File No. 639.003/48
The Acting Secretary of State to the Secretary of the Navy ( Daniels)
Sir: I have received your letter of November 23,1 forwarding a letter from the Military Governor of Santo Domingo relative to a change in the revenue laws of Santo Domingo. Pursuant to the request of the Military Governor, consideration of the matter involved was expedited, but I regret to say that owing to a clerical error this reply has been greatly delayed.
This Department is unable to give its opinion regarding the propriety of the proposed change in the revenue laws without additional information from the Military Governor of Santo Domingo on the following points:
- 1.
- The exact figures concerning the present yield of the customs revenues of the Dominican Republic and the increase in yield by reason of the proposed change.
- 2.
- Demonstration by the Dominican Executive in accordance with Article 3 of the convention of 1907 between the United States and Santo Domingo that the total net customs receipts, “on the basis of exportations and importations to the like amount and the like character during the two years preceding,” would at the proposed new rates of duties “have been for each of such years in excess of the sum of $2,000,000 United States gold.”
- 3.
- Whether it is the intention of the Military Governor to pay under paragraph 4 of the proposed Executive order all the revenue obtained from the reclassified taxes to the Dominican Government directly for current expenses, without reference to the provisions of Article 1 of the treaty of 1907, specifying the purposes for which customs revenue may be applied.
It should be observed in this connection that it would not appear possible for the Dominican Government, under Article 1 of the treaty of 1907 to change the classification of a tax from internal revenue to customs revenue, and to apply it in the same manner as internal revenue is now applied. The application of customs revenue is governed by the provisions of Article 1 of the treaty of 1907. In addition it would appear from the proviso in said Article 1 that in case the total customs revenue exceeds $3,000,000 in any year, half the surplus above $3,000,000 must be applied to the sinking fund for the redemption of bonds. This Government can not give its approval to any change in the customs laws which will not make provision for observance of this stipulation as to the sinking fund.
In connection with this question of application of customs revenue, reference is made to paragraph 6 of the letter of November 6 from the Military Governor of Santo Domingo.
I have [etc.]