File No. 839.51/1172a.
The Secretary of State to Minister Sullivan.
Washington, December 31, 1913, 5 p.m.
Your December 18, 2 p.m.2 In view of experience the $1,500,000 loan it would seem impractical to contemplate any loan that did not at least comprehend liquidating back salaries to date; possibly even such settlement would serve as only a partial remedy, resulting in a repetition of suspending payments of future salaries to meet other budget obligations.
Forward by mail a list of unpaid salaries to January 1, list of legitimate creditors now crowding Government for payment, and list of other unpaid items provided by budget. Department desires to make comprehensive study of financial situation and desires that you make specific recommendations regarding what you think necessary to put that Government on a basis where its budget can be actually met by the country’s revenues.
If the necessity for $1,500,000 loan was caused by eleven months’ revolution and not by the Government’s ordinary expenditures for maintenance exceeding its income, the question arises as to how the Government’s necessity to borrow $350,000, as stated in the memorandum of Savinon dated November 28, was caused. Since January 1913 the Government’s income has been reduced one thousand dollars a day which goes as interest and amortization for million and a half loan. Peace reigned until September 1, 1913. Is Department to understand that during this period of peace the Government accommodated its expenses to its income, and that the present shortage is occasioned by diverting salaries since September 1 to the uses of war which existed only during September and October?
[Page 194]If figures prove the reduction by one thousand dollars per day of Government’s income was met by a corresponding reduction in Government’s expenditures, it might seem that the additional ten thousand dollars per month offered as a monthly payment (Peynado suggests this be taken from customs collections) to return the desired loan could be separated without seriously affecting the Government’s meeting its budget; otherwise some further guaranty might be required. As approval of Dominican Congress would be necessary you will please rush the information asked for, so the Department may promptly consider some practical remedy.
Peynado assures Department that his Government will be glad to afford this information. As the Department desires to give most sympathetic consideration to needs of Dominican Government it would be glad to receive a statement of that Government’s views on the various points here indicated and an expression of its opinion as to practical remedies for the present situation. Furnish also a copy of its last approved budget and any new budget under consideration.