The Secretary of State to Lee, Higginson & Company
Sirs: I beg to acknowledge the receipt of your letter of September 9 with reference to your offer to the Dominican Republic to sell for its account $2,500,000 5½% two-year notes to be secured by $3,300,000 of 5½% bonds, the balance of the $10,000,000 loan authorized in March 1922 by the Military Government of Santo Domingo and approved by the Department. You request to be advised in writing whether certain statements you desire to insert in these notes and bonds concerning the cooperation of the Government of the United States in the future collection of the customs revenues of the Dominican Republic and their application can be made with the consent of this Government.
In reply I beg to inform you that this Department perceives no objection to printing on each of the bonds in question a statement similar to that proposed. The statement which is contained in a draft of the bond transmitted on September 8, by Mr. C. E. Clapp27 [Page 656] of the firm of Ropes, Gray, Boyden & Perkins, should be slightly modified to read as follows:
“The Department of State of the United States, as required by Article III of the treaty between the United States and the Dominican Republic, has consented to the issuance by the Dominican Republic of this Second Series of $3,300,000, completing the total bond issue of $10,000,000 authorized in 1922.
“The Government of the United States, through the State Department, has consented that the General Receiver of Dominican Customs, appointed under the Convention of 1907, shall, during the life of that Convention, make such payments as are necessary for the service of this new Loan, from the revenues accruing to the Dominican, Government, and has further consented to the giving of assurances by the Dominican Republic—
- “1. That after the expiration of said Convention of 1907, the Customs revenues pledged for the service of this Loan shall be collected and applied by an official appointed by the President of the United States in the same manner as the present General Receiver of Customs;
- “2. That after the expiration of said Convention of 1907, this Loan now authorized, together with and equally with the bonds of the same issue of 1922, amounting to $6,700,000 previously issued, shall have a first lien upon such Customs revenues, after the payment of the necessary expenses of collection, until all the bonds thereof are paid in full.”
Furthermore, this Department perceived no objection to the printing of a statement on each of the two-year notes to the effect that the notes are “issued with the consent of the Government of the United States of America, as required by Article III of the treaty between the United States and the Dominican Republic.” It will be understood by you, however, that while the fact of this consent may appropriately appear, this letter is not to be published in any circular or statement to be issued in connection with these securities.
With reference to your letter of September 10, 1924,28 to Mr. Munro, I may add that this Department, in a note to the Dominican Minister, has expressed its consent that these bonds should be in form similar to the $6,700,000 of this issue now outstanding with such appropriate changes as are made necessary by the difference in the amount of the bonds and the establishment of a Constitutional Government in the Dominican Republic, and has stated that the note may be regarded as conveying the consent of the United States Government to these issues of bonds and notes as required by Article III of the Convention of 1907 between the Government of the United States and the Government of the Dominican Republic.[Page 657]
This Department also stated that the Government of the United States will interpose no objection to the giving of assurances by the Dominican Government similar to those contained in the proposed draft of the bonds.
I am [etc.]