839.51/2161
The Minister in the Dominican Republic (Russell) to the Acting Secretary of State
[Received January 22.]
Sir: I have the honor to report that the government is facing a rather serious financial crisis as regards available surplus for expenditures outside of the budget appropriation for administration.
The Convention funds for Public Works, on deposit with the Guaranty Trust Company of New York, have all been exhausted, and it has been found necessary to close down practically all work on projects under way. This means that hundreds of Dominicans will be thrown out of employment to face the hard times already existing on account of extremely low prices for the chief native exports—sugar, tobacco and cacao. This will create a difficult situation, as the working classes have been contented and prosperous under our military occupation, and if unemployed now can be easily influenced by this anti-American propaganda. In fact a crisis of this sort is just what the agitators are hoping for in order to place the blame for everything on the Military Government.
The budget for 1921 has just been prepared on the basis of a revenue of $11,631,400—customs revenues, $6,500,000, and internal and other revenues, $5,131,400. The General Receivership of Customs states that the estimate for customs revenue is entirely too high, and that the maximum will not be over $4,500,000. There is an item in the budget for $800,000, interest on a new proposed loan of $10,000,000. I think the sentiment in the Republic is absolutely adverse to the floating of a new loan. Several weeks ago the Military Government sent telegrams to all the Chambers of Commerce and Municipalities inquiring whether they desired a continuance of road building and other public improvements. All replied that they were in favor of these projects, but that if it meant the floating of a loan they were absolutely adverse.
[Page 857]Internal revenues will probably not fall off, and the tendency is for an increase. The income from the new land tax is estimated at about $1,000,000, payable in June of this year, but collection cannot be enforced until the expiration of two years. A great many land owners will probably hold off the payment of taxes hoping for a retirement of the occupation, and an abolishment of the tax, or some compromise with a native government.
The revenues for 1919 and 1920 were as follows:—
| Customs | Internal Revenue | |
| 1919 | $4,457,393 | $3,131,499 |
| 1920 | 6,273,967 | 4,188,172 |
I am not forwarding the budget as published, as it will probably have to be changed.
I have [etc.]