Bancroft Davis to J. C. B. Davis, October 13, 1874

No. 235. Mr. Davis to Mr. Fish.

Sir: I have the honor to inclose copies of correspondence with several Americans, respecting the imposition of an income-tax upon Americans residing within the limits of the German Empire.

The complaints come simultaneously from Frankfort-on-the-Main, from Hanover, and from Dresden.

I thought I should be justified, under these circumstances, in incurring the expense of consulting a competent lawyer concerning the laws imposing these taxes. I also inclose his report respecting Prussian laws, together with a translation and a comment upon it by Consul-General Kreismann. You will observe that a further communication is promised, respecting the laws of Saxony.

Our last treaty with Hanover (volume of treaties, page 454) made provision only (Article X) for the case of residence for business purposes. This treaty is understood to have been abrogated by the conquest of that country and its annexation to Prussia.

Our treaty with the Hanseatic Republics is broader, (volume of treaties, page 463, Article VIII.) Protection is to be afforded to transient citizens on the same terms which are usual or customary with natives or citizens. But it may be said that this treaty also was abrogated, as to Frankfort, by the conquest and annexation of the whole territories of that state to Prussia.

The treaty of 1828 with Prussia provides only for a commercial residence, (volume of treaties, page 724, Article VIII.)

In all cases which have come to the knowledge of the legation the tax has been imposed upon persons claiming to be American citizens, and residing temporarily within the German Empire, either for purposes of education or for some similar object.

The several questions would, therefore, appear to involve the application of similar principles, unless the status of a naturalized citizen may be deemed to be affected by one of the German naturalization treaties. Other similar cases will undoubtedly be presented for the decision of the legation.

I have a decided opinion upon these cases.

Assuming that the German government is acting in good faith, and under general laws applicable alike to its own citizens and to all foreigners, I think that it is due to its sovereignty to concede to it the right to determine, through its own officers and in its own courts, what residents and what property are to be taxed within its limits. Should this result in any case in a substantial miscarriage of justice, it will be for the Department of State, and not for this legation, to determine whether the injury is such as to justify political interference with the municipal regulations of the German governments; and I am free to say that it also seems to me that persons who live here year after year, enjoying the protection of the laws of this country, can have little cause of complaint if they are called upon to contribute to the support of those laws.

Yet I think that, as the question is likely to be wide-reaching, it is due to the Department to ask for instructions on the cases as they stand. If the Department differs from me, I shall be pleased to have it indicate the line of argument in which I am to present its views, and I need not add that I shall endeavor to fully carry out its instructions.

I have, &c.,