File No. 839.51/1633a.

The Acting Secretary of State to Minister Russell.

No. 139.]

Sir: The Government of the United States is anxiously concerned over the present unsettled conditions, both political and financial, in the Dominican Republic. This Government, by reason of the obligations assumed and by virtue of the authority given under the provisions of the convention concluded on February 8, 1907, is particularly interested in the material progress and welfare of the Dominican Republic and to that end is most anxious to secure the early reestablishment of a permanent peace throughout the country.

The two or three years following the enactment of the Dominican convention in 1907 seem to have passed without a violation on the part of the Dominican Government of clause III of that convention. Since 1910, however, it appears that the exigencies of the conditions in the Republic to which you are accredited have gradually caused first one of its administrations and then another to disregard the provisions of clause III of the solemn covenant entered into between the United States and the Dominican Republic. The Government of the United States, finding the administration of affairs at Santo Domingo in a deplorable condition, towards the close of 1912, was compelled to [Page 322] send delegates from this Department and that of War, Mr. Doyle representing the former and General McIntyre the latter, to compose the differences of factional leaders.11 The result of their friendly good offices was that Archbishop Nouel became President.

Before this event the Dominicans had incurred by degrees a relatively large indebtedness entirely without the consent of the United States and in absolute contravention to the terms of the convention. The Government of the United States finally gave its approval, with reluctance, to an increase of a million and one-half dollars of the public debt of Santo Domingo, because it was thought that the Nouel administration could not survive unless it repaid those to whom money was due.

It seems to have been represented that one and one-half million dollars would suffice to pay the current debts of the Dominican Republic at that time. This proved to be untrue. The payment of certain accounts, and the ignoring of others resulted in hard feelings on the part of those unpaid and in severe criticism of the Bordas government, which followed the short-lived administration of Archbishop Nouel.

Again, in 1913, this Government studied the Dominican problem with especial care and deep interest and sympathy. Governor Osborne, First Assistant Secretary of State, was Charged with the duty of calling the attention of the administration of José Bordas Valdés to the necessity properly to respect and to live within the terms of the convention. To his representations, Governor Osborne received assurances that the Dominicans would accommodate expenditures to revenues, and that they would faithfully observe the terms of the convention.

Within a few months after the visit of Governor Osborne, it became only too apparent that there was general carelessness and improvidence in all financial matters; that the Bordas administration, without obtaining the consent of the United States, was increasing its indebtedness on every hand in an alleged effort to put down a revolution; and that the salaries of Government employees were not being paid, which caused so much discontent as to threaten the stability of the Bordas régime.

Seeking a remedy for these distressing conditions, the United States, after careful consideration, became convinced that a regular payment of salaries to all employees of the Government would go far to remove the odium to which officials of the Bordas Government were becoming subjected, and thus allay, if not prevent, the armed protests which starvation and abuse were slowly forcing upon employees of the Government. For this purpose, the United States viewed with favor a suggestion to secure for the Dominican Republic some form of financial control, in the hope that thereby a remedy would result, at least in part, by securing an adjustment of expenditures to revenues. Actuated by the highest motives and in the belief that a competent financial comptroller would be of material assistance, the Department of State conferred freely with Mr. Peynado, the Dominican Minister to the United States, and later with Mr. Soler, who succeeded Mr. Peynado.

[Page 323]

These conferences and the many and extended communications passed between the Governments resulted in the appointment of a financial adviser to the Dominican Republic. So keen, however, was the rivalry between the various contending political factions, that no loan plan was approved at that time.

During eight months the financial adviser exercised his functions to the best of his ability and achieved the saving of considerable sums, in so far as it was possible, to the Government. Due to his active services, Government employees were regularly paid, but this novel condition did not obtain over a period sufficient to demonstrate whether an honest handling of public funds would permanently remove one of the main causes of factional strife.

The continuous state of internal disturbance which existed in the Dominican Republic from the time of the arrival of the financial adviser until the retirement of the Bordas administration (when the Provisional Government of Dr. Báez assumed control of that Republic), resulted in the failure to confirm or ratify the official recognition of the office of financial adviser.

Prior to the recognition of the Jiménes Government by the United States, Mr. Jiménes and Mr. Velásquez assured this Government that the appointment of the financial adviser would be ratified and, in addition to this, other assurances were given, but not respected.

Even so, the Department, anxious to cooperate with Dominicans in every proper way, received the commission which President Jiménes sent to Washington. In view of that body’s firm assurance that the Dominicans would live within their revenues, provided the office of financial adviser were abolished, the Department, in June, 1915, acquiesced in many of the suggestions submitted by the Dominican Executive through the special commission, which visited Washington in that month. Since the departure of that commission the Department has confidently expected that the Dominican Government would receive sympathetically, and respect in full, according to agreement, the indications of the receivership, to which by common consent the modified powers of the financial adviser had been transferred.

The Department has awaited the receipt of some plan looking to the adjudication and final liquidation of the very considerable current indebtedness which has been accumulating slowly under previous administrations and rapidly under the Jiménes administration, and it has naturally expected to be informed that the daily increase of this indebtedness had ceased.

To its surprise and deep regret, no favorable information has come to hand. From a variety of sources advices have been received that the Jiménes Government is increasing the indebtedness of the Dominican Government at the rate of from one to three thousand dollars per day. In addition to this it is alleged that the extreme peculations taking place in the collection of the internal revenues are being used largely to benefit politicians, while the civilian employees of the Government go unsalaried and unfed. So extreme does the struggle for a division of the spoils appear to be, that natural remedies, such as a loan, which, if properly used to defray current indebtedness, would be of very material value in the proper conduct of economic affairs, go unconsidered. It is said that the financial policy now pursued can but result in the Government playing into the hands of money lenders.

[Page 324]

The present current indebtedness is variously described at from five to seven million dollars. This staggering statement clearly indicates the existence of some fundamental improprieties in the present Government. If tribute is being paid to prevent those who otherwise would do so from starting revolutions, if the officers of the Jiménes Government are enriching themselves and leaving in want civilian employees of the Government, it can but be manifest that such a state of discontent will soon be reached as will threaten the very existence of the present administration.

Complaints against the Government of President Jiménes are general, incipient revolutions have been afoot for more than a month, and no adequate steps have been taken to provide the prompt measures necessary to quell those uprisings against the government, at their birth.

It is, therefore, evident that since 1910 there has been a continuous violation of the provisions of the convention of 1907, especially in that part which reads:

Until the Dominican Republic has paid the whole amount of the bonds of the debt its public debt shall not be increased except by previous agreement between the Dominican Government and the United States.

In direct contravention of the foregoing solemn undertaking, the Dominican debt has been increased by some seven millions of dollars. Closely associated with this regrettable failure to comply with treaty obligations, there has been a continual internecine struggle to obtain control of the Government and Government funds, which has resulted in a state of revolution so continuous as almost entirely to interrupt all national development in the Republic.

It is not amiss here to recall that in 1907 the indebtedness of the Republic amounted approximately to thirty million dollars, which through the good offices of the United States, was finally reduced to some seventeen million dollars. Twenty million in new bonds were then issued, which, with the four million in cash accumulated under the modus vivendi, enabled the Dominican Government to pay its adjudicated debt of seventeen million, purchase and extinguish certain onerous concessions at a cost of one and one half million, and provide a handsome surplus for public works necessary to rehabilitate the deplorable condition of the country. Since that time, aside from paying interest, the total of twenty millions has been reduced by some three and one half million; this reduction being accomplished by payments made under the convention, and through earnings thereon.

During this same time, and without achieving the least permanent good, the various administrations in the Dominican Republic have, in direct violation of the convention, increased the total debt of the Republic by about seven million dollars. It is, therefore, self-evident that should this procedure be allowed to continue, the life of the convention may be eternal, and the objects for which it was created and enacted, be defeated.

While this Government has recognized its perfect right to insist that the Dominican Republic should observe all the obligations of the Convention of 1907, especially those regarding the increase of the public debt and the obligation to give full protection to the general receiver, so that the free course of the customs should not [Page 325] be interrupted, it has now, for the first time, determined that further violations of the obligations of the convention, which the Dominican Republic freely assumed, shall cease.

The Department maintains that a strict compliance on the part of the Dominican Government, of clause III of the convention of 1907, in which the Dominican Government is prohibited from making any increase in its public indebtedness without the sanction of this Government, will constitute a most effective deterrent to all those who might contemplate the instigation of political disorders, to which the Republic has been subject for many years. The creation of a floating indebtedness, directly or indirectly, must certainly be interpreted as contravening the provisions of the convention of 1907. Failure to meet budgetary expenses, the appropriation of sums in excess of probable revenues, the purchase of supplies and materials no adequate provision for the payment of which has been made, are considered by this Department as a contravention of clause III and should be discouraged.

It is the opinion of the Department that the wisest course to be adopted to attain this end will be to secure the conclusion of an amended convention, more comprehensive than that of 1907.

If, however, it should become apparent that this cannot be accomplished, you will so report to the Department, and, after receiving the necessary instructions, you may then send to the Dominican Minister for Foreign Affairs a note setting forth the vital parts of this instruction, and render the interpretation of the Convention of 1907, as set forth in enclosure hereto, which should secure immediately the appointment of a financial adviser, and provide for the organization of an adequate customs guard or constabulary.

The Department intends to request the detail of an officer of Engineers of the United States Army, in the capacity of military attaché to your Legation, who will make a careful inspection of all public works heretofore constructed under American supervision, on which more than two and one half million dollars have already been expended, and who, after thorough examination into the needs of the Republic, will make such recommendations as in his best judgment seem most advantageous, for the employment of the remainder of the public works fund.

It is needless to point out to you the great interest taken by the President in the success of your present mission and the particular satisfaction it will afford should you meet with success in your endeavors to carry out the purpose of this Government to establish lasting peace and so to secure an orderly development of the natural resources of the Republic.

I am [etc.]

Frank L. Polk.


You may inform the Government to which you are accredited, that the United States interprets the convention of 1907 to give it the right:

To compel the observation of Article III of the convention in the appointment of a financial adviser.
To provide for the free course of the customs by the organization, on a much larger scale, of what is now known as the Dominican Customs Guard or by the creation of a constabulary.