penhora, according to your suggestion, and he has asked me to put our request in writing in the form of a note to you, so as to furnish a basis for telegraphing.

We ask respectfully that your department represent to the procurador especial de fazenda do estado do Rio Grande do Sul that his insisting upon an immediate penhora against Mr. Müller and the property under his charge will be unnecessary and unwise.

A penhora being a summary process, Mr. Müller will undoubtedly, after it is imposed, make a claim through our legation on the ground that he had no opportunity to have a court of law ascertain how much he and the firm he represents really owes on account of the inheritance tax of the former partner in the other firm.

A telegram to the procurador or his superior officers need not be in any sense an intervention. It would only be a request that he delay the matter of the penhora until it can be investigated, thus relieving the United States legation and your office of a tedious diplomatic claim.

This legation will insist that Mr. Müller promptly submit to the judgment of the Brazilian court, and will deeply appreciate anything Dr. Magalhaes may do to induce patience on the part of the procurador. Please accept my thanks, etc.,

THOMAS C. Dawson. On the following day I saw the minister myself, and he guardedly told me that he had sent a telegram in the line suggested.

I inclose herewith a copy of a letter I have just sent the consular agent at Rio Grande do Sul.

In the absence of further instructions from the Department I shall continue to take such action as may seem likely to secure protection of the interests of Thomsen & Co. against injury. I have, etc.,


[Inclosure 1.)
Mr. Müller to Mr. Vereker, consular agent.

Rio GRANDE DO SUL, July 12, 1902. DEAR SIR: Referring to our verbal conversation I now beg to hand you herewith a letter directed to the Hon. Charles Page Bryan, minister plenipotentiary of the United States of North America at Rio de Janeiro, which I request you to kindly forward with such comments as the case may warrant. I would state to you that the question involved is the following:

Baron C. de Thomsen, senior of the firm of Thomsen & Co., of this city and New York, died in New York in May, 1898. According to the laws of this State an inheritance tax of 11 per cent was to have been paid by the heirs to the State government on all funds and property which at the time of death belonged to the deceased in this country. The law further requires that whoever is authorized to liquidate the affairs of a deceased leaving property in this country is to hand in a statement of such account, showing clearly what property the deceased leaves here to the credit of his estate, so that the State can collect the tax of 11 per cent.

The affairs of the baron, whose interest in the firm of Thomsen & Co., as per contract, ceased on the 31st of December of the year of his decease, were liquidated by the then resident partner, Mr. Gustav Feddersen. As the law referred to had always been a dead letter, inasmuch as it had never been enforced, Mr. Feddersen undoubtedly was not aware of the existence of the same, liquidated the account of the baron and remitted the amount belonging to the heirs to the executors in New York, where the will of the baron was probated and the division of the estate made in conformity with the laws of the State of New York.

I will mention that the baron's account on the 31st December, 1898, showed a balance to the credit of the deceased of Rs. 152,308$650, consisting of Rs. 147,308$650 in actual cash and Rs. 5,000$000, nominal value of shares of the Companhia Hydraulica here. The baron possessed no real estate in Brazil and had no interest in any other business enterprise in Brazil.

On January 1, 1899, a new firm under the same name of Thomsen & Co., with branch in New York, was constituted here, the son of Baron de Thomsen, Mr. Hugo Adelberto Thomsen, and Mr. Gustav Feddersen being general partners, and the widowed daughter of Baron de Thomsen, Mrs. Pepita Schiller, special partner. Mr. G. Feddersen then left for Europe in May, 1899, leaving the firm in my charge, who had hitherto been an employee of the firm. On January 1, 1900, I was admitted as partner, as was also Mr. H. Joh's. Riedel, of New York.

I beg to say that Mr. H. A. Thomsen, hitherto a Brazilian, is now an American citizen; so is Mr. H. Joh's. Riedel, and so am I-the former two by naturalization and I by birth.

About the middle of last year I was notified by the government of this state to pay within five days the inheritance tax due to the government by the heirs of the late Baron de Thomsen, the government claiming that I was the legal representative of said heirs.

I naturally refused such payment, as I in no way whatever could be looked upon as the representative of the heirs of the late Baron de Thomsen. The law clearly states that such heirs should be personally subpoenaed to pay the taxes, which was impossible, the heirs being absent, and the government of this State was therefore bound to subpæna the heirs by diplomatic channels. In order, however, to save time I agreed to notify the heirs and acquaint them with the facts of the case; and they being perfectly willing to abide by the laws of this country and State, and in order to show such willingness they did not wait for a legal subpæna, but at once volunteered to send the statement of the baron's account in this country at the time of his decease, authorizing me to pay the tax of 11 per cent on Rs. 152,308$650, amount referred to above, and if absolutely necessary also the exorbitant fine of 14 per cent interest per month on the amount due, which fine according to law enters into force and is counted from one year after the death in case of nonpayment of the tax.

The government refuses to acknowledge the correctness of the statement as rendered and arbitrarily decides that the tax should be paid on the capital contributed by the baron when the last business contract was registered, which was done in the year 1894. The baron then declared his capital here to be Rs. 776,752$900, and upon this sum the government claims 11 per cent tax and 14 per cent per month interest from May, 1899, to the day of payment, or a total amount of Rs. 158,667$314! In case of nonpayment I am threatened with attachment proceedings!

The only heirs of the baron, namely, his two children, Mr. H. A. Thomsen and Mrs. Pepita Schiller, are interested in the firm of Thomsen & Co., the former as senior partner and the latter as special partner, and the government now threatens to attach funds belonging to the firm, in order to collect an inheritance tax on the estate of the late Baron de Thomsen.

I have employed the best legal advice, and am told that the government is acting arbitrarily against the constitution of this Republic as well as against the laws of this State. The letter inclosed herewith and addressed to the United States minister at Rio is inspired by my lawyers and clearly states all the legal points at issue. I send it in its original form and inclose a copy of this my letter to you, in case you

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