The Birmingham age-herald., 1911-02-01
Potash Controversy Has En-
 tered Diplomatic Field
DEFENSE OF TAX ON POTASH
German Government Explains Its Ac- ton Fly Saying That Potnsh In- dustry Must Be Protected
 From Exhaustion

Washington, January 31,-The action of the German government in imposing a penalty tax on the production of potash after having been for many months a sub
 jeet of examination and exchange of
 briefs and notes between the American contractors and employees of the German
 potash syndicate, may be said to have passed into the realm of diplomacy today,
 when Count Bernstorff, the German ann
 bassador, presented to Secretary Knox an
 answer by his government to the secre-
 tarys inquiry as to the reason of the
 action complained of.
 The German answer defends the action
 of the German government in imposing
 the penalty tax as a measure necessary to
 conserve the valuable potash deposits of
 the empire and protect them from speedy
 exhaustion, such as might be expected to follow ruinCus reduction in the price
 of potash resulting from unregulated com petition between these syndicates and the
 Independent potash miners.
 Because of the importance of the matter Secretary Knox is conducting the negotia- tions himself, and there are indications
 that they will not lag In view of the
 length of the German answer to this in- | quiry the secretary was not able to read l it in detail before he was called to the regular Tuesday cabinet meeting, but | fl n the ambassadors explanation he was
 aol to secure af- outline of the German sf -ention.
 his Is believed to be based on the l5ta ory that the imposition of the tax Ii potash production is regarded by Ger any as purely internal affair and that
 ] matter of fact it Is not an export
 ix It is also asserted that the tax is
 Aot chargeable against the American ! purchaser, but should be paid by the Ger
 man mine owners. Furthermore, 1t Is 1 charged that the so-cafled independent" | potash producers who made the contracts i with the Americans for the delivery of
 potash in 1909 did with full knowledge | tEat the German government had for some time been contemplating, and had
 practically decided upon the imposition 1 of tax on the production of potash in | order to conserve the limited supply in l the mines.
 | Some of these contentious are in direct
 conflict with those made to the state | department by the American contractors | who claim to have been wronged by the | action of the German government. Hence l 1t will be necessary for the department
 to make a very careful investigation of | the facts before determining upon line l or dctlOn.
 Some idea of the bitterness of the | felling that has been aroused by the l action of the German government in | levying this potash tax may be gath cred from the fact that some of the American contractors who were in con- | ference in this city last week have | announced their intention of requesting | the department of justice to begin ac- | ton to punish the American cameo | tions of the German potash trust or syndicate under the criminal sections
 of the tariff act of 1894.
 They assert that section 23 of this
 act is still in force, notwithstanding | subsequent tariff legislation. This sec | ton was designed to prevent the im-
 portation into the United States of commodities produced by foreign
 trusts and provides for fine of from | S100 to S5000 and Imprisonment from three to twelve months on any per | sons engaged in importing any article
 as the result of combination agree | ment or trust intended to operate in restraint oe lawful trade or to increas SC the market price in the United States | of any article of import.
 | Not m ch importance Is attached to | this threat by the German Kali syndl- cate, as represented in the United | States as 1t is felt that the jurisdic- tion of the United States does not run | beyond the seas. and there Is no evI-
 dence of the existence of any potash | trust in this country.