Minister Dawson to the Secretary of State.

No. 205.]

Sir: Referring to the subject of your No. 48, of March 23,a the collection of the sugar production tax, I have the honor to confirm your telegram as follows:

Washington, December 31, 1905.

Referring to your telegram 16th last March and department’s 48 of March 23. Please report status of suit then proposed to be brought to collect sugar tax.

In view of this Government’s course in not taking action while the treaty is pending you may in a friendly way intimate to Dominican Government that until the question is judiciously determined it would be appropriate and courteous to defer collection of the tax by seizure of sugar or by detention of steamers awaiting this season’s crop or by other forcible measures.

Root.

and to say that I immediately called upon the minister of finance, who was then acting as minister of war ad interim and whom I found absorbed in the then pressing duties of that portfolio. He said that he would be able later to give the matter proper consideration, and assured me that until we had further discussed it the prohibition of the export of sugar by persons in default on the sugar tax would be [Page 610]suspended, and that the ships then loading at Macoris would not be interfered with.

Accordingly I telegraphed you as follows:

Santo Domingo, January 1, 1906.

Sugar tax suit pending supreme court on appeal by Bass. The Dominican Government promises not to interfere with shipments this week.

Dawson.

I confirm your reply as follows, which on account of the interruption of telegraphic communication during the fighting at Puerto Plata did not reach me until January 5.

Washington, January 3, 1906.

Promise not to interfere with shipments this week not understood. Such a ‘limitation not available, illusory, and not responsive to the attitude of this Government in refraining from pressing isolated matters pending complete adjustment under the treaty.

Root.

On its receipt I visited the minister of foreign affairs, who called in the minister of finance. They gave the assurance suggested by you and I accordingly telegraphed as follows:

Santo Domingo, January 5, 1906.

Dominican minister for foreign affairs further promises that sugar exportation will be permitted until final decision supreme court. Negotiations for amicable settlement are pending.

Dawson.

A few days later the managers of the Santa Fé and Cristobal Colon estates came to this city and had several conferences with the minister of finance looking to a concession of time for the payment of the accumulated tax. The minister made them a proposition which they agreed to submit to their principals.

The minister said that he would prefer that the whole amount in question be deposited in the hands of third parties pending the decision of the case now pending before the supreme court, but if the resources of the Sante Fé and Colon estates made this inconvenient he would consent that the arrears be paid in installments.

I ascertain from various deputies and cabinet members that it is the intention of Congress to abolish the sugar-production tax immediately upon its assembling in regular session on February 27. Although they expressly assert that their action in this respect will not be affected by the attitude taken by the sugar planters in regard to the payment of arrears in case the decision of the Supreme Court is in favor of the Government, it is probable that this attitude will nevertheless have its effect when the time actually comes to repeal the present law.

I herewith inclose a note sent by me to the minister of foreign affairs by which our verbal understanding made in pursuance of your telegraphic instructions is made a matter of record.

The only important point which seems to remain open is the form of security to be given by the sugar planters pending the judgment in the court of last resort. Minister Valasquez gives me to understand that he has communicated to Señor Joubert powers to arrange as to it.

I have, etc.,

T. C. Dawson.
[Page 611]
[Inclosure.]

Minister Dawson to the Minister for Foreign Affairs.

Mr. Minister: Confirming our recent conversation, at which His Excellency the minister of finance assisted, I have the honor to inform your excellency that I am sure my Government will appreciate the action of your Government in deferring enforcing the collection of the sugar tax by seizure of sugars, detention of steamers, or other forcible measures pending the judicial determination of the main question. My Government believes that this attitude of the Dominican Government is just and responsive to the friendly attitude of the American Government in refraining on its part from pressing through the diplomatic channel isolated matters pending a complete adjustment under the convention now being considered by the American Senate and the Dominican Congress.

I improve the opportunity to renew, etc.,

T. C. Dawson.