839.6463/31: Telegram

The Secretary of State to the Minister in the Dominican Republic (Russell)

20. Santo Domingo Water, Light and Power Company states that by reason of excessive fines imposed, refusal to put into effect just rates for services [as?] provided by Dominican Government, and finally by failure to perform agreement to purchase Company’s plants, municipalities of Santiago and Puerto Plata have placed Company in financial condition from which it cannot extricate itself. Liberty Trust Company, mortgagee of plants, states it has been placed by said failure to perform agreement in additional serious position since it was induced upon making agreement to annul proceedings for foreclosure and thereafter could not revive proceedings and bring about sale of property prior to expiration of six months period after discontinuance of service, when municipalities under contracts with Company are entitled to bring about forfeiture of contracts.

Department understands that water supply these municipalities came from plants mentioned, and apparently failure of supply must have detrimental effect on health of inhabitants.

In view of foregoing, and since apparently municipalities have been actuated by anti-American feeling produced by occupation, Department considers Military Government should take active measures to persuade municipalities perform agreement. Health question alone seemingly would warrant such action.

Advise Dominican Government and point out necessity for prompt action in view of existing situation, including rapid deterioration of idle plants.