839.51/2166

The Acting Secretary of State to the Secretary of the Navy (Daniels)

Sir: I have the honor to acknowledge the receipt of your letter of December 21, 1920, forwarding a communication from the Military Governor of Santo Domingo, requesting the consent of the United [Page 855] States Government to increase the public debt of the Dominican Republic in the amount of ten million dollars, pursuant to the provisions of the American–Dominican Convention of 1907 providing for the assistance of the United States in the collection and application of the customs revenues of the Dominican Republic, under date of February 8, 1907. I also note that the Navy Department recommends the approval of this request as it is considered that the public works which have been started by the Military Government are essential to the commercial and educational development of the country and should be continued as projected in the interests of the people of the Dominican Republic, irrespective of any arrangements which may be made as to the future administration of the Government of that Republic.

In reply, I have the honor to state that this Department regrets that it is unable to approve an increase of the public debt of the Dominican Republic of ten million dollars at this time, in view of the fact that by virtue of the Proclamation issued on December 23rd last,32 the Government of the United States has committed itself to initiate at once the preliminary steps looking toward a rapid withdrawal of its control in the Dominican Republic, to which end a Commission is to be appointed to revise the laws and Constitution of that country, and the Department must hesitate therefore to take any steps which might tend to impair the good faith of that Proclamation, and so militate against the success of this Commission.

The Department of State, however, after discussing this matter with the Financial Representative of the Military Governor has observed that a distinction may be taken between completing Public Works already begun and inaugurating new enterprises of this sort in the Dominican Republic, and considers it highly desirable to carry out Public Works of the former category for which a new bond issue of five million dollars would suffice, this proposed issue to be amortized in 1925, and involving no change in the American-Dominican Convention of 1907, nor in the life of the Receivership of the Dominican Republic, since the payments pledged would not be deducted by the General Receiver of Customs but would be paid directly from the Treasury of the Dominican Government to the fiscal agent of the loan.

Before arriving at any final decision, however, in the above connection, and since the Commission is shortly to meet in Santo Domingo, this Department deems it expedient that the question of the advisability of a new five million dollar bond issue for the completion of Public Works already begun in the Dominican Republic, should be placed before the Commission by the Military Governor [Page 856] for discussion with it, to the end that the Commission may concur in the advisability of the loan.

I have the honor, therefore, to request that the Military Governor be informed by the Navy Department of the sense of the above, and that he should advise this Department through the Navy Department of the result of his endeavors in this relation.

I have [etc.]

Norman H. Davis
  1. See telegram of Dec. 4, 1920, to the Minister in the Dominican Republic, ibid., 1920, vol. ii, p. 145.