[Untitled]
Santo Domingo, Dominican Republic , March 31, 1907 .
During the two years which elapse with this date since the modus vivendi became effective the Dominican Republic has been raised from financial chaos and political anarchy to a position of comparative ease and security, while its commerce has developed to a marked degree as business conditions have improved with the increasing assurance of peace.
Contrasting the present with past conditions, the minister of finance and commerce, Hon. Frederico Velasquez, in his annual report for 1906, extended extracts from which are annexed in Exhibit O, says, in part:
The items of revenue during the year 1905 and those of 1906 speak clearly, with renewed eloquence, of the fact that for some time past we have been living, in the public posts, a life of order and honesty, where but a few years ago life, with few exceptions within and without the national palace, was one of shamelessness, dilapidation, cupidity, and permanent disgrace for the Republic, being the principal cause, if not the only one, why our weak State has felt itself more [Page 332] than once trembling on the brink of the abyss, and that for a long time we have found ourselves without economic autonomy, over weighed by debts, unjustifiable for the greater part, suffering insults and humiliation.
And further:
Thanks to the modus vivendi, we have lived two years with relative ease and accumulated a respectable amount of money destined to the payment of said debts.
general effects of modus vivendi.
The immediate financial benefits to the Republic of that wise measure, adopted pursuant to the decree of March 31, 1905, can not be more clearly or briefly shown than by an examination and comparison of the data contained in the annual reports of the minister of finance and commerce for the calendar years 1905 and 1906.
From the first of these it is learned that upon the 1st of January, 1905, the national treasury was entirely destitute of funds, and that by April 1, following, the Government had run behind in meeting its current expenses approximately $100,000, which amount it then owed, upon demand accounts, to local firms. The same report shows that at the end of that year (1905), but nine months after the establishment of the modus vivendi, the Government, after paying all expenses and making good the shortage that existed April 1, had on hand $838,994.39, having collected revenues since January 1 amounting to $2,427,802.20, the largest receipts of any year up to that time in the history of the Republic. The total revenues collected during the succeeding year surpassed those of 1905 by $1,398,876.97, or 57.6 per cent, aggregating $3,826,679.17, and the unexpended balance on hand at the end of that period, December 31, 1906, including $2,317,607.40 set aside to apply upon the public debt, amounted to $2,607,977.76.
Thus, while the Dominican Government was unable to meet its current expenses, and running behind, prior to April 1, 1905, within twenty-one months after that date it had saved from its revenues, in round figures, $2,700,000, and had, at the same time, received from the 45 per cent of its customs revenues and properly expended more money than it had ever before actually received from the entire products of those revenues in the same length of time.
To these results the customs department, operated under inspectorial supervision by the receivership, contributed $5,415,241.20, or 86 per cent of the entire revenues collected.
proposed loan.
In the meantime, based upon the demonstration that the Republic was entirely solvent and capable of meeting its obligations in such amounts and proportions as were, upon conference with creditors, deemed equitable or legal for adjustment, and upon the assumption that the general plan of the modus vivendi would be formally adopted and strengthened by a treaty with the United States, of which that temporary disposition was a forerunner, the Dominican Executive was able to negotiate the sale of $20,000,000 5 per cent, gold, fifty-year sinking-fund bonds at the favorable rate of 0.96.
This transaction was of course conditioned primarily upon the ratification of the treaty alluded to, and, further, upon the agreement that the proceeds of the new loan should be devoted, first, to the extinction [Page 333] of the old debt, which had been reduced by agreement with creditors, on account of cash settlements, from more than thirty-three to seventeen millions; second, to the cancellation of certain concessions held to be burdensome upon the country, and the remainder to public improvements. Exhibit O, annexed, contains the details of this proposed loan.
new treaty negotiated.
The original treaty of February 7, 1905, which was intended to meet more complicated conditions, and was therefore unnecessarily extended, was withdrawn and a new one, much simpler in form but containing all of the provisions required as a basis for the proposed loan and handling of the customs revenues by American agents in amortization thereof, was negotiated and signed at Santo Domingo February 8, 1907.
This treaty, a copy of which is annexed as Exhibit L, was approved by the American Senate February 25, 1907, and is now awaiting action by the Dominican Congress, with every assurance of early ratification.
Upon its acceptance and the completion of the attendant financial arrangements, Santo Domingo will have been transformed in a little more than two years from a bankrupt State—without credit at home or abroad, consumed by revolutions within, and threatened by creditors without—into a solvent and peaceful country of some dignity and promise.
reconstruction.
The patriotic work of bringing the Republic up to this point has been no easy task for those Dominicans possessed of the requisite intelligence, patience, and courage to successfully oppose the almost overwhelming odds that have beset them.
Substantial business people and property owners throughout the country have as a rule favored the plans for reformation, but they were too deeply discouraged by past events to entertain great hope of their realization, and have therefore been inclined to indifference.
Political revolutionists, who saw their opportunities curtailed by the removal of the customs revenues from the possibility of exploitation, have been the bitterest enemies of the treaty, and have endeavored by misrepresentation to incite the ignorant classes to forcible resistance.
To this influence was added the opposition of practically all politicians out of office, who believed that any disposition tending to increase the strength of the Government would make its tenure, and their involuntary retirement, permanent. And many of those who were avowed supporters of reformation believed that, being so, they should be rewarded by exemption from any features which might interfere with their personal interests. Of these, Minister Velasquez, in his annual report for 1906, says:
So contrary to order are the customs, so inveterate in general has become the habit of disorder, that many of the men who theoretically express enthusiasm for the establishment of regular and systematic order, understanding that only in that way is the salvation of the country possible, when it comes to actual practice, when they find that such a state of affairs would be imposed upon them, subjecting their life to certain limitations not in accord with customs [Page 334] already rooted, in opposition to certain interests created, rebel against the saving reform, accusing the person in charge of its execution for his perseverance and faith in executing the same.
These conditions are noted as indicative of the apparently insurmountable obstacles which have confronted those patriotic Dominicans who seem now, with the assistance of the modus vivendi, about to place their country permanently upon a safe footing.
The most powerful Dominican influence to that end has been that of the Hon. Emiliano Tejera, present minister of foreign relations, who has served his country honorably during the past forty years whenever, but only when, there seemed an opportunity of rescuing it from the anarchy into which it had fallen. His efforts have ever been to relieve the people of the burdens with which they have been tortured by the inhumanity and dishonesty of political brigandage.
In this crisis he has therefore been able to speak of the past and advise for the future with authority. His words have been unmistakable and have put to shame before the public those leaders who have disgraced their country and would continue its exploitation.
The following translated sentences from this minister’s annual report for 1906 are quoted here as indicating the vicious political practices that have obtained in the Republic and the earnestness with which he has appealed for better faith in the treatment of national affairs:
I am pleased that patriotism is ever on the watch; that is its duty in weak countries; and when the hour of sacrifice arrives let it be proclaimed to the four winds, and the ancient and modern heroism, not unknown in Dominican territory, be repeated. But I do not believe it well to permit ourselves to be alarmed by phantoms and sound the cry of alarm when there are no enemies upon the horizon, nor be frightened when we hear the voices of the old spoilers, now disguised as patriots, speaking for the sole purpose of finding some one to purchase their silence or throw them a morsel to gnaw. The national independence is not in danger because we would make a loan to meet our obligations.
But independence is jeopardized by provoking discord and exciting hostility between brothers; by hindering the termination of the former exploitation by foreign merchants, who, on account of customs duties and in order to excite and sustain civil war, loaned ten dollars for the purpose of collecting a thousand midst the weeping and wailing of widows and orphans; by obstructing and, impeding the establishment of a system that would permit us to instruct and improve ourselves that we might produce the necessaries of life—in a word, to civilize ourselves, and not hereafter be a danger and a shame to the countries that surround us, and who have the right to intervene to prevent us from living in barbarism.
Oh, what lack of common sense the Dominican people would show if they were to believe that their independence would be lessened if they impeded and took away from bad governments—good ones will not take advantage of it—the power to encumber them with heavy debts in order to enrich the officials and their protégés!
What a lack of common sense they would show if they really believed that their former discredited leaders—whose declarations of honesty cause their old associates to laugh—are to-day the champions of the country’s dignity and of its economic independence, who yesterday helped to compromise it, and would compromise it again if they had the power and would be benefited thereby!
What lack of common sense the people would show if they should regard as traitors those patriots who have at all times borne self-denial, even self-sacrifice; whose hands and consciences are clean, and who to-day, instead of taking the rest to which they are entitled, struggle patriotically and tenaciously to lighten the burdens of the same people and prevent their future imposition!
Extended extracts from this report, which has exerted a strong influence upon the situation in the republic at this pivotal point in its history, are annexed as Exhibit N.
[Page 335]customs conditions and work.
As may be inferred from the foregoing remarks and quotations, the conditions and agitation that have existed during the past year have not been altogether favorable to reforming and systematizing a service which has, during the life of the republic and until the establishment of the modus vivendi, been the center of corruption and basis for commotion.
Revolutionists have generally regarded the segregation of customs funds for application to the needs of the republic as a personal loss to themselves, and the success of the modus vivendi a forerunner of permanent denial. Therefore prejudice and political influence have generally opposed the reformation sought.
In view of the obstacles thus presented, it is with some degree of satisfaction that the results attained, showing marked improvement and progress in all directions, are recorded.
The principal efforts of the receivership during the year ending March 31, 1907, were directed toward the suppression of smuggling and obtaining uniform assessments of duties at the various ports of entry.
In a review of this service for the previous year, which extended back to the date of its organization, mention was made of the lack of customs control upon the land frontier and the establishment of a guard in that territory for the purpose of intercepting the illicit trade then carried on with Haiti.
frontier problem.
But the extent of that trade and its demoralizing effect upon the commerce of the republic was not understood until a serious attempt was made to suppress it. Little was known, even by Dominicans, of the savage region along the Haitian border, which forms the western boundary of the republic. It was ruled by local chiefs, some of whom denied allegiance to any superior power, while others claimed to derive their authority from the central government, but refused to obey its commands or enforce the law. Practically all of these and their followers were either directly or indirectly interested in smuggling. As the minister of finance and commerce states in his last annual report, “the regular commercial transactions of the frontier population were smuggling.” For the sake of proper distinction, however, it should be noted in this connection that those who procured and benefited most from smuggling were foreigners, composed principally of Turkish, Assyrian, and Italian merchants, while the Dominicans engaged were, as a rule, merely the tools of the trade performing the labor required.
These conditions were permitted to continue by the weak central governments which followed one another in rapid succession as the price of peace.
Santo Domingo was endeavoring to collect a high rate of import duty upon three sides of its territory, while the fourth (Haitian frontier) was entirely open to free trade.
The import duties imposed in Haiti were approximately 25 per cent ad valorem, as against 73.8 per cent or more collectible in Santo Domingo.
[Page 336]Thus prior to the organization of the receivership foreign merchandise imported through the seaports of this Republic was paying nominally 73.8 per cent duty and competing in the interior against merchandise imported through Haiti that had contributed nothing to the revenues of Santo Domingo and but 25 per cent to those of Haiti.
Upon investigation it was found that this condition had become such a recognized factor in trade that Dominican importers calculated upon it as a regular competition to be met, which, being based upon fraud, exerted a demoralizing influence upon legitimate commerce throughout the Republic, and no doubt induced many of the deceptions formerly practiced upon, and irregular methods pursued in, the established customs organization.
The merchants and importers at the seaports of this country had just ground for demanding that the revenue laws should be uniformly enforced, and that if the customs tariff were to be strictly applied to the merchandise handled by them through regular channels the smuggling competition of the frontier should be removed.
suppression of frontier smuggling.
To meet this requirement, however, under the conditions related, has been and still is a dangerous and difficult task, involving, as it does, interference with the established but unlawful business which has furnished employment to the great majority of the ignorant and savage people residing along the Haitian border. It required independent action and dealing directly with local chiefs in a region over which neither the central governments of Haiti nor Santo Domingo exercised control.
The subjection of the frontier to customs regulation was, however, essential to the proper customs administration of the Republic, and the work of accomplishing that purpose has been so far successful that there is to-day practically no merchandise illegally introduced for sale or trade over the border from Haiti.
results of frontier work.
This result has been of the greatest importance, not only directly to the revenues, but in relieving the entire trade of the country from the speculative character that smuggling competition formerly imparted to it. In short, the principal cause for the fraud which has permeated the country’s commerce has been thus removed. And not the least of the benefits accruing to the Republic from this work has been the introduction of civilization, the example of order, and the exhibition of courage and honesty of purpose among a portion of its population heretofore abandoned as incorrigible, but nevertheless susceptible to influence through contact with sterling decency.
The foreign merchants who have conducted their unlawful operations in that country are beginning to leave, and, if the work of the frontier customs organization is not interrupted, must all eventually do so, as they can not pay the legal duties in addition to the cost of land transportation across Haiti and compete with merchandise imported directly by sea through the nearest entry ports to the Dominican markets they formerly controlled.
[Page 337]Comparison of the 1905 and 1906 records of regular importations of cotton goods, which formed one of the chief classes of merchandise formerly imported from France and smuggled in through Haiti, furnishes a striking example of the revolution in trade brought about by the closing of the frontier.
The total value of these goods imported through regular channels during 1905 was but $552,774, while the lawful importations of 1906 were valued at $1,136,358, an advance of more than 100 per cent. And greater significance is given to these figures by the fact that the increased importations of 1906 represent more than doubled purchases of this class of merchandise from the United States and Great Britain, the excess over last year no doubt taking the place to a considerable extent of the French goods formerly smuggled in by way of Haiti.
The details of this reference are shown under the heading of “Cotton, manufactures of,” in Table No. 1 of Exhibit J, annexed.
frontier customs.
The general features of the frontier customs organization have not been greatly changed since its establishment in September, 1905, and as outlined in that year’s review, but it has increased in effectiveness as it has gradually gathered power and gained control of the situation.
The organization is at present composed of the customs and frontier guard, consisting of 118 armed and mounted Dominicans distributed along the 150 miles of Haitian border, 3 inspectors (Americans) acting as deputy receivers at the interior ports and commanding the guard in their respective districts, 1 inspector at large (American), and 1 deputy receiver (American) in immediate control and command of the entire body.
An addition to the service recently made has been the establishment of the first overland mail communication between the seaports of Monte Christi on the north and Barahona on the south, thus connecting all of the towns and barrios of the interior with the outside world, which is appreciated by the inhabitants and should be productive of much good.
That special service is performed by the patrols of the guard who are constantly passing up and down the line within certain limits, and each of whom gathers the mail from the guard stations used as temporary post-offices in his territory and forwards through his connecting patrols.
A stone custom-house and stronghold, 48 feet square, with walls 20 feet high, has been erected at El Fondo, upon the southern end of the line, which will cost when completed about $3,000. This building will provide suitable customs offices for the district of Tierra Nueva, and is so constructed that it may be used as a refuge and defense in case of emergency. The construction of another building of a similar character and for the same purposes at Comendador, situated about the center of the line north and south, has been authorized at a cost of $2,750, and the work will be pushed to completion as soon as possible.
The total expense of the customs and frontier guard during the past year amounted to $55,167.54, and while this sum is larger by reason of the purchase of permanent equipment and unforeseen [Page 338] emergencies than should be required for the annual maintenance of that service, it is insignificant in comparison with the benefits derived therefrom.
As the amount of this expense has been deducted from the gross revenues before division, it has been paid in about equal proportion from the 45 per cent accruing to the Dominican Government with which to meet its current expenses and the funds available for the payment of customs expense.
Table No. 11 of Exhibit A and Exhibits D, E, and G, annexed, contain the particulars of this organization, its personnel and attendant expense, while its present condition is shown by a statement of the officer in charge included in Exhibit M.
The progress made in securing recognition of the law in that wilderness of mountains and arid plains stretching across the island from north to south along the western boundary of the Republic, which had rarely been traversed by foreigners, and which no outside Dominican enters voluntarily, is due to the efforts of the American citizens who volunteered for that service, and who have been immediately in charge of the work. They are manly men, typical of those who have broken the wilds of our own frontiers, who talk little, but do things; who would be embarrassed by compliment, but who rejoice in their own manhood. To them Santo Domingo owes a debt it can not pay, because the results of their work and the sacrifices they have made to accomplish them can not be measured in dollars; they are an offering to civilization.
During the past year two of these men lost their lives at the hands of outlaws, in the center of a frontier town of 1,500 inhabitants, who were so ignorant or so far intimidated that they made no effort to prevent the crime or capture the criminals.
One of these was Deputy Receiver Charles P. Thurston, late of the Philippine service, and the other Inspector John Milbourn, who came here from Porto Rico, where he had been discharged, after “excellent” service, from the United States Army.
Mr. Thurston was a single man, with no known dependants, but Inspector Milbourn left a wife, Porto Rican, and three children. To Mrs. Milbourn the Dominican Government voluntarily paid $5,563 “on account of the death of her husband while engaged in the performance of his duty as a customs officer of the Republic,” and in final settlement of all claims for compensating damages, which was accepted by her and receipted for accordingly. Mrs. Milbourn thereafter returned with her children to the home of her parents at San German, Porto Rico.
The attack which resulted in the death of these two brave and efficient officers took place at Las Mat as, in the district of Azua, August 6, 1906, and was led by two of the most notorious smugglers of the frontier. Immediately after the commission of the crime the guilty parties separated and secreted themselves in the mountains of Santo Domingo and Haiti.
The two leaders were, however, captured in Haiti, extradited therefrom, and are now in prison awaiting trial at this capital. The capture of the others, known to have been implicated, has as yet been impossible, owing to the nature of the country in which they are supposed to be hiding, but the assurance of the Dominican Government is pledged that pursuit will not be abandoned until all have been brought to justice.
[Page 339]revenue-cutter service.
As stated in last year’s review, the customs service was found without water transportation of any kind, and the long coast line of the Republic, with its many bays and inlets, offering excellent opportunities for smuggling, was entirely unprotected.
A more uniform application of the tariff law at entry ports and the closing of the frontier served to stimulate and make still more profitable the illicit trade carried on between the coasts of the Republic and adjacent islands, where duties are merely nominal. Merchandise formerly smuggled overland from Haiti was now brought around the coasts in small sailing vessels, and the smuggling from the free-trade British Turk group of islands, which has long been a regular feature of trade upon the north coast, was noticeably increased, with no means to intercept it or prevent the introduction of arms and ammunition.
To meet these conditions a temporary revenue-cutter service was established June 1, 1906. Four small sailing vessels were chartered and assigned to those districts most suspected of harboring smugglers.
The effect of this service was almost immediately noticeable through increased demands for merchandise at entry ports from places formerly supplied directly from abroad, but as the sailing vessels employed were not sufficiently dependable to accomplish their full purpose as revenue cutters their use only served to prove that smuggling by sea was appreciably affecting the revenues and that a permanent and efficient service was required to protect the coasts against illicit trade.
Therefore, after careful investigation of the subject, previously made, a contract was entered into June 5 with Mr. Lewis Nixon, of New York, by the terms of which he was to construct and furnish four suitable revenue cutters for that service.
The last of these cutters reached Santo Domingo December 23, all having demonstrated their seaworthiness by completing a stormy voyage in midwinter of more than 2,000 miles from New York without accident or damage. They are substantially built of steel, 75 feet long, 10 feet beam, 3 feet draft, propelled by 50-horsepower Standard gasoline engines, average speed 12 and maximum 14 knots per hour. Each is armed with one Hotchkiss 1-pounder rapid-fire gun forward and one Colt’s automatic .30-caliber gun aft. Their cost, delivered in New York, including armament and four gasoline-engine tenders, which were not included in the original contract, was $14,260 each, or $57,040 for the four. The cost of equipment and delivery at Santo Domingo, including insurance and all other items of that expense, as well as return transportation for the crews, amounted to $16,449.22, making the total cost of the four boats ready for service in Dominican waters $73,489.22, which it believed to be a very reasonable expenditure for the class of vessels received.
For revenue cutters of this size, at least, the gasoline engines adopted appear to have many advantages, especially in the Tropics, where the absence of artificial heat in the engine room is most desirable. The very small space occupied by these engines without boilers permits of more commodious quarters for the crew than would be possible in steam vessels of the same size. The most important advantage they possess for this service, however, is the fact that while the vessels are always ready to start at a moment’s notice no fuel is consumed [Page 340] except when actually running, which makes their operation much more satisfactory and economical than any other power that might be used in the regular cruising work required.
As gasoline costs about 20 cents per gallon delivered, and the consumption of these engines is but 0.84 of a gallon per mile at full speed, the fuel expense is less than 17 cents per mile. Also, with the use of this power a considerable saving is made in crews, as no firemen are required and work of keeping the vessels in proper condition is much lighter than it would be with the use of steam. Each vessel is easily operated by one captain and one engineer (Americans) and three Dominican sailors.
At the time these vessels were contracted for the Navy Department of the United States, upon request of the Dominican Government for such assistance, designated Naval Constructor William J. Baxter, of the New York Navy-Yard, to inspect them during construction, in order to insure compliance with the specifications. Owing, however, to the distance from the Republic at which the vessels were built, it was found necessary to call upon that officer for much greater service than was originally requested, and in fact to depend upon his aid and advice throughout during their building and delivery. The additional work and responsibilities involved were assumed by Captain Baxter without hesitation, and it is therefore largely due to his experience and courtesy that the vessels were received in satisfactory condition and without unnecessary delay. For these services the Dominican Government expressed its thanks through proper channels.
The grateful acknowledgment of the Dominican Government and this service is also clue to Mr. Paul S. Carter, purchasing agent for the Philippine government, under the Bureau of Insular Affairs, War Department, in New York, who, without compensation, devoted much time and labor to equipping and outfitting these vessels and getting them started from New York with suitable crews. This special work is, however, only a part of the assistance rendered by Mr. Carter, who has continually extended the courtesies of his office to this receivership since its establishment.
The permanent revenue-cutter service of the Republic was established with these new vessels in commission January 11, 1907, the sailing vessels formerly employed having been released at the end of 1906.
Regulations for said service were prescribed and published in “Revenue-Cutter Service Orders,” Nos. 4 to 12, inclusive.
For administrative purposes the coasts of the Republic were divided into four coast-inspection districts, as follows:
- (1)
- Monte Christi, extending from the Haitian line on the northeast to Puerto Plata.
- (2)
- Sanchez, from Puerto Plata east and south to Cabo Engaño, the eastern point of the island.
- (3)
- Santo Domingo, from Cabo Engaño south and west to Punta Palenque, upon the south coast.
- (4)
- Barahona, from Punta Palenque south and west to the Haitian line at Perdenales.
One coast district inspector and a cutter was assigned to each of these districts, with headquarters and supply stations at the ports indicated by the names of the respective districts, where they are in telegraphic communication with the capital. Their duties are to [Page 341] patrol the coasts for the purpose of assisting in the enforcement of the revenue, navigation, and coastwise trade laws of the Republic, and they should prove efficient agents in suppressing ordinary smuggling, as well as in preventing the introduction of arms and ammunition, and thus in maintaining the peace of the country.
Table No. 12 of Exhibit A and Exhibit H contain the details of the organization, expenditures on account, and estimated expenses of this branch of the service.
supplies and property.
Owing to the impossibility of obtaining in Santo Domingo many of the articles and supplies required by the different branches of this service, and with a view to meeting those needs with the greatest economy and the least delay, and at the same time securing proper charge of the expense to the particular office or department for which it might be incurred, a supply department has been established in connection with the central office of the receivership, in which is kept a stock of such official supplies as are regularly required for the service. The articles acquired for this supply department are bought through the purchasing agent for the Philippine Islands, Bureau of Insular Affairs, New York, who has rendered that service without expense to this office for his assistance. Being for the use of the Government, they are entered free of duty, and the cost price charged to a regularly designated supply officer, who issues them to the several departments and offices as needed and applied for, at the same price paid, receiving credit accordingly.
This disposition has resulted in a double economy, because by purchasing the supplies in quantities for the entire service the advantage of wholesale prices is gained, while the different officers making-use of them realize that the cost of each article requisitioned is a direct charge against the expense of their respective offices, which has prevented the waste usually attendant upon the promiscuous issuance of supplies paid for as a whole by a central office without reference to their distribution.
Since the organization of the receivership unexpendable property to the value of $65,129.40 has been purchased, and taken up upon the property records of the central office, which show the disposition thereof, and are supported by the receipts of the accountable officers. In view of the fact that a considerable portion of this property has been in use upon the frontier, where conditions have not been favorable to its protection, it is worthy of note that less than $200 represents the value of all articles lost or destroyed to date.
Practically all of the property and supplies purchased during the past year have, by special courtesy, been paid for through the Bureau of Insular Affairs, War Department, by Mr. A. T. Ruan, its disbursing officer, with funds furnished by this office, for which valuable and gratuitous assistance the Dominican Government and this receivership are greatly indebted.
administration.
The principal obstructions to the uniform application of the tariff and prompt collection of the duties are the provisions of the customs administrative law with respect to appeals and payment of duty.
[Page 342]Under the present system payments of duties exceeding $500 upon single importations are not required until from ten to thirty days, according to amount, after the liquidations have been made, although the merchandise is delivered under bond as soon as inspection has been completed.
If the importer objects to the classification or assessment made by the examining officer he is entitled to an appeal directly to the customs court, and to withhold payment until his case is decided. This procedure furnishes two reasons for the extraordinary delay encountered in collecting the revenue: First, the court is usually six months to a year behind in its work; and, second, as importers obtain immediate possession of their merchandise and pay the Government no interest on the amounts of their duties while cases are pending before the court, they are apt to take advantage of their right to appeal, manufacturing grounds, if necessary, in order to do so. Thus, payments of duties are often delayed long periods through force of circumstances, and many times merely for the purpose of saving the interest upon the amounts involved, which is in either event extremely confusing to the accounting department, and has in the past been the means of much fraud.
The customs court, whose decisions are final in all customs cases brought before it, is composed of the contador general de hacienda (auditor of the treasury) and four merchants. The auditor receives no additional compensation for acting as chairman, and the merchants no pay whatever for their services, hence, although the law requires them to meet once each month, and oftener if necessary, to perform their duties, the court has seldom convened during the past two years without pressure upon its members. But while it is difficult to obtain action by the court, that body is inclined to be tenacious of its prerogatives, and, having the supreme power in customs cases, to overrule decisions made by other authority.
Under these conditions it has been difficult to make great headway in securing uniformity of action or classification of merchandise at the various entry ports, especially as local customs officers are required by law to forward appeals directly to the court, whose decisions are seldom clear and frequently conflicting.
However, the plan adopted at the outset of requiring deputy receivers to forward samples of textiles, papers, etc., to the central office of the receivership for verification has resulted in much improvement, and greater uniformity in classification has been attained than was, under the circumstances, anticipated.
Thirty-six tariff decisions and rulings were made and published by this office during the year, and although many of them were contrary to the usage theretofore followed, but one has been overruled by the court. Other regulations and administrative orders have been issued and published in the form of circulars to the number of 76.
The Dominican interventors, acting as deputy receivers at the various ports of entry, have generally cooperated to the best of their ability for the improvement of the service, and, notwithstanding the difficulties presented by the tariff and administrative law, have made considerable progress in systematizing the work of their offices.
Exhibit M, annexed, contains extracts from the annual reports of these officers, received prior to the closing of this review, and show to some extent the local conditions at the various ports from which they were submitted, as well as the needs of the service.
[Page 343]All customs officers of the Republic agree that both the tariff and administrative law must be revised before the work of the department can be properly systematized.
customs receipts.
The customs receipts of the Republic during the second year of inspectorial supervision by the receivership ending March 31, 1907, were $3,181,763.48, against $2,502,154.31 for the previous year and $1,852,209.54 collected during 1904, showing increases of 27 and 72 per cent, respectively, over those comparative periods and being more than double the average annual collections theretofore.
Of the total increase in collections over the year ending March 31, 1906 amounting to $679,609.17, 95 per cent, or $657,584.14, represented increased receipts from import duties, which aggregated $2,683,139.44, against $2,025,555.30 collected during the previous year, when they reached two millions for the first time.
The import duties collected represent 66.5 per cent of the total value of imports, a gain of 2.5 per cent over the percentage collected during the preceding year, which indicates to a considerable extent the progress made in securing the uniform application of the tariff.
Export duties were increased $27,435.79; miscellaneous collections and personal fees yielded slightly larger returns, while port dues showed a falling off of $7,712.99.
As indicated by Table No. 4, Exhibit A, each of the 11 entry ports of the Republic contributed its share to the general increase, ranging from 19 per cent to 1,523 per cent and averaging, according to the total receipts, 27 per cent over the previous year. The same table also shows that the largest increases in receipts occurred at those ports through which merchandise is usually imported for distribution in the interior, namely, Azua, Monte Christi, Puerto Plata, and Sanchez. This is true because, the Haitian frontier being no longer open to smuggling, the interior is now receiving its importations through the Dominican seaports which should naturally supply it.
Tables Nos. 3, 4, and 13 of Exhibit A, annexed, contain the details of all customs receipts by months, ports, and soucres, and Exhibit C, for comparison, the customs receipts by years since 1867.
dispositions and expenditures.
Although the year’s transactions have resulted in diverting $238,205.17 more from the two principal objectives than was diverted from those ends during the year ending March 31, 1906, the larger receipts have increased the sums available for both the current expenses of the Government and segregation on account of the public debt.
Thus, the amount paid the Dominican Government, representing 45 per cent of the gross divisible revenue, was $1,329,107.83, as against $1,087,314.86 for the preceding year, an increase of $241,792.97, which advanced the average monthly payments from $90,609.57 last year to $110,758.98 during the year just ended. (See Table No. 5, Exhibit A.) And the sum segregated for application to the public debt was increased from $1,218,618.80 during the former to $1,418,229.83 for the present year, increasing the average monthly deposits with the National City Bank of New York from [Page 344] $101,551.56 to $118,185.82. The total sum set aside for this purpose during the last two years amounts to $2,636,848.63, which, together with the accrued interest, amounting to $52,741.29, makes the aggregate trust fund at the close of business March 31, 1907, $2,689,589.92. (See Table No. 6, Exhibit A.)
The largest addition to the diversions from these two principal purposes was the sum segregated under the act of Congress approved June 27, 1905, amounting to $99,573.24. This act, which was not jDut in operation by executive order until May 1, 1906, provides that 30 per cent of the actual export duties collected shall be denominated “internal revenue “and set aside for use by the Government in building or procuring the building of railroads, and the monthly sums set aside thereunder since May 1 have averaged $9,052.11. The full amounts so segregated have been paid by this office either in accordance with subsequent acts of Congress directly to contractors, or, upon orders of the executive, into the national treasury. (See Table No. 7, Exhibit A.)
The next most important additional diversion occurred through the establishment and maintenance of a revenue-cutter service, involving the purchase of four suitable vessels therefor, amounting to $90,014.21. (See Table No. 12, Exhibit A.).
And the expense of maintaining the frontier guard appears to be $34,306.14 more than for the previous year, but the expenditures incurred on that account, as shown by the records of this year, represent the expenses of twelve full months, while those shown by last year’s records covered but the first seven months after that organization had been established. (See Tables Nos. 1 and 11, Exhibit A.)
The disbursements made under the heading of “refunds, personal fees, and concession benefits,” item 1, Table No. 1, Exhibit A, and as itemized in Table No. 8 of the same exhibit, were also larger than last year, and represent (1) overpaid duties refunded in accordance with decisions of the customs court, (2) personal fees collected by customs authorities on account of port officials and delivered to them as provided by law, and (3) percentages of duties and charges collected by customs authorities at entry ports which, under special concessions having the force of law, accrue to the concessionnaires furnishing wharf, warehouse, and lighterage facilities, and to whom they were paid.
The total cost of collecting the revenues, including all expenses of the receivership, amounted to $105,102.06, as against $100,135.45 for last year, showing an increase of $4,986.61, which entirely represents increased expense at entry ports attendant upon handling the greater volume of business transacted.
The proportion of increase of expense, however, did not keep pace with the advanced receipts.
In ascertaining the cost of collection this year, all items of expense incident to the maintenance of the customs service and receivership, including the expense of employees traveling under orders within the Republic and to and from the United States, were taken as the basis, from which it is found that the cost of collecting each dollar received was $0.033, or about seven-tenths of 1 per cent less than the cost of collection last year, computed upon the same basis. In this connection reference is made to the consolidated statements of receipts and [Page 345] expenditures for the two years contained in Exhibit B, annexed, showing the method of computation and, separately, the percentage of the revenues expended on account of the usual customs organization, and the receivership as distinct therefrom. These statements also show that while the sum expended on account of the customs organization was increased, the expenses of the receivership were slightly less than during the preceding year.
In view of the number of ports maintained and the fact that several of them barely collect enough revenue to cover their expenses, the small average percentage of expense is particularly noticeable, being less than the average cost of collecting the customs revenues in the United States or any of its island possessions.
Exhibit A contains an analysis of the customs receipts and expenditures of the present as compared with those of the former year, and shows the methods pursued in dividing and disbursing the revenues received.
summary of commerce.
The commercial statistics of the Republic are compiled with reference to calendar years, because such periods represent, more closely than would any others that might be taken as a basis of review, completed years of agricultural operations, which are the foundation of the country’s commerce.
That the calendar year 1906 was one of advancing prosperity to the Dominican Republic, as a whole, is attested by the fact that its industrial and commercial activities during that period have surpassed those of any previous year in the history of the country. Both its production and consumption were increased to a marked degree.
The general application of the revenue laws furnished the Government with the necessary funds to make many needed improvements, especially in the building of roads. Substantial private enterprises, particularly in agriculture, were generally successful and enlarged in scope. Notable progress was made in every branch of commerce toward orderly and natural business conditions. More people were employed or engaged in profitable labor than ever before, and the resulting increased demand for supplies stimulated both internal trade and foreign importations.
The total value of the foreign trade of the Republic during the calendar year 1906, not including imports and exports of gold, silver, and paper currency, was $10,601,815, an increase of approximately $1,000,000 over 1905, which exhibited a greater volume of business than any other year up to that time.
The value of merchandise purchased abroad and imported was $4,065,437, against local products exported to the value of $6,536,378, leaving a balance of trade in favor of the Republic of $2,470,941.
The credits resulting from this accumulating balance enabled the Government to deposit abroad during the year, without the exportation of currency, $1,476,116, to apply on the public debt. In addition to this the volume of American currency circulating in the country was increased by the net importation of $208,406, leaving still an apparent foreign credit in favor of the Republic, as a result of the year’s transactions, of $786,424.
[Page 346]All of the principal local products were increased, both in quantities and values, over those of preceding years, except sugar, which, although the output exceeded that of 1905 by 7,781 tons, suffered a considerable decline in value.
Thus, while the exportations of 1905, aggregating 47,309 tons, yielded an average net price of $3.10 per hundredweight, or a total of $3,292,470, the 55,090 tons shipped during 1906 netted but $1.93 per hundredweight, or $2,392,406 for the entire exportation, showing a decrease in value for the larger quantity exported during the latter year of $900,064. This served to offset the gains in values of the other products shipped, and reduced the total value of exports to $6,543,872, as against $6,896,098 exported during 1905, a net decrease of $352,226. And as almost the entire sugar exportation was, as usual, to the United States, the principal decrease in export values, amounting to $734,987, is shown in the products shipped to that country, while it continued to receive by far the greatest quantity of products exported, and more than half the entire values produced.
The production of cacao showed a continued steady increase and a gain for the year of approximately 3,000,000 pounds, the total exportations reaching 14,295 tons. The general prices obtained for this product have also been good, netting an average of slightly more than $7 per hundredweight and advancing until at the close of the year it was in good demand for export at $11 per hundredweight, placing it, for the time, at the head of the list as the country’s product of greatest value. And, in view of the peculiar suitability of the climate and soil to the production of the highest grades of this article, which has as yet received comparatively little attention, as well as the growing demand for it as a staple both in Europe and America, it seems destined to take its place permanently as the most valuable and profitable product of the Republic.
The production of tobacco leaf, bananas, coffee, hides and skins, wax, and dyewoods was also considerably increased, and the prices received generally higher than those of 1905, as shown by the annexed comparative tables.
The most striking feature of the year’s trade is the marked increase in imports, which were considerably larger than those of any preceding year, consisting almost exclusively of staple merchandise and food supplies, and indicating a greatly increased purchasing power on the part of the general public.
The total value of imports, exclusive of currency, was $4,281,337, against $2,736,828 during 1905, showing a net increase of $1,328,609, or 49 per cent over the comparative period, which was the record year of the Republic in general commerce and imports up to that time.
Of this increase in trade the United States received $685,938, consisting of larger purchases in that country of general merchandise, but especially of cotton goods, which were more than doubled. Increased purchases were made in Germany to the value of $382,676, considerably more than half of which represented increased rice importations. Great Britain enjoyed an increased trade to the extent of $160,143, consisting almost entirely of larger sales of cotton goods. The importations from France were increased 25 per cent, or $59,196, and those from Spain $50,315, doubling the trade with the latter country. Other changes in trade of less importance took place, as shown by the annexed tables.
[Page 347]The total values of commercial transactions of the Republic with foreign countries during 1906 were distributed as follows:
| Countries. | Values. | Percentage of the whole. |
| United States | $6,352,707 | 57.8 |
| Germany | 2,923,942 | 27 |
| France | 771,916 | 7.2 |
| United Kingdom | 572.714 | 5.2 |
| Spain | 93.732 | .9 |
| Italy | 50,842 | .5 |
| Cuba | 47,751 | .4 |
| Porto Rico | 32.936 | .3 |
| All other countries | 78,669 | .7 |
| Total | 10,825,209 | 100 |
imports.
Trade in ordinary textiles, miscellaneous hardware, foodstuffs, and other similar merchandise of first necessity made up the greater part of the importations of the year.
The aggregate declared values of cotton goods, manufactures of iron and steel, rice, wheat flour, provisions (including meat and dairy products), oils, manufactures of vegetable fibers, fish and fish products, and articles of wood and leather manufacture, of relative importance in the order enumerated, constitute 74. per cent of the total value of imported merchandise, the remaining 26 per cent being represented by that of miscellaneous articles of every nature.
Imports under the leading class—cotton goods—were invoiced at $1,136,358, as against $552,774 for 1905, the increase having been due principally to larger receipts from the United States and Great Britain.
In manufactures of iron and steel, the United States, while furnishing more than half of the total values imported, showed a decrease in its shipments from those of 1905, although the purchases in Great Britain, Germany, and France were increased in considerable proportions. The total value of importations under this heading was $774,200, of which $283,561 came from the United States, $86,789 from Great Britain, $57,161 from Germany, and $34,736 from France.
Rice was the principal food product imported during 1906, and the amount received during the year—18,874,116 pounds, invoiced at $370,668—shows an increase over importations of the same commodity during the previous twelve months of 8,857,000 pounds. Of this increase, practically all came from Germany, which furnished 15,390,595 pounds of the total importation, while the remainder was divided principally between the United States and Great Britain.
The United States supplied substantially all of the flour imported, consisting of 58,622 barrels, valued at $250,390, as against 41,172 barrels imported during 1905, at a cost of $208,968.
The same country led in furnishing the meat and dairy products, the value of these purchased from that source having been $117,546, or $35,512 in excess of that of the previous year. The values of provisions from Germany, France, and Porto Rico of this class also show an increase; the total value of meat and dairy products having been $226,855, as against $138,195 during the comparative period.
The United States was, as usual, the principal source of the mineral-oil supply, which reached a value of $202,378, or 38 per cent over [Page 348] the invoice value of receipts therefrom during 1905. Spain’s trade in olive oil increased from $2,013 to $7,738, while the value of the oil trade with the United Kingdom, France, Italy, and “other countries “was a little more than that of the previous year.
Manufactures of vegetable fibers purchased by the Republic from other countries consisted mostly of bagging, in which to export local products, and cordage, invoiced at $149,027, against $85,721 for 1905. Formerly the United Kingdom controlled the largest portion of this trade, but during 1906 the value of fiber manufactures received from that country was slightly decreased, as well as that from France, while the values of such importations from the United States, Germany, and Spain were more than doubled for each country.
Among the imported foodstuffs consumed were comparatively large quantities of fish and fish products, the bulk of these being salt and dried fish from the United States, the value of which was $126,299, or $16,844 more than for 1905. The contributions of Germany and France to this class were also increased, but the importations from those countries are not as yet relatively important.
The aggregate value of manufactures of leather received from all sources was $118,579, as against $72,964 during 1905, the increase being due to larger receipts from nearly all countries furnishing these goods, but more especially to those from the United States, the value of which was $101,833, an increase of 68 per cent over that of the previous year.
The United States also furnished most of the wood manufactures, as was the case in 1905, the shipments therefrom being valued at $95,780 out of a total of $110,925. The remainder was supplied principally by Germany. The manufactures included under this heading consisted mostly of barrel heads and staves, and box shooks, used for export packing.
The remainder of the merchandise imported during 1906 was of a miscellaneous nature and minor importance, distributed throughout some thirty different classes of articles, as may be seen by reference to the accompanying schedules. The largest proportion of this came from the United States, although Germany as usual led in the values of malt liquors, woolen goods, and china ware supplied; Spain in dried fruits and nuts; Italy in hats and caps; and France in wines and liquors.
exports.
The principal products sold to other countries were, in the order of their relative value, sugar, cacao, tobacco, bananas, coffee, hides and skins, wax, tropical hard woods, and raw materials for drugs and dyes. The 123,401,271 pounds of sugar exported, with an invoice value of $2,392,406, was nearly all destined to the United States, the total shipments to that country aggregating 117,491,975 pounds, declared at $2,291,527. Of the remainder, 1,754,175 pounds were sent to the United Kingdom, 801,876 pounds to Germany, 304,605 pounds to France, and smaller quantities, aggregating 348,640 pounds, to various other countries.
Cacao beans valued at $2,262,912, representing shipments of 32,022,460 pounds, were exported, of which 17,502,961 pounds went to Germany, 9,821,512 pounds to the United States, and the remainder to France.
[Page 349]The total quantity of tobacco exported amounted to 14,965,799 pounds, with a valuation of $837,057, all of which was divided between the three countries named, as follows: Germany, 8,946,053 pounds, declared at $528,897; the United States, 3,746,162 pounds, at $189,279; and France, 2,273,584 pounds, invoiced at $118,881.
Practically all of the 669,100 bunches of bananas shipped, and invoiced at $334,005, went to the United States.
There were 2,916,727 pounds of coffee exported, with a declared value of $220,051. Of this 1,562,193 pounds, invoiced at $98,997, went to Germany; 569,215 pounds, at $50,030, to France; 564,291 pounds, at $49,556, to the United States; and 86,608 pounds, at $7,957, to Cuba; the remainder, in all 134,442 pounds, valued at $13,511, having been distributed in small lots among all “other countries.”
Hides of goats and cattle declared at $150,440 were sold abroad, principally to the United States, Germany, and France; shipments thereto having been declared at $78,335, $60,849, and $7,521, respectively.
The value of the 514,825 pounds of wax shipped was $125,599. Of this product 281,288 pounds went to Germany, 154,233 pounds to the United States, 65,584 pounds to France, and to all “other countries “13,720 pounds.
Shipments of tropical hard woods were made to the United States aggregating in value $27,773, while smaller consignments were generally distributed among the United Kingdom, France, and “other countries,” making the total value of woods exported $72,859.
The remainder of the total declared value of exports represented shipments of cattle, $12,359; materials for the manufacture of drugs and dyes, $56,061; vegetable fibers, $20,630; honey, $15,985; and of cocoanuts, $5,814; as well as of many other minor tropical products itemized in the annexed tables.
foreign tonnage.
The maritime movements by means of which the year’s foreign commerce was effected were represented by 1,538 entrances and clearances at the eight seacoast entry ports of the Republic, of vessels having an aggregate tonnage of 1,656,002 tons.
nationality of vessels.
Import cargoes valued at $2,445,429, or, say, 57 per cent of the total value of imports, were brought in American bottoms; values to the extent of $1,308,338, or 32 per cent, were carried in German; $272,111 in French; $95,680 in British; and $55,421 in Norwegian vessels. Cuban, Dutch, and Dominican ships brought cargoes to the value of $29,628, $13,316, and $11,246, respectively, while the remainder of the receipts were distributed among vessels of various other nationalities.
Export cargoes to the value of $2,102,519, or 32 per cent of the total value of exports, were transported by vessels sailing under the German flag. The export values carried in American vessels amounted to $2,091,480, also approximately 32 per cent of the whole. Norwegian steamers received cargoes aggregating $1,412,623 in value, or 21 per cent; while French ships obtained freight invoiced at $579,723; British, $311,931; Dutch, $23,496; the remainder of the exports having been shipped in Dominican vessels.
[Page 350]coastwise tonnage.
In the coastwise trade 6,657 entrances and clearances were recorded at the various entry ports of the Republic, representing a total tonnage movement in the local trade carried on by Dominican vessels thereat of 122,219 tons.
Seventy-four per cent of this trade was carried on by small sailing vessels and the remainder by steamers of less than 60 tons burden.
This branch of commerce has increased in activity to meet the advanced requirements of the country.
The details of the foreign trade of the Republic during the calendar year 1906 are shown by Exhibit J, annexed.
reports.
Since the organization of the receivership statistical reports of receipts and expenditures, and accountable returns accompanied by complete debit and credit vouchers, covering all receipts and disbursements, have been submitted monthly to the Dominican Government and copies thereof transmitted to the honorable Secretary of War of the United States. Comparative consolidations of these reports showing the results of all customs and other transactions of this office during the last two years are annexed as Exhibit B.
Property returns showing all property purchased or acquired by the receivership, its disposition and condition, have also been rendered this Government, and the corresponding records supported by proper documents maintained in the central office.
Two annual reports, covering all transactions of the customs receivership during the periods to which they pertain, have been submitted to the Dominican Government, and two annual reviews of the service, including the present, have been prepared for record.
Five statistical summaries of commerce of the Republic have been compiled, the first two having been published and distributed in separate pamphlets, printed in Spanish and English, and the last three published by the Bureau of American Republics in connection with its monthly bulletin.
organization and personnel.
The organization of the receivership has remained substantially the same since its establishment in April, 1905, although the personnel has been changed from time to time as the exigencies of the service or personal necessities have required.
Exhibits D and E, annexed, contain the details of the present organization, as distinct from the usual customs department, and the personal records of those employed therein, as well as the changes that have taken place in the past year.
The personnel of this service has generally been active and efficient, while the thirteen American citizens employed in connection with the receivership—six of whom are attached to the central office and the remainder, including those assigned to the Haitian frontier, constitute the outside force—have each of them, in his own sphere, rendered independent, earnest, and capable service beyond the premises of ordinary compliment.
Controller and General Receiver.