[Enclosure—Translation]33
The Dominican Acting Minister for Foreign
Affairs (
García
Mella
) to the American
Minister (
Schoenfeld
)
No. 131
Ciudad
Trujillo
, February 21, 1936.
Mr. Minister: I have the honor to refer to
the memorandum which on the 12th instant Your Excellency delivered
to me. It is stated [Page 437]
therein: that the Gaceta Oficial No. 4861
[4865] of January 1, 1936, published a
contract entered into between the Dominican Government and the
United States Products Company for the purpose of providing for the
construction in the Republic of three steel bridges over the rivers
Chavón, Sanate and Camú, respectively. The Minister refers in his
memorandum to the information transmitted to this Department of
State in June 1934 that the American Government considered that the
payment stipulated in another contract signed in 1934 established an
obligation against future revenues of the Republic and was,
consequently, in disagreement with the terms of article III of the
Convention of December 27, 1924; and that, in compliance with
instructions received from your Government, Your Excellency now
calls the attention of the Dominican Government to the same point,
considering that the contract made in October of last year and the
method of payment stipulated therein for the construction of the
three bridges constitute an increase in the public debt, and that
accordingly the matter should have been treated with the Government
of the United States to obtain its consent in accordance with the
terms of article III of the said Convention of 1924.
In this respect, the Dominican Foreign Office hastens to state to
Your Excellency that, in accordance with the text of article III of
the Convention (“until the Dominican Republic has paid the whole
amount of the bonds of the debt, its public debt shall not be
increased, etc., etc.”), what is forbidden, or rather, what is
limited, is the capacity of the Dominican Government to increase its
public debt, wherefore the Dominican Foreign Office deems it
convenient to fix from now and for always the extent of that
expression “public debt,” in accordance with article III of the
convention.
If by public debt is understood “the total of obligations which the
State has contracted with its creditors,” it becomes evident that
the contract which Your Excellency comments on gives no place for
any criticism. If, broadening the criterion of that definition, we
should establish that the “public debt is the total of obligations
contracted by the State, comprising all that the nation recognizes
it owes, whatever may be the form and the duration of the obligation
signed or the conditions of reimbursement, whether in capital or in
interest,” then and in spite of such general terms neither could
there be comprised in them “the current debts of the State on
account of the performance of public services, the maintenance of
sea and land forces, payment of public employees, execution of
public works, purchase of supplies, etc., etc.,” because all this is
inherent in the life of the State, in its operation as such and in
the condition of the existence of the Republic; wherefore it is
necessary to agree that, in accordance with article III of the
convention, the expression public debt includes “the obligations
expressly stipulated with any creditor.”
[Page 438]
It is easy to understand that by article III of the convention the
Dominican Government did not limit its powers to dispose of the
portion of the revenues which might not be necessary for the payment
of the bonds issued under the Convention of December 27, 1924, and
that it is discretionary with it to apply that portion of its
revenues within the terms, conditions and regulations established by
the laws; thus, and in relation with the concrete case of the
bridges, payment for which is stipulated in the contract on which
Your Excellency comments, it is necessary to distinguish that the
amount of their cost ($156,165.00) is stipulated in the budget for
the year 1936, submitted to the methods of payment established by
the building contract and that, therefore, in the light of the terms
of the convention, it is sheltered from all criticism.
If the ideas established by Your Excellency in relation to this
contract were correct, we should be obliged to conclude that the
said comments, in respect to the bridge contract, could be made
regarding all provisions contained in the General Law of Public
Expenses; that all the execution of the national budget will, in
that case, constitute a future debt since wages, salaries, the
maintenance of the sea and land forces, the constructions and
acquisitions of all kinds, are provided to be paid after the
services have been rendered, the works completed, the monthly
payments become due, etc.
In no way and in no circumstances could the American Government
claim, as it has never claimed, nor could the Dominican Government
consider itself, as it has never considered itself, under the
obligation of asking consent to provide for the payment of works, of
services, acquisition of implements, wages of employees, etc., in
its Law of Public Expenses.
The very terms of article III of the Convention of 1924, on the
contrary, explain that the public debt to which the convention
refers is that which is contracted to produce
obligations that compromise the financial capacity of the State
and the interests protected by the convention itself; never the
administrative movements dependent upon the execution of the Law
of Public Expenses.
With the purpose of being always in a position to respond to the ends
contemplated by the convention, that is, not to diminish the
financial capacity of the State, nor to sign contracts which might
involve future appropriations constituting debts, even though these
debts may not have the character of public debt, the Dominican
Government on May 1, 2 and 3 of the year 1929 voted Law No. 1114,
called “Law of Accounting,” which provides in subhead (b) of section 9a that
“no contract requiring the expenditure of public funds, though this
contract may have all the approval required by the Constitution and
the laws, shall have any validity if it be not endorsed with, or if
there be not attached to it, a certificate of the Comptroller [Page 439] and Auditor General in
such sense, and the latter shall not sign such certificate unless
such contract has been properly authorized by the Government in
accordance with the law and there exists an unappropriated balance
from an appropriation filling the requirements of the Constitution,
sufficient to cover such expenses.”
As Your Excellency can see, the Dominican Government has not been
satisfied with the support of the principles, or with the
interpretation of the convention, to protect itself against all
criticism, but it has provided in the law that it will not make
contracts with obligations for payment so long as there are no
appropriations of funds which may not be necessary for the payment
of the public debt.
In requesting Your Excellency to take note for appropriate purposes
of the foregoing set forth in the name of my Government, I take the
opportunity [etc.]
