839.00/2584: Telegram

The Commissioner in the Dominican Republic ( Welles ) to the Acting Secretary of State

The work of completing the compilation of the Executive orders, etc., to be ratified in the proposed convention was completed to-day and the final list has been approved by the members of the Commission, the legal adviser to the Military Governor and myself. The members of the Commission request my agreement to the insertion in the proposed convention of three clarifying amendments to which the legal adviser to the Military Government and myself see no objection. These amendments are the following:

1. Addition at the end article I of the proposed convention of the following clause: “but controversies which may arise related with those rights acquired will be determined solely by the Dominican courts.”

The intention of the Commission in suggesting this amendment is to avoid the possible construction of the preceding paragraph of the article above referred to in the sense that the Government of the United States would in the future have the power to determine, et cetera, of the rights which had been so acquired.

2. Omission of the final clause of article II which reads as follows: “and to the complete execution of the contracts with which the bonds were issued.”

The members of the Commission request this amendment in order that the Dominican Government may later if it should so desire effect a modification of the contract under which the 1922 bond issue was floated with the bondholders without being obliged to obtain the agreement of the Government of the United States which would imply the consent of the United States Senate.40

Inasmuch as the contract under which the loan was issued will be ratified by the proposed convention I see no reason why the amendment should not be accepted in view of the fact that no change in the contract can be made without the consent of the bondholders and if such consent should be forthcoming there would appear to be no reason why the Government of the United States should object.

3. Addition to article II of the proposed convention of the following provision: “with reference to the stipulation contained in article 10 of the Executive order in accordance with which the loan of 5 percent authorized in 1922 was issued which provides that, ‘that the present customs tariff will not be changed during the life of this [Page 50] loan without previous agreement between the Dominican Government and the United States,’ the two Governments concerned agree in interpreting this agreement of40a the sense that in accordance with article 3 of the convention of 1907 a previous agreement between the Dominican Government and the United States 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 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.[”]

I do not consider this amendment necessary in view of the wording of article 9 of the Executive order above referred to, which clearly indicates that the previous agreement to modify the import duties must be in accordance with the convention of 1907. However, in view of the fact that the members of the Commission feel that the wording of article 10 of said Executive order may give rise to misinterpretation I have raised no objection to the amendment proposed. The desire of the members of the Commission is to make it clearly evident to the public that no restrictions are imposed by the United States in the proposed convention with which the people here are familiar and to which they raise no objection.

I have advised the members of the Commission that I would accept no more amendments or modifications to the proposed convention as it now stands once I received the agreement of the Department to the amendments above quoted and they have formally stated that they have no amendments or modifications to offer.

The acceptance of the amendments above quoted will enable the political leaders on the Commission to avoid dissension within their respective followings which recently has been threatening and is eminently desirable at this particular time for that reason. I hope therefore that the Department will advise me by cable at the earliest opportunity that no objection is perceived to these final amendments to the proposed convention.

Welles
  1. For correspondence concerning 1922 bond issue, see pp. 78 ff.
  2. Evidently garbled; see Department’s reply infra.