839.51/2328
The Commissioner in the Dominican Republic
(Welles) to the Secretary of
State
Santo
Domingo, October 2,
1922.
[Received October 13.]
No. 23Sir: I have the honor to transmit herewith a
copy of a letter addressed to me by Admiral Robison under date of
September 25, as well as a copy of my reply thereto under date of
September 30. The audit of the accounts of the Guaranty Trust Company of
New York, as Fiscal Agent of the Dominican Republic for the $20,000,000
Customs Administration 5% Sinking Fund Gold Bond Issue of 1908, is
undoubtedly desirable, but I believe that the Department will coincide
with the view which I have expressed to the Military Governor that the
appointment of an officer of the United States
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Navy as a “Special Agent of the Dominican
Republic”, at the time the Provisional Dominican Government is
installed, would be in accord neither with the spirit nor the letter of
the Plan of Evacuation, and that the appointment of this Agent should be
made by the Provisional Government.45
I have [etc.]
[Enclosure 1]
The Military Governor of Santo Domingo
(Robison) to the American
Commissioner in the Dominican Republic (Welles)
Santo Domingo, September 25, 1922.
My Dear Mr. Welles: I have had under
consideration for some time an audit of the accounts of the Guaranty
Trust Company of New York, as Fiscal Agent of the Dominican Republic
for the $20,000,000 Customs Administration 5% Sinking Fund Gold Bond
Issue of 1908. An audit of the Company’s accounts is contemplated in
the Fiscal Agency Agreement of January 27, 1908, in accordance with
the following quotation therefrom:
“The Republic shall have the right at any
time to examine and audit the books and accounts of the
Fiscal Agent of the Loan in connection with its acts as the
Fiscal Agent of the Loan.”
No such audit has been made.
There is now in dispute between the Military Government and the
Guaranty Trust Company an item of $50,728.69 presented by the
Guaranty Trust Company to the Dominican Government, due mainly for
payment as loss on exchange.
The question of an audit has been discussed informally with the
Bureau of Insular Affairs of the War Department and with the
Company. The cost of an audit has been investigated and it has been
found that a certified public accountant and assistant would cost
approximately $50.00 per day, plus typing and incidental expenses,
and an uncertain length of time would elapse before an audit, such
as I believe to be necessary, could be made; the total cost of audit
if made by a commercial firm is variously estimated from five to ten
thousand dollars.
I am of the opinion that it is in the best interests of the Dominican
Government and of the United States Government that an audit,
practically as of the date of the inauguration of the Provisional
Government, be undertaken; and I propose to appoint Lieutenant
Commander D. W. Rose (Supply Corps) U. S. Navy, now Secretary of
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Hacienda and Comercio, to
make an audit in accordance with the terms of an appointment, a copy
of which I am enclosing.46 Lieutenant Commander Rose is thoroughly familiar
with the terms of the Agreement and the transactions which have
taken place under it, and, under the directions contained in his
appointment, the Dominican Republic will secure an accurate, an
informing, and a complete audit at the least possible expense.
Tentative arrangements have been made to secure the advice and
cooperation of federal bank examiners as required in connection with
this work.
I hope that this procedure will meet with the approval of the Junta,
and as soon as I am informed in the matter I shall take appropriate
action.
Very sincerely,
[Enclosure 2]
The American Commissioner in the Dominican
Republic (Welles) to the Military
Governor of Santo Domingo (Robison)
Santo Domingo, September 30, 1922.
My Dear Admiral Robison: I beg to
acknowledge the receipt of your letter of September 25, referring to
the desirability of undertaking an audit of the accounts of the
Guaranty Trust Company of New York as Fiscal Agent of the Dominican
Republic for the $20,000,000 Customs Administration 5% Sinking Fund
Gold Bond Issue of 1908. You state that you are of the opinion that
it is in the best interests of the Dominican Government and of the
Government of the United States that an audit, practically as of the
date of the inauguration of the Provisional Government, be
undertaken and that you therefore propose to appoint Lieutenant
Commander D. W. Rose, U. S. N., now charged with the Ministry of
Hacienda y Comercio of the Dominican Republic, to make an audit in
accordance with the terms of an appointment, a copy of which you
were good enough to enclose with your letter under
acknowledgment.
In accordance with your request that I take this matter up for
discussion with the members of the Commission, I have today referred
this question to the gentlemen composing the Commission. While
agreeing in your opinion that the audit should be made at an early
date, they are opposed to the appointment of an official of the
Military Government to act as a representative of the Provisional
Government. They propose, therefore, that the issuance of the order
be deferred until after the installation of the
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Provisional Government; that a
representative of the Dominican Government then be appointed by the
Provisional Government; and that the necessary extraordinary
expenditures required by the audit be then agreed to by the
Provisional Government and the Military Government. I may add, that
in my opinion the appointment of Commander Rose as a “Special Agent
of the Dominican Republic” at the time of the installation of the
Provisional Government would not be in accord either with the letter
or the spirit of the Plan of Evacuation.
Believe me [etc.]
