The Minister in the Dominican Republic (Schoenfeld) to the Secretary of State
[Received November 10.]
Sir: I have the honor to inform the Department that in the course of a call on President Trujillo this morning for the purpose of paying my respects before departing this evening on leave of absence recently granted me by the Department, I had occasion to inquire of the President as to the present status of certain matters which have been the subject of discussion between the Legation and the Foreign Office in recent months. The Minister of Foreign Affairs was present during my visit.
The first matter I brought up was that relating to the application of the American-Dominican Modus Vivendi of 192445 to American imports into this country similar in character to those specified in the recently concluded Franco-Dominican trade agreement. The President stated with reference to this matter that the Government had not yet taken a decision in the premises, the matter being under consideration by the Consultative Commission of the Foreign Office.
The Minister of Foreign Affairs, as well as the President, alluded immediately to the interest of the Dominican Government in securing an increased quota for Dominican sugar exports to the United States. On this subject, the Minister of Foreign Affairs went so far as to say [Page 457] that the preferential treatment accorded Cuba in the existing Cuban-American trade agreement,46 and otherwise, was in effect discriminatory against the Dominican Republic in view of the abrogation of the Piatt Amendment and the cessation of special political relations between the United States and Cuba. I said I would probably have occasion to discuss this matter in Washington but that I ventured to recommend caution on the part of the Dominican Government in permitting the impression to grow that unconditional most-favored-nation treatment for American goods in this country under the Modus Vivendi of 1924, was now to become conditional in any respect.
I believe I am now warranted in stating that the Dominican Government’s long standing interest in the possible negotiation of a general trade agreement with the United States has lately been intensified by the belief of President Trujillo and of his Foreign Minister, that such an agreement is an objective which can be obtained under the pressure of the existing tacit denial of most-favored-nation treatment to American imports here, a denial ostensibly based on the new Franco-Dominican trade agreement and ascribed to the French Government’s initiative but deemed very opportune to the purpose indicated. Both the President and the Foreign Minister asserted that there was no intentional association between the two matters. Pending a decision by the Dominican Government to comply with the American-Dominican Modus Vivendi of 1924, however, and in view of the insistent references lately made on behalf of the Dominican Government to an increased sugar quota in the United States and a trade agreement with us, it seems unquestionable that they have decided to relate the two matters in their present policy.
I asked the President whether he could inform me of any developments in relation to the acceptance of the formula I had submitted to him in July last at his request designed to govern the method of compliance by the Dominican Government with Article III of the Convention. The President answered in the negative but added that, as I would have observed, the Government had made no further contracts like those which motivated our representations regarding Article III earlier this year.
I also mentioned the floating debt matter. The President stated that the budget for 1937, which is now in preparation, would include an appropriation to be applied towards liquidation of the floating debt. The President, however, vouchsafed no information as to the procedure to be followed in determining priority and other open questions involved in the proposed liquidation of the floating debt.
I inquired whether the President had taken any decision regarding the consolidation of the customs and so-called internal revenue taxes [Page 458] on imports, which was the subject of conversations between the President and myself and between the President and the General Receiver of Dominican Customs in July and August last. I volunteered the statement that a study of this topic recently made in the Legation (See my despatch No. 3511 of September 14, 193647) indicated that it would be advantageous to the Dominican Government to effect the suggested consolidation, not only for the benefit of the revenues and local business in the Republic but also to widen the fiscal field within which the Dominican Government might bargain for commercial agreements with foreign countries. The President told me that a similar study had been made by the Dominican Government itself and had led to similar conclusions. Consideration is apparently still being given to this important matter.