[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
Santo Domingo
,
13 March,
1919
.