The Acting Secretary of the Navy (Roosevelt) to the Acting Secretary of State

Sir: I have the honor to forward herewith, for such action as your Department may desire to take in the matter, a letter dated April 16, 1919, from the Military Governor of Santo Domingo in which he requests the revocation of instructions issued on June 16, 1916,31 directing the General Receiver of Dominican Customs to assume control of finances of the Dominican Republic, and the collection [Page 152] of internal revenue and disbursement of Dominican funds. It is requested that the enclosed letter be returned for the files of this Department when it has served its purpose.

Very truly yours,

Franklin D. Roosevelt

The Military Governor of Santo Domingo (Snowden) to the Chief of Naval Operations (Benson)

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.”

[Page 153]

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 [Page 154] 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.

Thomas Snowden
  1. Instructions were cabled to the General Receiver by the Bureau of Insular Affairs on June 15 (File No. 839.51/2077); they were received by him June 16. For text, see enclosure, infra.
  2. Proclamation of Nov. 29, 1916, Foreign Relations, 1916, p. 246.