839.51/3983
The Secretary of State to Mr. Joseph E. Davies
Sir: I have to acknowledge the receipt of your letter of October 18th relating to the financial situation of the Dominican Republic, in which you invite suggestions as to the conclusions you have reached respecting the course which in your judgment the Dominican Government should pursue in the difficult circumstances in which it is now placed. As I understand what you contemplate is, that the Dominican Government should take action postponing for a further period of four years beginning December 31, 1933, amortization payments on its external [Page 660] debt. Although I realize with sympathetic consideration the difficulties the Dominican Government is encountering, I am compelled to tell you that it is not, in my opinion, within the province of the Government of the United States to express approval of or acquiescence in any action that may have the effect of varying the contracts of the Dominican Government with those who hold its bonds. No such authority, touching payment of interest, amortization payments or maturity dates is reserved to the United States by the terms of the Convention which gave it a limited connection with the subject, and, incidentally, I may remind you that, all else aside, any modification whatever of the provisions of the Convention would require action by our Senate.
I may add that I am not unmindful of the efforts made by the Dominican Government to protect its credit during this distressing period of world economic depression.
My information is that the President has announced his intention to create a Central Bondholders Committee to deal with the entire matter of bonds of foreign countries held by citizens of this country which are now in default,45 and that this Committee will be definitely constituted before long. This Committee would appear to be the proper channel through which the bondholders should be approached with respect to the questions presented in your letter to me.
Very truly yours,
- For text of the White House announcement, October 20, 1933, see Department of State, Press Releases, October 21, 1933, p. 227.↩