The Commissioner in the Dominican Republic (Welles) to the Acting Secretary of State
[Received August 30—2:28 a.m.]
11. I am advised that the General Receiver in Santo Domingo during the last three months of 1920 and the whole of 1921 retained for the expenses of the receivership from the customs revenues collected by him more than the 5 percent of the total customs collections authorized by article 1 of the convention of 1907. The convention provides that the amount retained from the customs revenues for the expenses of the receivership shall not exceed 5 percent of the total collections except “by agreement between the two governments.” The General Receiver so far as I can ascertain never obtained the [Page 48]formal approval of either the Military Government or the Government of the United States although his action was taken with the knowledge and I assume the tacit approval of both Governments. The necessity for such action arose from the fact that the customs revenues were reduced very materially in those years by the general economic crisis and [the] lower customs duties contained in the new tariff promulgated at that time by the Military Government.
While the expenses of the receivership during the current year 1922 are likewise greater than the 5 percent authorized, the necessary excess beyond that amount has been furnished by the Military Government from the general revenues of the Republic and provision has legally been made for such advances in the yearly budget.
The action of the General Receiver of Customs in 1920 and 1921 as an official under the jurisdiction of the Military Government must necessarily be validated in the proposed convention. I beg to recommend therefore that the American Minister here be instructed to advise the Military Governor that the Government of the United States approves the action of the General Receiver above referred to, but to make it plain however that no precedent is to be considered created thereby. Upon receipt of such approval the Military Governor will then issue an Executive order sanctioning the action taken and said Executive order will be included among the Executive orders listed in the proposed convention for ratification.