File No. 839.51/1648.

Minister Russell to the Secretary of State.

No. 22.]

Sir: Referring to my No. 13 of the 29th ultimo, I have the honor to report that the financial situation is still in a hopeless state. I have had several interviews with the Minister of Finance, who is a very upright man, sincerely intent upon reforms, and whom, under different circumstances, it would be good policy to aid.

The receivership pays to the Government as its share of customs receipts $28,000 weekly on account of the sum due at the end of the month. One quota of $28,000 was paid on the first of the month and a similar quota is to be paid to-day. The deputy receiver general states that the amount due the Government for this month can not fall below $125,000, at the lowest, so that with the four weekly quotas of $28,000—$112,000—the Government would still have due it at least $13,000 at the end of this month. The Minister of Finance requested the deputy receiver, in line with this method of payment, to advance to-day three weekly quotas of $28,000 instead of one—this for the purpose of paying salaries due in the Cibao, and making payments to senators and congressmen, who it is stated will not come to the capital unless paid. The deputy receiver called to [Page 329] see if I could not have these advances approved. I advised him to take no such action without special instructions, as I was sure that the State Department would not approve.

The Minister of Finance says he is reasonably certain that Congress will adopt his plan of reforms, but there is grave doubt of this.

The amount of the Government’s share of the customs receipts for September was $138,000; for October, $139,000; so that the amount of $125,000 as probably due at the end of this month is reasonably safe.

If a loan is approved by Congress, from which is to be paid salaries in arrears, it is a question as to whether this will result in a benefit to the country. Speculators, among whom figure prominent political personages, have bought up these salary accounts at a very high rate of discount, so that money paid on this account will go into the pockets of these speculators who are expecting a loan for this very purpose. So that as urgent as is the need of money the approval for a loan might not bring relief to the people, and unless Congress enacts the necessary laws for retrenchment and reform, and there is complete control of the disbursements of the Government, history will repeat itself and the same conditions will be continuously arising.

I have [etc.]

William W. Russell.