839.51/2052

The Secretary of State to the Secretary of War ( Baker )

My Dear Mr. Secretary: I have your letter of July 16, 1919, concerning the Dominican Republic five percent bond issue. You point out that the Bureau of Insular Affairs of the War Department is vested, by an Executive Order of July 25, 1907, with supervision and control of the Receivership of the Dominican customs and that, in accordance with the procedure followed in case of a former bond issue in 1913, the Department of State requested the Bureau of Insular Affairs to direct the General Receiver to comply with the decrees governing the loan, which procedure appears not to have been followed in the case of the 1918 bond issue. You ask that some step be taken to destroy the effect of the procedure adopted in the present case as a precedent in future cases, on the ground that it might be embarrassing if the relations between the United States and the Government of the Dominican Republic were not as close as at the present time. You also point out that, in view of the Executive Order of 1907 and the provisions of the Customs Convention of 1907, the Receivership should have close control over the handling of funds segregated in connection with the loan. You ask in addition that you be advised of the exact amount of the present floating debt of the Dominican Republic as determined by the Claims Commission of 1917, as soon as such information is available, and request an expression of opinion as to the basis on which segregations in service of the bond issue shall be made as well as the time of commencement of segregation.

A copy of Executive Order No. 193, issued by Admiral Knapp, Military Governor of the Dominican Republic, on August 2, 1918, was transmitted to you by this Department under date of February 27, 1919. No copy of Executive Order No. 225 of November 6, 1918, has been received by this Department except in the form published in the Gaceta Oficial of Santo Domingo nor has any copy of the Executive Order No. 272 of March 13, 1919 been received by this Department from official sources. Copies of the two latter decrees have accordingly never been transmitted to you.

With regard to the procedure which has been adopted in the case of the present bond issue, the apparent action of the Military Governor in assuming to impose duties upon the General Receivership without requesting an order to that effect from the Bureau of Insular Affairs of the War Department has, no doubt, been due to misapprehension arising from the relations existing between the Military Government of the Dominican Republic and a Department [Page 158] of the United States Government. In order, however, that the procedure in the present case may not become a precedent for future action, a copy of your letter has been transmitted to the American Legation at Santo Domingo with instructions40 to present it and point out to the Military Government the control over the Receivership which is vested in the Bureau of Insular Affairs of the War Department and the appropriate practice of obtaining an order of the Bureau of Insular Affairs directed to the Receivership in case any duties are imposed upon the Receivership. It is thought that this, in connection with the orders which have already been issued by the Bureau of Insular Affairs to the General Receivership of Customs at Santo Domingo to proceed in accordance with orders 193, 225, and 272, will cure the defects of the existing situation.

The American Legation at Santo Domingo has also been instructed to obtain information as soon as possible as to the exact amount of the present floating debt of the Republic, as determined by the Claims Commission of 1917. When this information is received it will be promptly transmitted to your Department. The attention of the Military Government is also being called to your suggestions with regard to the necessity for close control by the Receivership of any funds segregated in service of the bond issue, and the opinion of the Military Government has been asked with regard to the time and basis of segregation of funds in connection with the loan, as to which, however, Executive Order No. 272 of March 13, 1919, would appear to contain definite provisions.

I am [etc.]

Robert Lansing
  1. Instructions of July 31 not printed.