[Enclosure]
The Military Governor of Santo Domingo
(Snowden) to the Chief of
Naval Operations (Benson)
Santo Domingo, 16 April, 1919.
613–19 M–McG
1. On June 16, 1916, the General Receiver of Dominican Customs
received the following message from the Bureau of Insular
Affairs:
“At the request of the State Department the Receivership
shall at once assume control of finances of the
Dominican Republic, the collection of internal revenue
and disbursement of Dominican Funds.”
In accordance with this message the General Receiver, on the same
day, June 16, 1916, wrote to the Secretaria de Estado de
Hacienda & Comercio and informed him that he had assumed
control. Under date of June 17, 1916, the Secretaria de Estado
de Hacienda & Comercio acknowledged receipt of the General
Receiver’s letter and stated that the control of the finances
and collection of internal revenue were not covered by the
Treaty of 8 February, 1907, and protested against the
Receivership’s order. The General Receiver on June 18, 1916,
replied to the Department of Hacienda’s letter written on the
previous day stating that the decision as to the legality or
justice of the action ordered did not rest with the Receivership
and that, having received orders to establish control over the
finances of the Republic, such control must be established, if
possible, with the cooperation of the Department of
Hacienda.
2. In the proclamation32 issued at the time the Military
Government took over the administration of the affairs of the
Dominican Government, the following paragraph appears:
“All revenue accruing to the Dominican Government
including revenue hitherto accrued and unpaid—whether
from customs duties under the terms of the Treaty of
February 8, 1907, (The Receivership established by which
remains in effect)—or from internal revenue—shall be
paid to the Military Government herein established,
which will in trust for the Republic of Santo Domingo,
hold such revenue and will make all the proper legal
disbursements therefrom necessary for the administration
of the Dominican Government, and for the purposes of the
Occupation.”
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It is understood that the wording of this
proclamation was approved by the State Department and by the
President of the United States before it was published.
3. Notwithstanding the issuance of the proclamation referred to
in the preceding paragraph the cable instructions to the General
Receiver of Dominican Customs of June 16, 1916, have never been
definitely cancelled.
4. The placing of the Receivership in control of the collection
of internal revenue and of disbursements was naturally a
temporary expedient. It was not contemplated by the
American-Dominican Convention of 1907, and naturally terminated
upon the proclamation of Military Government. From the date of
the establishment of the Military Government the collection of
internal revenue and the disbursement of Dominican funds has
been handled in accordance with the proclamation, and all
control over the finances has been by the Military Governor
through the officer detailed to administer the Department of
Hacienda & Comercio. The Department of Internal Revenue and
the Contaduria General de Hacienda are sub-departments under the
direct charge of Special Deputy General Receiver J. H. Edwards,
and have been organized as entirely separate from the customs
Receivership, and as directly subordinate to the Secretaria de
Hacienda & Comercio. The Administration as conducted has
been most successful. Mr. J. H. Edwards has been untiring in his
work which has been satisfactory in every respect.
5. The failure of the State Department to cancel the instructions
of June 16, 1916, has resulted in an anomalous situation. It is
assumed that the State Department regarded its instructions as
automatically cancelled by the proclamation of Military
Government since said proclamation had its approval. However, in
order that there may be no cause for any possible conflict of
authority at any future time, it is strongly recommended that
the cable instructions before referred to be withdrawn by the
State Department through the Bureau of Insular Affairs.
6. It is not the intention of the Military Governor to make any
radical changes in the system which has proved so successful in
actual operation during the past years of the occupation, and,
in fact, it is desired to retain Special Deputy General Receiver
J. H. Edwards in charge of the Contaduria, and the only change
will be that his salary will be paid from Dominican Government
funds instead of from Receivership funds.
7. Mr. C. H. Baxter, the General Receiver of Dominican Customs,
has signified verbally his consent to the separation of Mr. J.
H. Edwards from the nominal service of the Receivership to
accept service
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under
the Dominican Government and Mr. Edwards has made known his
approval of the change.
8. Mr. Baxter has expressed the opinion that the collection of
internal revenue should be combined with the collection of the
customs duties under the Receivership. This the Military
Governor does not agree with for the following reasons:
- First: The American Dominican Convention of 1907 does
not provide for the collection of internal revenue by
the Receivership but for the collection of import and
export duties only. To permanently place the collection
of internal revenue under the Receivership would be a
direct and unjustified violation of the
convention.
- Second: The very few internal revenue imposts now
collected by internal revenue agents at the custom
houses will become a part of the customs tariff when the
new tariff is approved to become effective on January 1,
1920.
- Third: The nature of the collections made by the two
services are so different as to necessarily require
separate and distinct organizations. Custom Houses are
established at the principal ports and on the Haitian
border only. Internal revenue is collected in every
town, village and com[m]une of the Republic.
- Fourth: The present organization of the Internal
Revenue Department has proved itself most efficient and
is so organized as to effect maximum collections at
minimum cost.
- Fifth: The present system as established is one which
has proved its value and which can be handed over intact
to a Dominican administration at such time as the United
States may see fit. This would not be the case were it
organized as a part of the Receivership, as in that case
it would have to be separated from the Receivership and
a new organization established.
As the collections of internal revenue are not in any way
applicable to the payment of the 1908 loan which the Customs
Receivership was established to insure, no valid reason can
exist for transferring the present efficient Internal Revenue
Department to the Receivership. No good purpose would be served
and the Military Governor must therefore emphatically differ
from Mr. Baxter on that point.
