Papers Relating to the Foreign Relations of the United States, 1918

File No. 439.00/36

The Secretary of the Navy ( Daniels) to the Secretary of State

Washington, undated.
[Received August 13, 1918.]

Sir: Referring to previous correspondence with your Department in connection with the liquidation of claims against the Dominican Republic, I have the honor to forward herewith two copies of Executive Order No. 193, together with Spanish translations thereof, issued by the Military Governor of Santo Domingo under date of August 2, 1918, in regard to the issue of bonds for the purpose of paying the awards made by the Dominican Claims Commission of 1917.

Sincerely yours,

Josephus Daniels

[Enclosure]

Executive Order No. 193 of the Military Government of Santo Domingo, dated August 2, 1918

Whereas, the Dominican Claims Commission of 1917, created by Executive Order No. 60¹ for the purpose of investigating and adjudicating claims against the Dominican Republic, has rendered a preliminary report to the Military Governor covering the claims presented and registered but not yet adjudicated, showing that more than 8,800 claims have been presented representing a face value of about $15,000,000, and

Whereas, said Commission expresses the opinion that many of the claims will not be sufficiently substantiated to warrant payment of the full face value, as claimed, so that in all probability the liquidation of the awards to be made thereof will require a sum much less than the face value of the claims presented; and

Whereas, due to the abnormal conditions at present existing in all financial centers of the world, it is impracticable to negotiate a foreign loan for the purpose of providing for the payment in cash of said awards, and

Whereas, under the terms of the American-Dominican Convention of February 8, 1907, “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,” and

Whereas, this increase has now been authorized, and the consent of the United States of America has been obtained for the liquidation of the floating indebtedness of the Dominican Republic hitherto unauthorized by the United States, when it shall have been adjudicated and the corresponding awards made by the Dominican Claims Commission of 1917:

Now, therefore, by virtue of the powers vested in the Military Government of Santo Domingo, and with the consent of the Government of the United States, the payment of the awards to be made by the Dominican Claims Commission of 1917 is hereby authorized and ordered to be made as follows:

1. The said Commission shall transmit all awards to the Secretaría de Estado de Hacienda y Comercio where they shall be registered and in turn transmitted to the Contaduría General de Hacienda for payment.

2. All awards made by said Commission shall be paid in bonds of the Dominican Republic, at par, with accrued interest, to be issued as hereinafter authorized; provided, however, that all fractional amounts of such awards of less than fifty dollars ($50.00) shall be paid in cash. The cash payments herein provided for shall be made by checks drawn on the Designated Depositary for the Dominican Republic, chargeable to a special account to be opened for the purpose based on the appropriation authorized in paragraph three (3) hereof.

3. For the purpose of making the cash payments authorized in the preceding paragraph, such amount as may be necessary is hereby appropriated out of any moneys in the Treasury not otherwise appropriated.

4. For the purpose of paying in bonds the awards made by the Dominican Claims Commission of 1917, as authorized in paragraph two (2) hereof, the Contaduría General de Hacienda is hereby authorized, empowered and directed to issue bonds of the Dominican Republic, in the form and conditioned as hereinafter provided, to the amount that shall be necessary to pay such awards, which necessary amount shall not be exceeded. Said bonds shall be issued in settlement of the award in each case in the following order: first, Series M; second, Series D; third, Series C; and fourth, Series L; in the proportional amounts required to make up the total of the award. Upon the request of a holder of said bonds, the Contaduría General de Hacienda may issue one or more bonds of the larger denomination in exchange for bonds of the smaller denominations of equivalent value, but in no case shall bonds of smaller denominations be issued in exchange for a bond or bonds of larger denominations.

5. Said bonds shall be in coupon form, and may be in any or all of the following series and denominations; Series L, fifty dollars ($50.00); Series C, one hundred dollars ($100.00); Series D, five hundred dollars ($500.00); Series M, one thousand dollars ($1,000.00); and shall be numbered consecutively beginning with number one of each series. They shall bear the facsimile signature of the officer administering the affairs of the Secretaría de Estado de Hacienda y Comercio and the signature of the Encargado de la Contaduría General de Hacienda. They shall be dated January 1, 1918, and shall bear interest at the rate of five per cent (5%) per annum, which interest shall be payable semi-annually, on the first day of each January and of each July. The bonds shall be payable at par on or before January 1, 1938, in currency of value equivalent to gold coin of the United States of America of the present standard of weight and fineness, and said bonds shall become redeemable and shall be payable at par in such amounts on each interest date as the amount of the amortization fund, hereinafter provided for, available on such interest dates will permit; provided that the bonds shall be so redeemed and paid by series as follows: first, Series L; second, Series C; third, Series D; and fourth, Series M. The numbers of the bonds of each series to be so redeemed shall be determined by lot at public drawing conducted by the Contaduría General de Hacienda at Santo Domingo City within one week on either side, of the first day of November, or May, as the case may be, and notice of the series and numbers of such bonds to be so redeemed and paid shall be given by the Contaduría General de Hacienda to the Designated Depositary, hereinafter mentioned, thirty days in advance of each redemption date, and such notice shall be published at least once each week during the thirty days immediately preceding and following each redemption date in the Official Gazette of the Dominican Government and in one of the daily newspapers in the City of Santo Domingo, and in one of the daily newspapers in the City of New York. All interest upon the bonds so selected for redemption shall cease from and after the designated date of redemption. Both principal and interest shall be payable either in Santo Domingo City, at the principal office of the Designated Depositary for the Dominican Republic, or at any of its branch offices in the Dominican Republic, or at its office in the City of New York.

6. The said bonds are hereby declared to be exempt from the payment of taxes of any kind whatsoever of the Government of the Dominican Republic or of any local authority therein.

7. For the payment of the interest on said bonds, as it falls due, and of the principal, the good faith of the Dominican Republic is hereby irrevocably pledged, and said bonds and the obligations created thereby, shall not be impaired by any law or decree which the Government of the Dominican Republic or any authority thereof may subsequently enact or issue, or by any interpretation thereof, or by any interpretation of any law or decree heretofore enacted or issued, but said bonds when duly issued shall constitute a legal and binding obligation on the Government of the Dominican Republic until properly redeemed and paid.

8. There is hereby pledged, with the consent of the Government of the United States, from the customs revenues of the Dominican Republic, such amounts as may be required for the payment of the stated interest of said bonds; and, to the amortization fund for the redemption and payment of said bonds on the redemption dates hereinbefore provided, the further sum per annum, to be deposited in equal monthly installments, beginning January 1, 1918, of an amount equal to one-twentieth of the total amount of the bond issue. The sums pledged in this paragraph shall constitute an additional charge upon all customs revenues of the Republic collected in accordance with the convention of February 8, 1907, between the United States of America and the Dominican Republic, after their application to the first four objects designated in Article 1 of that convention, and before any payment is made to the Dominican Government. Additional payments for account of the amortization fund herein provided may be made at any time by the Dominican Government in its discretion.

9. The General Receiver of Dominican Customs is hereby authorized to make monthly deductions, commencing January 1, 1918, from the customs receipts of the Dominican Republic, to cover the amounts referred to in the preceding paragraph, and in accordance with the official advice thereof furnished him by the Contaduría General de Hacienda, and immediately to deposit said amounts with the Designated Depositary for the Dominican Government in a special account entitled “Dominican Republic 5 per cent Bond Issue 1918”; and such monthly deductions and deposits shall be regularly continued by the General Receiver of Dominican Customs until all of the bonds herein provided for shall have been redeemed and paid.

10. The foregoing provisions in regard to the payment of interest on said bonds, and of the principal, shall be deemed to be in the nature of a continuous appropriation, and no further appropriation for such purpose shall be required. The General Receiver of Dominican Customs is authorized to make such deductions and deposits; the Designated Depositary for the Dominican Republic is authorized and directed to make such payments; and the Contaduría General de Hacienda is authorized and directed to allow due credits in accounts therefor.

11. The Designated Depositary shall render accounts to the Contaduría General de Hacienda covering the periods ending June 30th and December 31st, of each year, of all receipts, accruals of interest, and payments from the account “Dominican Republic 5 per cent Bond Issue 1918,” and shall surrender with such statements of account all coupons and bonds redeemed and paid. Upon verification of such accounts the Contaduría General de Hacienda shall make entry thereof, allow credit in account therefor, and cancel and destroy the coupons and bonds so received.

12. Such funds as may be necessary to defray the expense of printing the bonds, advertising notices relating thereto, and other expenses incidental to the issuance, redemption, and cancellation thereof, are hereby appropriated out of any moneys in the Treasury not otherwise appropriated.

H. S. Knapp

, Rear Admiral, United States Navy
Military Governor of Santo Domingo

Issued at Washington, D. C., U. S. A.,
by authority of the Government of the United States,
2 August 1918

1. Foreign Relations, 1917, p. 721.