839.6463/142: Telegram

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

8. For Francis White:40 Referring to the Department’s telegram to American Legation dated February 6, 1 p.m., I desire to bring following consideration to your attention:

I cannot concur in the expression used in instruction under reference, namely, “apparent disinclination of Dominican Government to carry out its obligations,” under contract entered into with Santo Domingo Water, Light and Power Company. The contract of the Government with that company provided that the latter agreed to sell to the former the properties specified at a price to be fixed by an expert to be selected by common accord; the latter likewise agreed to advance to the former a sum not to exceed $60,000 and receive in return therefor Government bonds to pay for whatever repairs said expert might determine were necessary to place properties in proper condition. The expert in his report values the properties at $533,000 and fixes the necessary expenditure for repairs at $324,000. Under the terms of the contract the Government did not obligate itself to issue bonds the proceeds of which would be destined to repay the company for necessary repairs to an amount greater than $60,000 and its present disinclination or rather inability to purchase the properties on the basis set by the expert cannot in any sense be termed unwillingness to carry out the terms of the contract. Hunt, in his statement to the Government in May, 1923, declared [Page 674] specifically that necessary repairs could be carried out for a sum less than $60,000, and while in a letter to the Secretary of the Interior subsequent to the signing of the contract, he implied that his company would be willing to advance a sum somewhat larger than $60,000 for repairs, should it be necessary, neither he nor the Government had in mind an excess of more than a few thousand dollars.

The President, as the Department has been informed, I understand, by the American Minister, is most favorably disposed to the most speedy settlement possible of this controversy but he, of course, cannot, in view of the financial situation of the Government, accept a settlement on a basis never foreseen by either party and a settlement to which his Government is in no wise obligated. If the company desires the matter adjusted, it should send Hunt to Santa Domingo immediately to negotiate directly with the Government.

In addition please refer to my telegram of January 17, 11 a.m.41 The desired authorization should be granted immediately and should not be made in any sense contingent on a settlement of the controversy with the Santo Domingo Water, Light and Power Company. Unless the authorization is granted at once, all public works will cease next April with disastrous results not only with regard to the economic condition of the Republic, but to the whole question of our policy here.

  1. Chief of the Division of Latin American Affairs.
  2. Ante, p. 644.