File No. 639.003/32.
[Inclosure.]
The Minister for Foreign
Affairs to the American
Minister.
[Translation.]
Office of the Secretary of State for Foreign Relations
of the Dominican Republic,
Santo Domingo, August 3, 1911.
Book B. No. 239.]
Mr. Minister: I have the honor to
acknowledge the receipt of your excellency’s courteous communication
of July 7, No. 59, confirming the views contained in the memorandum
presented to my predecessor on April 11 last, in regard to the law
of July Z, 1910, creating the stamp tax, and the resolution of
Congress on the 8th of the same month approving and putting into
effect a municipal surtax on certain articles of import established
by the municipality of Santo Domingo.
I have examined carefully the points set forth in the above-mentioned
memorandum, a copy of which your excellency was pleased to forward
for that purpose, and I do not find in them a foundation for the
right which the United States thinks it has to criticize said taxes
from the viewpoint of article 3 of the Dominican-American convention
of February 8, 1907.
[Page 148]
The tax comprised wholly under the law of July 2, 1910, is
undoubtedly a particular and internal tax, whose nature and
collection are completely different from the nature and collection
of those provided for by article 3, which your excellency cites, and
consequently not within the reach of this article which refers
solely to duties purely from customhouses. A proof of this is that
the tariff schedule, in spite of that law, has remained intact.
To have the stamp taxes included under the provisions of article 3 it
was necessary to have been so specifically stated, which could have
been done had it been the common intention of the high contracting
parties, as the law referred to is nothing more than a reproduction
of the law of 1906 with some slight changes, which latter law is
anterior to the convention.
The position taken by the Government of your excellency leads to the
conclusion that the Dominican Government can not in any case, or in
any form, establish of its own free will taxes on articles from
abroad, which was not the intention of the convention, nor could it
have been, as there would have thereby been affected one of the most
essential rights of the sovereignty of the Dominican nation.
The reasons set forth above are applicable to the municipal surtax
alluded to, and of which it must be said in addition that it is not
a creation of the nation, nor is it collected in its name or for its
benefit. As a tax on consumption and for local uses it is the work
of the municipality of Santo Domingo guaranteed by the constitution.
The tax is collected in the name of and for the benefit of said
municipality and is applied exclusively to communal uses, and
consequently it is not confounded with, nor can it be, as far as the
convention is concerned, with national revenues which are the only
ones capable of being affected by national engagements.
So that: supposing the impossible case that the municipal tax is
customs tariff legislation, and that it was really created by the
Nation for its benefit, neither in that case is the Government of
your excellency right.
It is true that article 3 provides that for any modification of the
import duties of the Republic there must be a previous agreement
between the Dominican Government and the United States; but the same
article specifies the true reach of this provision, explaining
clearly the sense in which said modifications must be understood.
The letter and spirit of the convention demonstrate that said
agreement is only to be had in case the modification of import
duties causes them to be reduced to $2,000,000.
As the principal object of the convention is to guarantee with the
customs revenues the payment of the 5 per cent bonds, it was natural
that the United States should concern itself that said revenues
shoul not fall below a definite sum, and for this reason the
provisions of article 3 were established; but there is no rational
explanation for that provision when a modification leaves the
revenues intact in general or tends to augment them.
On the other hand, the municipal tax referred to is so small that
there is no danger that it will have any influence on the customs
revenues, as proved by the fact that far from being diminished said
revenues have increased, giving more guarantee, in consequence, for
the fulfillment of the obligations of the nation.
The position of my Government then is in direct line with the
provisions of the oft referred-to article 3. And even if there
should be any ambiguity or obscurity in said article the
interpretation would have to be made in conformity to that position
which is that which is in harmony with the right of sovereignty of
the Dominican Nation.
My Government, the best judge on the subject, is of the opinion that
the legislation referred to by your excellency, far from being
prejudicial to the best interests of the Republic, is a factor for
good, because with an increase in the revenues, no damages of any
sort being occasioned, the prosperity of the country is increased;
said revenues being applied with greater zeal and honesty to works
of common progress, as your excellency will see on comparing the
present state of the Republic with that of former years.
My Government hopes that your excellency, with your usual high spirit
of justice, will know how to appreciate in their just value the
arguments in favor of the Dominican Government in this case, and
consequently will not insist upon a discussion which as far as the
United States is concerned is at least lacking in interest.
The occasion is favorable for renewing, etc.
