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

Sir: I have the honor to acknowledge the receipt of your Department’s letters of November 26,23 and 29, 1920, (Op–13A, 16870–315: [Page 152]8 and 9), commenting upon this Department’s letter of October 14, 1920, in which it was stated that the Department of State seems to be lacking in authority to issue instructions to the General Receiver of Dominican Customs regarding the segregation from the customs revenues of amounts to provide for the payment of interest and amortization upon the bonds of the “Dominican Republic 5% bond issue 1918”.

With your Department’s letter of November 26, 1920, there was transmitted a letter from the Military Governor of Santo Domingo in which he gives an explanation of the request heretofore made by him and transmitted by your Department to this Department on September 9, 1920, that instructions for such segregation be given.24 It may here be stated that such original request failed on its face to take into account the provisions of Article I of the Convention of 1907 between the United States and the Dominican Republic as to the application by the General Receiver of the proceeds of the customs duties. However, the Military Governor, in the letter transmitted with your letter under acknowledgement, makes the explanation that the instructions asked for merely cover a part of that portion of the customs revenues which, under the terms of that Article of the Convention, were to accrue to the Dominican Government, and are intended to authorize the General Receiver instead of paying such sums directly into the Treasury of the Dominican Republic, to pay them to the Fiscal Agent of the 1918 bond issue. The Governor points out that with this view of the matter, the General Receiver will still be obligated to make the payments for the first four objects stated under that Article of the Convention, before any sum can be paid to the Fiscal Agent or to the Dominican Treasury.

It appears from this letter of the Military Governor that the General Receiver is now making payments according to the plan indicated, and that according to present indications, the bond issue of 1918 will be fully redeemed by December 31, 1922, or approximately three years prior to the final redemption of the bond issue of 1908. The Military Governor expresses the hope that this Department will see its way clear to permit the continuance of the present practice. On this point it may be said that this Department is entirely willing that the present practice should continue, and if you desire, will be pleased so to inform the Bureau of Insular Affairs.

However, as indicated in this Department’s letter of October 14, 1920, it does not consider that it has authority to issue instructions to the General Receiver to make such payments.

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It is noted that in the opinion of the Judge Advocate General of the Navy, quoted in your letter of November 29, 1920, the view is expressed that reference to the Treaty of 1907 in connection with the matter under discussion, “seems scarcely even apposite.” To this view the Department of State must strongly dissent. As indicated in its letter of October 14, 1920, and as hereinbefore suggested, that Treaty specifically provides what application shall be made of the sums collected by the General Receiver as customs revenues. As also indicated in that letter, the Military Government of Santo Domingo, of course, could not of itself alter the provisions of this Treaty; and, furthermore, the executive branch of the Government of the United States apparently could not alone enter into an arrangement for such alteration. Therefore, even if, as contended by the Judge Advocate General, the provisions of Executive Order No. 193, issued by the Military Governor of Santo Domingo were so issued by authority of the executive branch of the Government of the United States, the provisions of that Order for the segregation in question by the General Receiver of Customs would not be internationally binding as affecting the provisions of the Convention of 1907.

With reference to the inquiry of the Judge Advocate General as to who may require the General Receiver to make the segregation in question, it may be observed that this Department is of the opinion that there is no authority to make such a requirement. Nevertheless, as to the funds which the Treaty provides shall be paid to the Dominican Government, after the specific payments thereinbefore directed to be made, this Department is of the opinion that, if so requested by the Military Government, the General Receiver may apply a portion of such funds to the segregation in question, and as indicated above, this Department has no objection to such action by the General Receiver.

With respect to the views expressed by the Judge Advocate General as to the status of the Military Government of Santo Domingo, it is not the purpose in this communication to enter into an extended discussion. It may, however, be pointed out that in the proclamation of Captain Knapp, issued November 29, 1916, upon taking charge of the Military Government, it is stated that “this Military Occupation is undertaken with no aim or ulterior object of destroying the sovereignty of the Republic of Santo Domingo, but, on the contrary, is designed to give aid to that country in returning to a condition of internal order that will enable it to observe the terms of the Treaty aforesaid, and the obligations resting upon it as one of the family of nations”; and, that “all [Page 154]revenue accruing to the Dominican Government, … 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”.

It may also be pointed out that on December 29 [20], 1916, the Department of State telegraphed the American Minister at Santo Domingo that the position of his Legation should be practically the same as before the proclamation of the Military Government, and that it should advise on all points with the Military Government, “which is carrying on the Government for the Republic”.22

On April 7, 1917, Captain Knapp issued an order to the Commander, Second Provisional Brigade, United States Marines, in which he set forth that in the world war, “the attitude of the Dominican Government should be that of a neutral, in so far as the existing circumstances of the Military Government permit”.

The annual report of the Military Government “from date of proclamation, November 29, 1916, to June 30, 1917,”23 contains the statement that a Postal Convention had been concluded (by the Military Government) between the Dominican Government and the United States.

Executive Order, No. 15, of the Military Government, of December 29, 1916, expresses the determination of the Military Government to administer the affairs of the Dominican Republic without incurring any indebtedness, except as stipulated in the Convention of 1907.

In the agreement rendered necessary by the Convention of 1907 to increase the public debt of the Dominican Republic, the Military Government, of course, acted for the Dominican Republic, and this Department for the Government of the United States; and this Department stated in its letter to your Department of July 19, 1918,24 “this request of the Military Governor of Santo Domingo on behalf of the Dominican Republic, and the concurrence of this Government therein, may, it is believed, be taken to constitute, in the circumstances, the ‘agreement between the Dominican Government and the United States’, required by Article III of the Treaty of February 8, 1907, prior to the increase of the public debt of Santo Domingo in the manner proposed.”

I have [etc.]

Norman H. Davis
  1. Not printed.
  2. Letters and their enclosures not printed.
  3. Foreign Relations, 1910, p. 249.
  4. ibid., 1917, p. 709.
  5. ibid., 1918, p. 376.