Minister Dawson to the Secretary of State.

[Extracts.]
No. 248.]

Sir: Referring to the same general subject as that of your No. 105, of March 31, action of the Dominican Government represented to be in contravention of the rights acquired under the Clyde Steamship Company concession, I have the honor to report that early in March the local Clyde agents called my attention to a recommendation made by the minister of finance in his recent report to Congress. In substance he recommended that a law be passed reducing port charges by one-half, which action the minister contended would not be violative of the Clyde concession since the charges were originally paid in Mexican currency and are now payable in gold. Therefore to make them $1 per ton and gold would be virtually the same as $2 in Mexican, and would not reduce the differential agreed upon in favor of the Clyde Company.

The agents represented to me that the minister’s reasoning was erroneous, and based upon an ignorance of the real facts, which were that the gold standard was adopted before the amended concession was granted and that the consideration for the abandonment by Clyde of his former right to receive 3½ per cent was the doubling of the differential in his favor. The Clyde agents also represented to me that action in conformity with the minister’s recommendation would be a violation of the agreement entered into between the Dominican minister of foreign affairs and the American Chargé d’affaires on March 6, 1903. A copy of said agreement will be found as an inclosure with Mr. Powell’s No. 510, Dominican series, of March 6, 1903.

I replied to the Clyde agents that for the present, at least, I could address no communication to this Government on the subject; that what the minister had done was merely to make a recommendation to Congress; that it seemed to me improbable that Congress would act; and that in any event the recommendation in itself did not constitute a breach of the Sanchez-Powell agreement, nor did I consider that there existed such an imminent danger thereof as would justify me in addressing a note to the Government, even ii the peculiar circumstances now existing did not render it unadvisable.

I advised the agents themselves to call the attention of the minister to the misapprehensions they believed he had fallen into, and to see if by direct efforts with this Government they could not prevent the action they feared.

Shortly subsequently I examined the correspondence of Mr. Powell and came to the conclusion that the proposal of the minister would, if carried into effect, violate the agreement of March 6, 1903. About the same time I received word that a suit had been brought against the American company engaged in the petroleum business at Azua; the suit against the Ros company still menaced that enterprise, and the operations of the hemp company near Barahona were by its managers believed to be in danger of interference from the judicial and administrative authorities. I therefore took occasion the next time I saw President Caceres to suggest to him the unadvisability of letting the impression become general that his Government was [Page 559] adverse to all American enterprises, and of letting action be pushed to a point where official corespondence might be necessary.

In the meantime Captain Reed, the general agent of the Clyde Company, had made his argument before the minister of finance and a few days subsequently told me that he had been attentively heard and that he was now confident that the matter would not be pushed in Congress.

I have, etc.,

T. C. Dawson.