839.51/2165
The Acting Secretary of State to the Secretary of the Navy (Daniels)
Sir: I have the honor to acknowledge receipt of your letter of January 22,34 transmitting a letter from Lieutenant Commander Arthur H. Mayo, designated as Special Financial Agent of the Dominican Republic, in which is set forth the immediate financial needs of the Dominican Republic in prosecuting the public works’ program now in process of completion.
The Department of State concurs in the opinion expressed by the Navy Department that the flotation of a loan of $5,000,000 by the Dominican Government would be of benefit to the Dominican people and trusts it may find itself able eventually to give its approval to the flotation of this loan. For the reasons already communicated to the Navy Department, it is not able, however, at present, to authorize the loan.
Under these circumstances, it is necessary to proceed upon the assumption that the certificates of indebtedness which the Military Government desires to issue will be redeemed at maturity and that the interest charges thereon will be met from the ordinary revenues of the Republic. The Department notes that the Military Governor states that by the exercise of strict economy the appropriations carried in the budget for 1921 may so be cut as to admit of the segregation [Page 858] from the receipts from internal revenue of a sufficient sum to redeem certificates in the amount of $1,200,000, and to meet the interest charges thereon.
The Department of State, therefore, approves the issuance by the Military Government of certificates of indebtedness to a total of not over $1,200,000, to bear a rate of interest not to exceed 8% for a period of six months, as a temporary measure, upon the understanding that these certificates are to be redeemed in the manner above set forth, unless the $5,000,000 loan shall have been floated prior to their maturity.
I have [etc.]
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