[Extract.—Exhibits not printed.]
Santo Domingo, Dominican Republic , September 23, 1907 .
Sir: Pursuant to the terms of the modus vivendi entered into between the Government of the Dominican Republic and the United States March 31, 1905, that temporary measure expired by limitation at the close of business July 31, 1907, the American-Dominican treaty, 1907, at once became effective August 1, 1907, under the general regulations governing the Dominican customs receivership promulgated by executive order July 25, at the White House, Washington by the President of the United States.
[Page 323]The report submitted herewith, as indicated by the annexed tables, is supplemental to those already rendered by the former controller and general receiver, covering the two periods, of one year each, embraced within the inclusive dates, April 1, 1905, to March 31, 1907. As a matter of four complete months have expired since the rendition of the last general report and review of transactions, separate tabulated statements for the four months, April 1 to July 31, 1907, have been prepared, with comparative tables for the corresponding period of the year immediately preceding (1906).
In addition to the data mentioned above, and in order that a comprehensive and succinct statement may be available of the transactions for the entire history of the modus vivendi, there have been prepared complete recapitulated tables, segregating collections and showing in detail dispositions of all funds handled by the receivership. The narrative portion of this report is intended as a compendium and will deal only in general terms of results actually accomplished with the assistance of the United States in the fiscal affairs of the Dominican Republic, particularly as the fact is well appreciated that the administrative features of the work of the receivership during the past two years already have been thoroughly discussed. The last report on this subject only recently having left the printer, it is thought unnecessary, and perhaps presumptious, for the undersigned to make additional comment along these lines, especially as the matters reviewed were incident to the administration prior to the date that he assumed charge of same.
american assistance.
As it portrays the actual condition extant in the Dominican Republic during the early part of the year 1905, when a crisis was at hand which caused a helpless people to call for disinterested assistance from the outside, subsequently rendered by the United States, the liberty is taken of quoting herewith the last paragraph of the message dated February 15, 1905, of President Roosevelt, addressed to the American Senate—
We now have a great opportunity to secure peace and stability in the island, without friction or bloodshed, by acting in accordance with the cordial invitation of the governmental authorities themselves. It will be unfortunate from every standpoint if we fail to grasp this opportunity; for such failure will probably mean increasing revolutionary violence in Santo Domingo, and very possibly embarrassing foreign complications in addition. This protocol affords a practical test of the efficiency of the United States Government in maintaining the Monroe doctrine.
And, likewise from an earlier portion of the same message, a prediction which has been verified:
Under it [the protocol of an agreement] the custom-houses will be administered peacefully, honestly, and economically * * *.
For the time which elapsed and represents the life of the modus vivendi—twenty-eight months—the important, difficult, and trying work assigned was successfully performed by the agents selected by the United States Government. How well that stewardship has been discharged to the satisfaction of all concerned is evidenced by the fact that not one single complaint nor line of criticism has been received from the Dominican Government, nor from any consul or special representative, residents of the city of Santo Domingo, particularly [Page 324] charged with safeguarding the interests of and reporting upon matters of moment to those of their countrymen, holders of Dominican bonds long since due, and for which settlement repeatedly had been urged.
dominican appreciation.
That the best citizenship of the Dominican Republic recognizes the good accomplished is reflected in a statement by its leading citizen, the Hon. Emiliano Tejera, minister of foreign relations, who, by his unquestioned patriotism, commands the respect and enjoys the confidence of all classes and factions. In his annual report, dated February 23, 1906, occurs (translated from the Spanish):
The beneficial result of this proper disposition, both politically and economically speaking, is shown by the failure of the last revolution * * *. The day will come when the convention of the 7th of February and the modus vivendi will be appreciated to their full value. Both agreements are the deliberate results of the purest and most conscientious patriotism.
Practical good and lasting benefit has accrued to the Dominican Government beyond the mere betterment of its economic condition at home and financial standing abroad, as a direct result of the success which has attended the altruistic mission of the United States in this field. Besides the accumulation and safe-keeping of a large fund for future payment on the national indebtedness, an era of comparative peace has prevailed, industry awakened, commerce encouraged and emboldened to seek possible openings in this territory, municipal improvements accomplished, and the building of highways into the interior undertaken. The foregoing indicates what is possible of accomplishment in this Republic when peaceful conditions prevail and orderly development engages the attention of its citizens. With the customs revenues safeguarded the incentive is removed for internal disturbances, having for their main purpose the control of collections, with attendant mismanagement and waste of same.
santo domingo, then and now.
Anent the foregoing, as illustrative of former conditions and present progress, is incorporated a nutshell recapitulation of the financial and political history of the Dominican Republic, amplified and brought down to date, taken from the first annual Review of the Organization and Transactions of the Customs Receivership.
The salient facts referred to are:
| 1865, July 12 | Gained independence; national debt | Nil. |
| 1865–1905 | 20 general revolutions: revenues collected over | $40,000,000.00 |
| National debt contracted, face value approximately | 35,000,000.00 | |
| Total expenditures | 75.000.000.00 | |
| 1905. March 31 | Cash in treasury | Nil. |
| National debt | In default. | |
| National credit | Nil. | |
| Condition of country, roads, and public buildings worse than in 1865. | ||
| 1905, April 1 | “Modus vivendi “established | |
| 1906, January 2 | Revolution attempted, but collapsed January 16, 14 days after inception, from lack of funds. | |
| 1906. March 31 | First year of “modus vivendi:” cash on hand | 1,228,536.44 |
| 1907, March 31 | Second year of “modus vivendi;” cash on hand | 2,689,589.92 |
| 1907, July 31 | 2 years and 4 months from adoption of “modus vivendi;” debt not increased; many public improvements made and inaugurated; and cash on hand. | 3,223,986.02 |
The above table tells at a glance the past and present economic condition of the Dominican Republic, and reveals in a manner beyond the scope of ordinary language the real benefit derived by the Dominican Government, and all others interested pecuniarily in her stability, from the work accomplished by the American receivership.
collections and dispositions—payments to dominican government.
The aggregate gross collections handled by the receivership for the period stated amounted to $6,845,344.40, and no breath of suspicion has arisen but that same have been fully, systematically, and honestly accounted for, and thus was established a precedent unique in the annals of the Dominican Republic. Although full detailed particulars will be found in the annexed tables available for ready reference, to which attention is invited, it is thought well here to state that of the gross amount mentioned immediately above $2,896,675.43, representing 45 per cent, after certain deductions mutually agreed upon, was handed over to the Dominican Government for meeting its current expenses. Increased customs receipts were realized from the very commencement of the receivership and continued generally during the twenty-eight months, which accounts for the amazing fact that by means of the new methods employed the Dominican Government was able to pay all of its current expenses, utilizing less than one-half, or, to be exact, 42 per cent of the gross customs revenues, whereas in former times it was not only unable to meet its expenses when it was supposed to receive all of the revenue collected at the several custom-houses of the Republic, but incurred new indebtedness at the rate of approximately $1,000,000 per annum for some thirty-odd years.
trust fund.
To the trust fund, for which the National City Bank of New York was designated as depository, there were transmitted, by means of exchange, $3,148,764.32, on which interest amounting to $75,221.70 accrued to July 31, 1907, or a grand total of $3,223,986.02 available for use in meeting some of the Dominican indebtedness in the manner prescribed by the American-Dominican treaty. The amounts deposited monthly averaged $112,455.87 for the twenty-eight months, a sum considerably in excess of the future monthly payments provided for by the terms of the treaty, a convincing demonstration which augurs well that the Dominican Republic in the future, accepting the past as a safe criterion, will be able amply to meet the regular payments of interest on the new bond issue, besides providing funds for amortization.
interest on trust fund.
Considered from another point, the trust fund on deposit in New York, July 31, 1907, was earning interest at the rate of approximately $6,600 per month, which will increase to $6,900 per month by the 1st of January, 1908, and on or before that date it is presumed the entire fund will have been applied in the manner provided by the treaty.
[Page 326]disbursements.
The total disbursements amounted to $799,904.65, which, added to the larger amounts stated above, representing payments to the Dominican Government and segregations for the trust fund, respectively, equal the grand total of gross collections, $6,845,344.40; however, of the $799,904.65 relatively a small portion was devoted to the payment of customs expenses proper, as an examination of the items 1 to 6, Table No. 1, Exhibit F, will show.
customs expenses proper-cost of collection.
For the maintenance of the customs service and receivership, including payments of salaries, purchase of supplies, incidental expenses, etc., for the eleven entry ports—four along the Atlantic Ocean, four to the south facing the Caribbean Sea, and three in the interior adjacent to the Haitian border—was expended the sum of $247,498.76, representing a cost to collect $1 of 3.6 cents, which is less than that spent for similar purposes in the principal collection districts of the United States, outside the port of New York, and also much below the cost for the same service in the Philippine Islands. In the capital, Santo Domingo, the separate organization of the receivership was maintained distinct from the individual ports. To obtain results it was necessary to operate eleven ports, long since established by Dominican law, although from Table No. 10, Exhibit F, it will be seen that approximately 90 per cent of the entire collections was gathered at four of the most important ports, namely, Puerto Plata, Santo Domingo City, Sanchez, and Macoris. Nevertheless, the necessity for surveillance at the other ports was apparent, otherwise the revenue at the four places mentioned would have materially decreased.
customs and frontier guard.
To make in any way effective the work of the customs service at the equipped entry ports, the necessity for preventing smuggling by land across the Haitian border early became manifest. With this task, the difficulty of which was apparent, the Dominican Government was powerless to cope in any successful manner and freely acknowledged its inability. Thus, the anomaly existed of the customs laws being enforced at the seacoast entry ports, leaving, as it were, the back door wide open. As a remedy for this defect and to demonstrate to the Dominican authorities what could be accomplished by determined effort, coupled with honest endeavor, a customs and frontier guard service, a mounted and armed force, which also performs quasi-police duty in the rough and unfriendly country in the interior, was organized September 1, 1905, and has since been maintained with success. The total expense for this preventive service amounted to $103,923.94, including everything appertaining to the guard work, equipment, purchase of mounts, arms, house rent, payment of salaries, and miscellaneous expenses. The results accomplished by the guard, undergoing many hardships, were far-reaching and made possible the improvement in volume of lawful business and collections at the entry ports where naturally the bulk [Page 327] of importations is handled. To convey an idea of the hazard of the undertaking it need only be remarked that of the seventeen Americans assigned at different times to this outside branch of the receivership, two lost their lives in the performance of their duty—shot down in cold blood by outlaws engaged at the very moment in smuggling contraband—while another American inspector in an earlier attack was severely wounded and made a helpless cripple for life—three killed and wounded, or 18 per cent of the total number of Americans engaged during the twenty-eight months.
dominican revenue-cutter service.
Owing to the insular character of the Dominican Republic and its proximity to numerous other islands of different governments, which enjoy considerably less tariff rates, during the second year of the receivership it was thought advisable to provide suitable small power craft which could be utilized for customs purposes in the detection and prevention of smuggling by sea. The Government at the commencement of the modus vivendi did not own or operate as much as one rowboat in connection with its entire customs service.
In December, 1906, there were received from New York, where same had been built under contract, four steel cutters equipped with 50-horsepower gasoline engines. These boats are of very light draft and small beam. They have been used for certain patrolling duty and also serve a practical purpose for the Dominican Government in transporting officials, officers, and small bodies of troops and the mails to and from different points. The cutters, of course, fly the Dominican flag and represent an asset besides other benefits gained by the Government during the past two years. Although maintained and operated solely under the direction of the receivership, officered by Americans, they have been placed, whenever practicable, at the disposal of the Government for its exclusive use. To July 31, 1907, the total expense, including the original purchase price, was $114,662.39.
other expenditures.
Within this classification and of the total, $29,455.67, as will be noted by reference to Table No. 5, Exhibit F, there was disbursed the sum of $19,155.67 for payment of exchange on transfer of funds to New York and locally; the remainder was for settlement of $5,300 authorized by the Dominican Government and paid to an American inspector wounded and permanently crippled while in the discharge of his duty, and the payment of $5,000 to the widow of another American inspector who was murdered while in the performance of duty—protecting and defending the revenue laws of the Dominican Republic.
refunds, personal fees, concessions.
Among the items under the caption “Expenditures and disbursements” is that of $160,805.91, representing refunds, personal fees, and concession benefits paid pursuant to law and handled by the receivership as a matter of accommodation and to insure orderly and systematic dispatch of public business.
[Page 328]Refunds cover payments to importers in the nature of return of a portion of amounts originally collected upon doubtful classifications when, as a result of protest to the customs court, it is decided that the contention of the importer was correct and the original classification applied to the imported merchandise was in error. Under a provision of the customs law in force, the proceeds resulting from the sale of merchandise seized as contraband, after the duties and expense of seizure and sale are accounted for, are payable to the person giving information leading to the detection of the attempted fraud, or to the employee who makes the seizure. Such payments are also considered and accounted for as refunds. Indicating the exactness of original classifications, which the receivership has endeavored to regulate, it is refreshing to note that but $15,935.41 were reimbursed for the period of more than two years.
Personal fees are collected and immediately disbursed at prescribed rates for the service rendered, respectively, by the medical officer, pilot, signalman, and interpreter for each incoming vessel from a foreign port. As stated above, this has been handled by the receivership in the interest of all concerned.
Peculiar to the Dominican customs service there exists numerous concessions given by the Government in the past, improvidently upon various pretexts, for raising funds for which there seems to have been no adequate return. Some of these concessions are in reality additional tax on imports, for the use of wharves, primitive transportation facilities, customs warehouses, etc., and the aggregate reimbursements for this item amounted to $103,967.13 for the time embraced within this report. Many of these concessions are noticeably burdensome, causing differences in exactions for similar service at the several ports and should speedily be abolished as one of the first steps to ameliorate conditions surrounding trade and commerce and placing this county on a basis far removed from the old order of things.
internal revenue.
So-called “internal-revenue” collections represent the segregation of 30 per cent of the export duties, under an act of the Dominican congress approved June 27, 1905. Since the law became operative, May 1, 1906, $143,557.98 have been segregated and disbursed by the receivership. The disbursements have been made in accordance with two appropriation acts of the congress, which approved the contracts entered into by the executive power for the construction of two branch roads, and provided for the payment of 50 per cent and 30 per cent, respectively, of the internal revenue to the contractors designated. Those contracts specifically require the payments to be made monthly by the general receiver of Dominican customs. The unappropriated balance, 20 per cent, of the amount segregated has been paid into the national treasury upon orders of the executive. The object of the law was to set aside this particular portion of the export duty to foster and promote the building of railroads. This legislation was enacted subsequent to the commencement of the modus vivendi and is taken as a gratifying evidence that the building of roads, either wagon or rail, has been recognized as of prime importance to the internal improvement and development of the country. Increased [Page 329] customs receipts under the modus vivendi and the assurance of stability of the revenue made it possible to set aside a portion of same for the commencement of such laudable work. As is obvious, anything done in this direction will result in lasting benefit to all agricultural enterprises, inasmuch as the lack of transportation facilities from the interior points to coast ports for shipment is a most serious handicap to same, and naturally lessens the marketable value of the crops of the island, besides reducing the volume of exports.
It has been the endeavor herein to discuss briefly and explain the individual groups, eight in number, of all expenditures and dispositions, but it is suggested that a more comprehensive idea of the subject may be gained by reference to the separate tables of Exhibit F, compiled in a manner to afford complete information upon cursory examination.
statistical data of commerce.
Prior to the advent of the American receivership the compilation and preservation of reliable statistics of the country’s commerce had never been effectively undertaken. Realizing the importance of such records, absolutely essential to the proper and intelligent furtherance of customs administration as recognized by all countries, and for the benefit of commercial interests, the receivership caused to be prepared tables and summaries at intervals covering the period between April 1, 1905, and June 30, 1907. This has been the first comprehensive and reliable work of the kind available for the use and guidance of those concerned in the foreign trade of the country, and this concrete fact was recognized and appreciated by the Dominican government to the extent of influencing it to establish an independent bureau of statistics. That department, in the beginning, based its work upon information gathered through the receivership, which has lent to the central government all possible aid in inaugurating such a worthy system.
Summaries of Dominican commerce for quarters, half years, and annual periods during the entire life of the modus vivendi, inclusive to June 30, 1907, have been published in printed form. They afford detailed data for all interested commercially. Through the courtesy of the Bureau of American Republics, such summaries from the beginning of 1906 have been published in the bulletins of that important medium, and thus became readily accessible to those who would most likely seek such information concerning this, as well as other Latin-American countries.
The grand total of foreign trade of the Republic for the twenty-eight months was as shown in the table following:
during the modus vivendi, april 1, 1905, to july 31, 1907.
Imports into the Republic.
| Invoiced value | $9,099,929.55 |
| Duties collected | $5,675,117.67 |
| Bought from the United States | $5,725,028.00 |
| Percentage bought from the United States | 62.9 |
| Amount carried in american bottoms | $5,624,625.91 |
| Percentage carried in American bottoms | 61.8 |
Exports from the Republic.
| Invoiced value | $15,996,766.14 |
| Duties collected | $818,430.43 |
| Sold to the United States | $8,692,599.00 |
| Percentage sold to the United States | 54.3 |
| Amount carried in American bottoms | $5,043,099.49 |
| Percentage carried in American bottoms | 31.5 |
Aggregate foreign trade.
| Invoiced value | $25,096,695.69 |
| Duties collected | $6,493,548.10 |
| Trade with the United States | $14,417,627.00 |
| Percentage of trade with the United States | 57.5 |
| Amount carried in American bottoms | $10,667,725.40 |
| Percentage carried in American bottoms | 42.5 |
Of the total amount of revenue from all sources, payments of duties on imports reached $5,675,117.67 and on exports $818,430.43, or together $6,493,548.10. The percentages stated above show that to the United States went more than half of the exports, and that country supplied a still larger proportion of the imports. Vessels of American registry transported 42.5 per cent of the total foreign trade of the period, 61.8 per cent of the imports, and 31.5 per cent of the exports.
When some of the onerous concessions now in vogue, to the detriment of trade development, are removed, as contemplated by the terms of the treaty, increased and additional shipping facilities with the United States may be expected, that should have the effect of promoting Dominican commerce and, inferentially, expanding American trade.
scope of receivership.
It is deemed proper to insert as a matter of record in this review that the receivership to which this final report relates was never in actual control of the Dominican customs service proper. The receivership has been a separate and distinct branch, the work of which was confined largely to the receipting for, safe-keeping, and honest disbursement of those funds collected by the Dominican officials designated as deputy receivers in charge at the several custom-houses. In a way, and for the general good of the service, the receivership attempted to act in an advisory capacity in order to accomplish certain reforms, establish uniformity in matters of classification, and stamp out, if possible, questionable practices, which naturally prevented an honest enforcement of the customs laws, but in some respects it was not entirely successful, owing to the lack of cooperation. Hence, it must be conceded that the achievement wrought is all the more remarkable and testifies in an unmistakable manner to the prestige gained; it should redound to the credit of the United States for the tangible accomplishment in this field, undertaken, as stated above, amidst trying circumstances.
résumé.
The undersigned is enabled to discuss this subject without hesitancy for the reason that he participated to no appreciable extent in the administration herein described, as he assumed charge of the receivership [Page 331] by transfer of the office from his predecessor on June 6, 1907, which was less than two months before the modus vivendi terminated. To Col. George R. Colton, who inaugurated the system, saw it successfully carried through more than one crisis, and left only recently with the enviable satisfaction of one whose work was complete and well performed, is due the credit for the eminent results obtained by the American participation in the fiscal matters of the Dominican Republic. The receivership to continue by virtue of the provisions of the American-Dominican treaty will profit by the work done in the past, and the success which may hereafter be had will rest largely upon the businesslike foundation already laid. Commendation is not only due Colonel Colton, but to the small staff of American employees who accompanied him or came upon subsequent dates, commissioned by an alien Government to perform the diversified work in its several departments. These men made sacrifices and put up with many personal inconveniences, from the American viewpoint, laboring within and out of prescribed hours in a tropical climate, and accomplished results for the receivership which constitute a record made by American citizens serving a foreign country, under unique conditions, that merits, in my opinion, unstinted praise.
Respectfully,
General Receiver of Dominican Customs.
The Chief, Bureau of Insular
Affairs,
War
Department,
Washington.