839.51/2024

The Consul at Santo Domingo (Edwards), Temporarily in Charge of the Legation in the Dominican, Republic, to the Acting Secretary of State

No. 438

Sir: As of interest to the Department, and with reference to your telegram of March 13—6 p.m., and my reply of March 18—3 p.m.,28 I have the honor to enclose herewith copies of Executive Order No. 272, issued by the Military Government of Santo Domingo on March 13, 1919, providing for additional payments to be made to the amortization fund for the redemption of the 1918 issue of bonds for the payment of the awards of the Dominican Claims Commission of 1917.29

I have [etc.]

Clement S. Edwards
[Enclosure]

Executive Order No. 272, March 13, 1919, of the Military Government of Santo Domingo, Providing for Additional Funds for Amortization of the 1918 Bonds

Whereas, Executive Order No. 193 of the Military Government of Santo Domingo, issued at Washington, D.C., U.S.A., by authority of the Government of the United States, under date of August 2, [Page 149] 1918,30 provides for the payment of the awards to be made by the Dominican Claims Commission of 1917, by means of bonds of the Dominican Republic, dated January 1, 1918, and payable at par on or before January 1, 1938, and in paragraph 8 specifically guarantees and provides for the redemption of said bonds as follows:

“There is hereby pledged with the consent of the Government of the United States, from the customs revenues of the Dominican Republic, such amount as may be required for the payment of the stated interest of said bonds; and, to the amortization fund for the redemption and payment of said bonds on the redemption dates hereinbefore provided, the further sum per annum, to be deposited in equal monthly installments, beginning January 1, 1918, of an amount equal to one-twentieth of the total amount of the bond issue. The sums pledged in this paragraph shall constitute an additional charge upon all customs revenues of the Republic collected in accordance with the Convention of February 8, 1907, between the United States of America and the Dominican Republic, after their application to the first four objects designated in Article I of that Convention, and before any payment is made to the Dominican Republic. Additional payments for account of the amortization fund herein provided may be made at any time by the Dominican Government in its discretion.”

And

Whereas, certain bankers and others who deal in such securities have expressed the opinion that there is a possibility of the termination of the American–Dominican Convention of 1907 before the retirement of all of the bonds of 1908 issued under the provisions of Executive Order No. 193 above mentioned, and the technical point thus raised has in fact adversely affected the market value of said bonds; and

Whereas, the possibility of the termination of the said American-Dominican Convention of 1907 before the redemption of all of the bonds of the issue of 1918 is wholly dependent upon the amount of customs revenues collected and consequently the rate at which additional amounts are applied to the sinking fund for the redemption of the bonds first issued in 1908 under said Convention, in accordance with the specific provision in Article I of said Convention reading as follows:

Provided, that in case the customs revenues collected by the General Receiver shall in any year exceed the sum of $3,000,000.00, one-half of the surplus above such sum of $3,000,000.00 shall be applied to the sinking fund for the redemption of bonds”; and

Whereas, in view of this contingency it is advisable and necessary to provide for additional payments for account of the amortization fund for the redemption of the bonds of January 1, 1918, so that the [Page 150] market value of such bonds may be maintained at a parity with the bonds of 1908:

Now, therefore, by virtue of the powers vested in the Military Government of Santo Domingo, there is hereby pledged from the customs revenues of the Dominican Republic, in addition to the amount heretofore pledged in paragraph 8 of Executive Order No. 193 above mentioned, a sum equal to sixty per cent of the one-half of the surplus above $3,000,000.00 of customs revenues from imports and exports collected by the General Receiver of Dominican Customs in any calendar year which would otherwise accrue to the Dominican Government, and said additional amounts shall be applied to the purchase and retirement of the bonds of the Dominican Republic dated January 1, 1918, in the following manner:

The total of the additional amounts pledged in the preceding paragraph shall be applied, so far as practicable, to the purchase of said bonds, without distinction as to series or denominations, at prices not in excess of par value. Beginning February 1, 1920, of the total amount available on February 1st of each year, one-third shall be applied to such purchases, and of the remainder available on March 1st of each year one-half shall be so applied to such purchases, and the total amount remaining available on April 1st of each year shall be so applied to such purchases. The Secretaria de Estado de Hacienda y Comercio of the Dominican Government, by means of notices published at least once each week during the months of December, January, February and March of each year beginning with December 1919, shall offer to purchase said bonds within the limits and on the dates herein specified; such notices shall be published in the Official Gazette of the Dominican Government, in one of the daily newspapers of the city of Santo Domingo, and in one of the daily newspapers of the city of New York. Proposals to sell said bonds shall be submitted in triplicate, on the forms prescribed by the Secretaria de Estado de Hacienda y Comercio, and shall be delivered in sealed envelopes to that office before ten o’clock a.m., of the dates specified for such purchases, and no proposal submitted in any other form or manner shall be considered. Such proposals shall be opened in the Secretaria de Estado de Hacienda y Comercio at ten o’clock a.m., on the dates specified for such purchases unless such dates should fall on Sundays or legal holidays in which event the opening shall take place on the day following, and the lowest proposals shall be accepted up to the amount available on that date for such purchase; if necessary to decide between two or more equal proposals the acceptance shall be decided by lot. Any person or firm who has submitted a proposal shall be entitled to be present either in person or by representative at the opening of the proposals. All bonds so [Page 151] purchased, together with the interest coupons corresponding thereto, shall be duly registered as retired in the records of the Contaduria General de Hacienda and immediately cancelled and destroyed. Any part of the additional amounts herein pledged which, for any reason, is not utilized in the purchase of bonds as herein provided shall be applied to the amortization fund for the redemption and payment of said bonds in accordance with the provisions of Executive Order No. 193 hereinbefore referred to.

The General Receiver of Dominican Customs is hereby authorized to make monthly segregations, commencing as of date January 1, 1919, from the customs receipts of the Dominican Republic, of the proportional amounts representing the sixty per cent of the one-half of the surplus above $3,000,000 of customs revenues hereinbefore pledged and, on or before January 10th of each year to deposit the total of the sums so segregated during the preceding year with the Designated Depositary for the Dominican Government in the special account entitled “Dominican Republic 5% Bond Issue 1918”; and such segregations and deposits shall be regularly continued by the General Receiver of Dominican Customs until all of the bonds issued under authority of Executive Order No. 193 shall have been redeemed and paid.

The good faith of the Dominican Republic is hereby irrevocably pledged to the faithfuP compliance with the foregoing provisions, and this Order shall not be revoked or impaired by any law or decree which the Government of the Dominican Republic or any authority thereof may subsequently enact or issue, or by any interpretation thereof.

Thomas Snowden

  1. Neither printed.
  2. See also p. 103.
  3. Foreign Relations, 1918, p. 377.