The Secretary of State to the Minister in the Dominican Republic (Schoenfeld)
Sir: The Department has been greatly impressed by the number of instances which you have recently reported, and which have been confirmed to some extent from other sources, which represent important departures on the part of the Dominican Government from the plan for meeting the economic emergency which was proposed by the Dominican Government in its note dated October 20, 1931,7 and given effect in related legislation. The Department has noted also a recent tendency on the part of the Dominican Government to make or consider financial commitments whose effect would be to increase the public debt of the Republic, without requesting the approval of this Government in accordance with Article III of the Convention.8 In connection with this apparent trend in financial matters, the Department has noted also your reports concerning certain difficulties which have arisen in the relationship between the Dominican Government and its Financial Adviser.
To assist you in dealing with these questions, the Department has set forth in the enclosed memorandum its views concerning the status of the Financial Adviser and what it deems essential in carrying out the Emergency Plan. It is felt that the expression of the Department’s views in this memorandum will serve as a general guide in your handling of these matters but the Department desires to leave entirely to your discretion the time, manner and scope of any discussions which you may find it desirable to enter into with the Dominican Government or the Financial Adviser. It is, in fact, even possible that the situation may appear to be showing such an improving tendency [Page 592] that you may feel it desirable to defer any action at this time. But the Department feels that a firm insistence at an early stage to prevent substantial deviation from the spirit of the Emergency Plan may prevent a much more serious situation later. A recapitulation has been made of various instances which appear to present important departures from the provisions of the emergency legislation or the general spirit of the promises which were made by the Dominican Government in its note of October 20, 1931, but you are in a position to have a better perspective on these matters than the Department and to judge more accurately their relative importance.
The Department has felt it desirable to set forth clearly its position in regard to the relationship between the Dominican Government and its Financial Adviser. It believes that you may find it necessary to clear up this matter in an informal and friendly conversation with President Trujillo or the Financial Adviser or both should the situation continue unsatisfactory. The Department feels, of course, that there is a distinct value in the Dominican Government’s having available the services of a Financial Adviser of the experience and technical proficiency of Mr. Dunn and hopes that you may be able to correct any misconceptions which may exist concerning the status of the Financial Adviser without unduly discouraging Mr. Dunn or President Trujillo.
Should you feel that it would be useful, the Department will be glad to take up with the Dominican Minister in Washington any of the various questions discussed above after receiving your considered opinion thereon.
Very truly yours,