839.51/2192

The Secretary of State to the Secretary of the Navy (Denby)

Sir: I have the honor to refer to letter of the Military Governor of the Dominican Republic dated March 28, 1921, which requests that this Department specifically authorize the increase of the public debt of the Dominican Republic by such an amount as shall be necessary to complete the public works necessary for the well-being of the Dominican people.

The consent of this Government to the increase of the public debt of the Dominican Republic is requested pursuant to the provisions of the “Convention providing for the assistance of the United States in the collection and application of the customs revenues of the Dominican Republic”, concluded February 8, 1907, Article 3 of which reads as follows:

“III. Until the Dominican Republic has paid the whole amount of the bonds of the debt its public debt shall not be increased except by previous agreement between the Dominican Government and the United States. A like agreement shall be necessary to modify the import duties, it being an indispensable condition for the modification of such duties that the Dominican Executive demonstrate and that the President of the United States recognize that, on the basis of exportations and importations to the like amount and the like character [Page 866] during the two years preceding that in which it is desired to make such modifications, the total net customs receipts would at such altered rates of duties have been for each of such [two] years in excess of the sum of $2,000,000 United States gold.”

It appears that the sum of $2,500,000, is necessary for the completion of the most essential public works, and that such completion is essential to the interests of the United States and of the Dominican people.

In view of the Military Governor’s statement regarding customs receipts and disbursements, and of his assurance that in addition to providing for the present charges against such revenues, namely, those indicated in Article 1 of the Convention of February 8, 1907, and the charges provided for by Executive Orders 193 and 272, that there is and will be in normal times ample income for the payment of interest and the providing of a sinking fund as proposed for a bond issue of $2,500,000, this Government approves the issuance by the present Government of the Dominican Republic, of such bonds to obtain funds for the completion of public works.

The Government of the United States gives its consent to the inclusion in the Executive Order to be issued by the Military Governor and in the bonds themselves, drafts of both of which have been submitted, the following statement:

“With the consent of the United States, there is secured the acceptance of an[d] validation of this bond issue by any Government of the Dominican Republic as a legal, binding and irrevocable obligation of the Dominican Republic, and the duties of the General Receiver of Dominican customs as provided under the American-Dominican Convention of 1907, are extended to this bond issue.”

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.]

Charles E. Hughes