The Secretary of State to the Minister in the Dominican Republic ( Schoenfeld )
Sir: The receipt is acknowledged of your despatch No. 3422 of July 22 last, concerning a conversation which you had on the same day with the Dominican Secretary of State for Foreign Affairs on the subject of the interpretation of Article III of the Convention of 1924 between this country and the Dominican Republic.
The Department concurs in your view that it would be difficult for the Department to express itself in advance regarding its possible attitude towards hypothetical financial obligations of the Dominican Government proposed to be incurred by the latter and communicated to this Government in pursuance of the draft formula which you submitted to the Dominican Government on July 14. You are therefore authorized to say informally to the Secretary of State for Foreign Affairs that your Government, while desiring to be as cooperative as possible, does not deem it practicable to attempt to define in advance of the presentation of a concrete instance the position or procedure which it would regard as proper in the particular circumstances. You may add, however, that as has been communicated to the Dominican Government on previous occasions, your Government desires to concern itself in a minimum degree with the fiscal affairs of the Dominican Republic, and that upon being consulted regarding any [Page 456] increase of the public debt of the Dominican Government, it would be the policy of your Government to give to Article III of the 1924 Convention an interpretation as liberal as might be possible within the limitations established by the guarantees which the Convention was intended to afford the holders of Dominican Government bonds.
In regard to the inquiry of the Secretary of State for Foreign Affairs concerning the interpretation of the term “public debt”, you may recall to the Secretary of State that the draft formula which you submitted states that “the Dominican Government will communicate to the Government of the United States in advance the details of any financial obligation which the former may propose to incur looking to expenditures by the Dominican Government in excess of fiscal revenues receivable in any current fiscal year”, and that it is believed that the language cited expresses the interpretation that should properly be given the term as it is employed in Article III of the Convention.
Very truly yours,