839.51/2252a
The Secretary of State to the Secretary of the Navy (Denby)
Sir: With reference to previous correspondence in regard to the proposed issue of certificates of indebtedness by the Dominican Government, I have the honor to inform you that this Department has decided, after a careful study of the matter, to give its authorization to an issue of $500,000 of six-months certificates of indebtedness. It may also be understood that the Department of State will, at the proper time, give its sanction to a bond issue sufficient to retire these certificates of indebtedness at maturity if such bond issue proves to be necessary for this purpose.
This authorization is given with the understanding that the funds derived from the sale of these certificates are urgently needed to place the Military Government in a position where it can meet its current expenses and continue work upon the main highway connecting the northern and southern portions of the Island, and also upon the understanding that no further borrowing is contemplated by the Dominican Government for the purpose of meeting current budget expenditures. It is hoped, therefore, that the Military Government will henceforth keep its current expenditures within its current revenues.
It should be clearly understood by the Military Government that the Department of State in authorizing this issue of certificates of indebtedness does not commit itself to any long term bond issue, except for such amount as may be necessary to retire these certificates at maturity and in the event that such bond issue is absolutely necessary for the retirement of the certificates. Pending the consideration of a possible bond issue by the Military Government, that Government should make no commitments whatever which cannot be met out of its current revenues or out of the proceeds of the present issue of certificates of indebtedness.
I have [etc.]
Under Secretary