839.6463/152: Telegram

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

19. Department’s March 5, 7 p.m. I have had several conferences with the President and have impressed upon him that the suggestions offered by the Department for the settlement of the power company’s controversy afforded the Dominican Government fair and practical opportunities of settling the difficulty presented by the expert’s report. While the President appreciates the friendly attitude of the Department as evidenced by your instructions to me he is unwilling to issue the $2,000,000 of bonds under the conditions contained in the Department’s authorization. He apparently feels, notwithstanding my arguments to the contrary, that acceptance by him of the conditions imposed by the Department would constitute a public admission by his Government of the fact that the Government of the United States had no confidence in the willingness of the Provisional Government to meet its just obligations.

He is, however, exceedingly anxious to reach a definite agreement with the company immediately in order that issue of the $2,000,000 of bonds may be made subsequent to the conclusion of such agreement. He is considering making a proposition to the company on the basis of method number 2 suggested in your instructions to me. To [Page 684] this end he has instructed the Director of Public Works who is already thoroughly familiar with the condition of the properties to make a report to him estimating the cost of placing the properties in working condition. The Director of Public Works has confidentially informed me that he believes that this can be done satisfactorily for an amount between $60,000 and $75,000. Once the President has received this report it is my belief that he will make the company an offer for the properties in their present condition and thereafter instruct the Department of Public Works to undertake the necessary repairs in order to place the properties in operating condition, using Public Works funds for the cost of such repairs. The President is therefore inclined to the belief that the properties should be purchased by the National Government for its own account.

I am making every effort to have the Government make proposition to the company at the earliest possible moment. The report of the Director of Public Works will be forwarded by March 31st, and I trust that the Government will be in a position to make the desired counterproposal within a week after the reception of the report.