The Secretary of the Navy (Denby) to the Secretary of State
Sir: Referring to our Conference of this date, I recommend that the Military Governor and the American Minister be instructed to return to Santo Domingo, and to call together, upon their return, for conference, Representatives of all political factions in the Republic and other representative Dominicans; that the American representatives be instructed to advise the Dominican leaders that this Government is unwilling to permit present conditions to continue any longer, and to inform them that, unless they now request the issue of a call for election, and agree to participate in the elections, the Proclamation of June 14, 1921,3 will be withdrawn and the Military Government will then continue until such time as the urgent public works have been completed and an adequate Dominican Constabulary is functioning.[Page 6]
The Representatives of the United States should further be instructed to discuss with the political leaders, with the utmost frankness, the financial situation along the lines of the letter on Dominican finances submitted by the Military Governor of Santo Domingo, a copy of which I enclose herewith. It should be made clear to the political leaders that permanent financing is essential for the Dominican Government, and that if such financing is not undertaken immediately by the Military Government, advantage cannot be taken of the terms specified for the redemption of the 1918 and 1921 loans,4 with consequent loss to the Dominican Treasury; that if such permanent financing is delayed until elections take place and a National Government has been installed, the Dominican Government, immediately upon assumption of office, will be forced to negotiate the flotation of such permanent loan since it will thereupon encounter a deficit in the National Treasury; and that, therefore, in order that advantage may be taken of the terms provided for the redemption of the 1918 and 1921 loans, in order that Dominican finances may be stabilized, in order that the program of public improvements inaugurated by the Military Government may be continued, and in order that a Dominican Government may enter upon its duties with a balance in the Treasury, the Government of the United States has authorized the Military Government to negotiate, immediately, the flotation of a permanent loan of $10,000,000,5 the allocation of which will be in accord with the memorandum of the Military Governor, herewith attached.
The flotation by the Military Government of this permanent loan will necessarily entail the extension of the life of the Receivership General, the establishment of which was provided in the Convention of 1907.6 Such an extension of our control over Dominican finances will be necessary whether the permanent loan is floated by the Military Government or by a subsequent Dominican Government, since no loan, I am convinced, can be obtained without an extension of the duties of the Receiver General in this manner.
Should the conference result in a request by the leaders for a call to elections, a proclamation for elections should be issued by the Military Governor in the same form as his preceding proclamation for that purpose. Should the conference not result in a request for elections, the Military Governor should be instructed to issue a proclamation substantially in the form enclosed herewith.7[Page 7]
Although the Military Governor, in his letter herewith, has recommended a loan of $10,000,000.00, which should give a fair working balance in the Treasury after the completion of the East and West roads and other expenditures contemplated from the loan, it is possible that authorization of a larger loan, from which additional funds could be obtained if required by the Dominican Government, might be good policy and is submitted for your consideration.
- Foreign Relations, 1921, vol. i, p. 835.↩
- For correspondence concerning these loans, see Foreign Relations, 1918, pp. 371 ff. and 1921, vol. i, pp. 854 ff.↩
- For correspondence concerning the financing of this loan, see pp. 78 ff.↩
- Foreign Relations, 1907, pt. 1, pp. 307 ff.↩
- Not found in Department files. For text as proclaimed on Mar. 6, see p. 18.↩