The Secretary of State to the Dominican Minister ( Morales )
Sir: I am pleased to acknowledge the receipt of your notes of November 11 and 12, stating that the Government of the Dominican Republic, being desirous of contracting a loan of $10,000,000 for certain specified public improvements, requests the agreement of the Government of the United States to this step in accordance with the terms of Article III of the Convention signed on December 27, 1924 at Washington.
In your above mentioned notes it is set forth that the Government of the Dominican Republic desires this loan to run for a period of fourteen years, the bonds to bear interest at the rate of not more than five and one-half percent and to be redeemable at 101, their redemption to begin in 1930 at the rate of one million ten thousand dollars a year and to be completed in 1940; that furthermore the issue will be divided into two series, (A) and (B), the first series amounting to five million dollars to be immediately offered for sale and the second series to be sold at a price not less advantageous than that obtained for the first series one year later after the proceeds of Series (A) have been expended.
It is understood from the information which you have furnished that the proceeds of the loan are to be used as follows:
- Two million two hundred forty-five thousand dollars in the construction of an aqueduct, system of sewers, etc., in the city of Santo Domingo.
- Two million five hundred thousand dollars to carry on the general plan of highways and distributed as follows: Four hundred thousand dollars for the completion of the Santiago-Puerto Plata road; Two hundred fifty thousand dollars for the extension of the Sanchez road as far as the Haytian frontier; One hundred twenty thousand dollars for the completion of the La Romana road until it joins the Mella road; Five hundred thousand dollars to carry on the Moca-Samaná road; One hundred fifty thousand dollars to complete the Azua-Barahona road; Two hundred thousand dollars to extend the Duarte road from Monte-Cristy to Dajobón; One hundred fifty thousand dollars to continue the Sabana de la Mar-Hato Mayor road; One hundred twenty thousand dollars to complete the San José de [Page 48] Ocoa road to its junction with the Sanchez road; Two hundred fifty thousand dollars for the construction of various bridges on the several roads; Three hundred sixty thousand dollars for the completion of the Bayaguana, Moca-Jamao, Jarabacoa and San José road.
- Two million dollars for the improvement of the harbors of Santo Domingo, San Pedto de Macorís and Puerto Plata.
- One million six hundred thousand dollars for the Immigration, Colonization, and Irrigation of arid lands in accordance with the plan of the Department of Agriculture and Immigration now being carried out by it and according to the following allotment:
- For irrigation: Baní district, two hundred thousand dollars; Santiago, twenty-four thousand dollars; Monte Cristy, two hundred thousand dollars; San Juan, one hundred seventy-five thousand dollars and Azua, twenty-one thousand dollars. For immigration and colonization: Bonao District, ninety-one thousand dollars; El Valle, one hundred thousand dollars; Monte Cristy, one hundred thousand dollars; Seibo, one hundred thousand dollars; the Dominico-Haitiana frontier, three hundred thousand dollars; Yuma, one hundred thousand dollars; San Francisco de Macorís, one hundred thousand dollars; Baní, fifty thousand dollars; and San Juan, forty thousand dollars.
- Two hundred thousand dollars for the building of ten school houses in various cities of the country.
- Five hundred thousand dollars to promote the creation of a Farmers Bank.
In reply I desire to inform you that I have given very careful consideration to your communications under acknowledgment, and I have duly noted your statement that your Government will at a later date inform me as to the exact manner in which the two million dollars for the port works at Santo Domingo, San Pedro de Macorís and Puerto Plata will be distributed, and will await this data with interest.
I have the honor to say that it is the understanding of this Government that the bonds of the proposed loan of $10,000,000 are to be issued under the terms of the Convention of 1924, their status with reference to the Receivership being therefore exactly the same as that of the bonds which represent the present outstanding balance of the public debt of the Dominican Republic and as that of any other bonds which may in the future be issued under the terms of the said Convention of 1924. As stated in the exchange of notes which took place between your predecessor and myself on October 24, 1925,2 the duties and functions of the General Receiver and the Assistant Receivers and other employees of the Receivership, as enumerated and set forth in Article I of the Convention signed December 27, 1924, are intended to continue in force and effect until the payment or retirement not only of the bonds therein specifically mentioned but also of any and all bonds to be issued under the terms of that Convention. The Government [Page 49] of the United States further understands that the Government of the Dominican Republic considers the bonds which are to be issued for the proposed $10,000,000 loan, which is the subject of the present note, as being a part of “the debt” mentioned in Article III of the Convention of 1924 and on the confirmation of these understandings will be glad, as required by the terms of Article III, to agree to the increase in the public debt of the Dominican Republic to the extent of $10,000,000.