File No. 839.51/1664.

Minister Russell to the Secretary of State.

No. 30]

Sir: I have the honor to inform you that soon after the President’s return to the capital I had an interview with him on the subject matter of the note I presented to the Government on the 19th of November.14 The whole country had been flooded with exaggerated reports as to our demands and anti-American feeling ran high. The Minister for Foreign Affairs had refused to give information to the press or public as to the contents of the note, and his reticence gave rise to all sorts of rumors circulated for political purposes. Patriotic meetings were held in the North and societies formed for the purpose of exciting the people to prepare themselves against the foreign invader.

The President had been informed from here of the presentation of the note, and he telegraphed General Horacio Vasquez to come to the capital to consult on “grave affairs.” Vasquez arrived here and was given a tremendous ovation, and “down with the Yankees” was the slogan of the hour. General Vasquez requested an interview with me, which was given him, and he had a conference of two hours. He talked of the mal-administration of President Jiménes and the necessity for an immediate change. I informed him of the attitude of our Government as per your telegraphic instructions, and he was more conciliatory. He said that he and his party were opposed to any revolutionary movement looking to the overthrow of President Jiménes, or forcing his resignation; that he was desirous of supporting the President, but that owing to the economic crisis he would insist immediately upon the reforms, suggested by our Government, consonant with patriotism.

Luis Felipe Vidal, the leader of the “legalistas” also had an interview with me, and talked of the impeachment of the President. His tone also changed when I acquainted him with the attitude of our Government.

[Page 333]

The President dwelt at some length upon the injustice of holding his administration responsible for the bad condition of the country and the financial deficit, when, as he stated, previous administrations were to blame.

I have been persistently regaled with dissertations on the bad faith of our Government in the matter of the incompetency of the American officials sent here in positions of trust. I have replied to all these complaints that the Government was not aware of these conditions, and that if the Dominican Government placed the matter before me I would bring it to the attention of the State Department and the question would be arranged. The President said that he would prepare a memorandum to be presented through the Foreign Office. I am waiting for this memorandum to forward with my report in connection therewith.

I am inclosing herewith copies and translations of the correspondence between this Legation and the Government in the matter of the note.

Congress is in session and is considering the new budget presented to it, which is some $300,000 less than the present budget.

The public debt, including nominal value of claims presented amounts to over $6,000,000 and the claims commission is still at work.

Excitement has subsided for the present, but the situation is difficult on account of the intriguing ambitions of the several members of the Cabinet.

I am [etc.]

William W. Russell.
[Inclosure 1.]

Minister Russell to the Minister for Foreign Affairs.

No. 14.]

Mr. Minister: In accordance with instructions I have the honor to say to your excellency that the Government of the United States is anxiously concerned over the present unsettled conditions, both political and financial, in the Dominican Republic. My 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 establishment 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, 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 send delegates from the Departments of State and War, Mr. Doyle representing the former and General Mclntyre the latter, to compose the difference of factional leaders. 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 [Page 334] 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, my 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 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 being subjected, and thus allay, if not prevent, the armed protest, 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.

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 the Dominican Republic), resulted in the failure to confirm or ratify the official recognition of the office of financial adviser.

Prior to the recognition of the Government of President Jiménes, by the United States. President Jiménes and Mr. Federico Velasquez assured my 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 of State, 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 assurances that the Dominicans would live within their revenues, provided the office of financial adviser were abolished, the State 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 of State 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.

[Page 335]

The Department of State 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 in 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 Government of President Jiménes 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’s inevitable bankruptcy.

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 has been paid to prevent those who otherwise would do so, from starting revolutions, or to quell incipient revolutions; if the officers of the Government of President Jiménes are enriching themsleves 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 Dominican Republic.

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 millions 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 my 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 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 of State 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 the Government of the United States, will constitute a most effective deterrent to all those who might contemplate the instigation [Page 336] 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 provision 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 the Department of State as a contravention of clause III and should be discouraged.

My Government therefore has decided that the American-Dominican Convention of 1907 gives it the right:—

To compel the observance of article III by insisting upon the immediate appointment of a financial adviser to the Dominican Republic, who shall be appointed by the President of the Dominican Republic, upon designation of the President of the United States, and who shall be attached to the Ministry of Finance to give effect to whose proposals and labors the Minister will lend all efficient aid. The financial adviser shall render effective the clauses of the Convention of 1907 by aiding the proper officials of the Dominican Government in the adjudication and settlement of all its outstanding indebtedness; devise and inaugurate an adequate system of public accountability; investigate proper means of increasing the public revenues and of so adjusting the public disbursements thereto that deficits may be avoided; inquire into the validity of any and all claims which may be presented against the Dominican Government; countersign all checks, drafts, warrants or orders for the payment of Dominican funds to third parties; enlighten both Governments with reference to any eventual debt and to determine if such debt is or is not in conformity with the convention of 1907; compose whatever differences may arise between the receivership and the Department of Treasury and Commerce, in which matters not requiring the intervention of both Governments are involved; assist the proper officials of the Dominican Government in the preparation of the annual budget and to aid them in correlating the governmental expenditures thereto; recommend improved methods of obtaining and applying the revenues and make such other recommendations to the minister of finance as may be deemed necessary for the welfare and prosperity of the Dominican Republic; provided, that the authority of the general receiver as described in article I, to collect and apply the customs revenues shall in no way be affected by this interpretation.
To provide for the free course of the customs and prevent factional strife and disturbances by the creation of a constabulary, which the Dominican Government obligates itself, for the preservation of domestic peace, security of individual rights and the full observance of the provisions of the convention, to create without delay and maintain. This constabulary shall be organized and commanded by an American to be appointed, as “Director of Constabulary,” by the President of the Dominican Republic, upon nomination of the President of the United States. In like manner there shall be appointed to the constabulary such other American officers as the director of constabulary shall consider requisite; also there shall be appointed by the President of the Dominican Republic, on the nomination of the director of constabulary, such Dominican officers as, in the judgment of the director of constabulary, may be desirable from the standpoint of efficiency. The Dominican Government shall clothe these officers with the proper and necessary authority and uphold them in the performance of their functions. The Dominican Government shall authorize for the constabulary such commissioned officers, and enlisted men (non-commissioned officers and privates) as the director of constabulary may deem necessary for the proper preservation of peace and order, within the Republic, and shall ratify and promulgate such regulations as to pay of personnel, enlistment, appointment and reduction of noncommissioned officers, discharge, discipline, etc., as the director of constabulary may recommend; provided that the President of the United States shall decide any question of regulation affecting the organization upon which the Dominican Government and the director of constabulary may fail to agree, and shall by agreement with the Dominican Republic fix the salary of the director of constabulary.

The constabulary thus provided for, shall, under the direction of the Dominican Government have supervision and control of the arms and ammunition, military supplies and traffic therein, throughout the country.

In regard to the financial adviser I will say to your excellency that my Government would prefer to have this office so established that it would not be in danger of being abolished by future administrations, but, in view of past experiences with the post of financial adviser, is willing to have his rights and duties vested in the receivership, provided that said receivership is properly [Page 337] authorized to exercise full budgetary control, and is given all the powers herein set forth in section “A.”

In insisting upon the establishment of the constabulary your excellency can not fail to see that its organization will afford ample protection to the constituted authorities at a minimum of cost, and will be subject to the control of the central Government, thus placing it beyond the domination of provincial administrators; and the maintenance of this constabulary will be less onerous and far more effective than the present system of the army and customs guard, and guardia republicana.

In requesting your excellency to give this matter your serious and immediate consideration,

I take [etc.]

W. W. Russell.
[Inclosure 2—Translation.]

The Minister for Foreign Affairs to Minister Russell.

No. 582.]

Mr. Minister: I acknowledge receipt of your courteous note No. 14 of the 19th of last month.

The President of the Republic on his return and after being acquainted with the contents of said note has instructed me to state to you as follows.

The Dominican Government has done everything in its power to avoid and later suppress disorders which have given rise to expenses and a consequent unstable condition of public finance to which your excellency refers in said note. It avoided said disorders with a due regard to the laws, guaranteeing to each citizen his rights, although some were making seditious use of said rights.

Disorders were repressed by detaching armed troops to combat the rebellion and succeeded in putting it down completely. But the Dominican Government, like any other government in the world in like case, could not prevent that public disorder and the sacrifices made to re-establish order were burdensome to the public finances and even interrupted the orderly march of institutions and the collection of internal revenue.

So sincere has been the purpose of the Dominican Government to rectify these irregularities and adopt a program of strict organization in all branches, that the increase in the frontier guard and the decree lately issued in regard to arms and ammunition are giving those satisfactory results that were looked for, administratively as well as politically.

It is not the Government’s fault that the enemies of public peace, in less than a year, raised the standard of revolt on three different occasions, requiring the use of resources and energies which it was always the purpose to apply to the development of the great interests of the country.

Public order disturbed, the prime duty was to restore it. Without peace there is no progress, nor welfare, nor organization. Proof of all this was the offer which, through your Legation, the American Government made, months previous, an offer which the Dominican Government appreciated but which it could not accept. And this, because each nation has what might be called its national criterion, and it is indisputable that ours, still very young, looks always with the greatest fear on all interference which later may bring vexatious questions in regard to its sovereignty.

After the termination of the civil war, which undoubtedly gave rise to involuntary irregularities in the carrying out of the “Law of public disbursements”; on account of the supreme obligation and the unavoidable necessity to restore peace the Dominican Government has devoted itself in an unequivocal manner to the task of strengthening, not only the political conditions, but also the economic and financial conditions of the Nation. For that purpose Congress was called and there has been submitted to it a project of a “Law of public disbursements” consonant with present revenues, and there will be shortly other projects of law also submitted, all tending to restore financial normality, as the Government not only desires to bring this about, but also sees the imperious necessity of its accomplishment, as it is well aware that stability [Page 338] does not arise from armed forces, but from the harmonious march of all the healthy activities of the country.

The answer which Don Juan I. Jiménes and Don Federico Velasquez y H., chiefs of the coalition parties, gave to the Honorable J. C. White prior to the taking of the oath of office by the former, carries with it the assurance of continuing to respect the acts of former Governments, as they thought then and consider to-day that the Power cannot be considered as continuous.

As a proof of such an affirmation and in view of the fact that the creation of the office of financial expert lacked legislative sanction, the present Executive Power submitted to Congress, with its observations, a bill relative to this matter.

When the present Government was inaugurated a financial instability existed. In addition to the large expenditures in the administration of General Jose Bordas Valdés, and of the four million dollars of stamped paper which had disappeared from the National Treasury, the present Government found that the administration of Dr. Báez had left a deficit of $269,609.34 due the public works fund, and also $100,000 for salary due Government employees. This brief statement will be opportunely amplified by an explanatory communication which will give a true statement of the public debt and will show your excellency that the present Government cannot be charged with the responsibility in the matter, and show at the same time how exaggerated has been certain data which it appears has been submitted to your excellency.

It is perfectly well understood that the convention is a treaty, is an international law which fixes with precision the duties of each one of the contracting parties.

The present administration aspires to maintain itself within its provisions and-calls attention to the fact that the irregularities caused by the maladministration of previous governments and of the three revolutions that occurred during this administration, have in no wise affected the service of the public debt, which is religiously paid, and the bonds maintain a value in foreign markets which emphasizes the seriousness with which international agreements are carried out.

For the reason that it is not likely to bring about the end desired, the Government does not acquiesce in the suggestion of your excellency to secure the reestablishment of the office of the financial expert, eliminated by agreement between the two Governments after the Washington Government heard the statements of the Dominican commission. The financial expert serves no useful purpose because, even though his work should be advantageous for the one side, on the other side it would constitute a permanent element of intranquility and annoyance for the Dominican people who have unanimously expressed themselves as opposed to such an official. To re-establish this office therefore, would be cause for stirring up an absolutely dangerous public sentiment. And as the purpose of the American Government is to sincerely assist the Dominican Government in the fulfillment of its duties, that aid should assume a form devoid of all danger, of everything which might wound a national sentiment jealous of its sovereignty. The intelligent aid of the American Government to the Dominican Government, in the matter of finances, ought not to be along lines outside of those prescribed by the provisions of Article III of the convention, all of which was cleared up by the negotiations of the Dominican commission.

In regard to the transformation of the public forces into a civil guard organized and commanded by American officials designated by your Government and appointed by the Dominican Government, there is the same objection as in the matter of the financial expert. That which is sought for is not a peace obligated by force, which is always precarious, but a moral peace, resulting from tranquility of mind and a cessation of warlike acts, and a desire for financial welfare.

And the establishment of a police as proposed, interpreted by the Dominican people as an abdication of the national sovereignty, far from being a pacificating element would be, on the contrary, an inextinguishable germ of trouble, of protest, and of violent attacks—all of which would bring about a situation much more lamentable than the present.

The question is not one of those to be settled by the increase or the abolition of the armed forces of the Republic. The most important side of the matter is the economic side, and with the re-establishment of the producing vitality of the country social and political phenomena which are at present a source [Page 339] of alarm both to native and foreigners will be easily and advantageously modified.

This is the constant aim of the Government, and the foreign aid which it may need and which on several occasions the American Government has offered and which will be accepted with thanks, must be of that character which does not wound the susceptibilities of the Dominican people, as everything which disturbs peace of mind must, perforce, act contrary to the whole social life of the Dominican Republic.

With the re-establishment of economic normality the Dominican Government will take especial care not to exceed its expenses, to regard scrupulously the management of internal revenue and to avoid all difficulties that may work against the organization and development of the forces of the Republic—all with the most absolute regard for its international obligations.

I avail [etc.]

B. Pichardo.
  1. See the instructions therefor in the Department’s telegram of November 14, 5 p.m., p. 330, The note is below, Inclosure 1.