839.51/4580
The Minister in the Dominican Republic (Norweb) to the Secretary of State
[Received February 21.]
Sir: I have the honor to inform the Department that yesterday afternoon I had my first interview with the Secretary for Foreign Affairs, Mr. Ortega Frier, since his return from the United States on February 15.
Mr. Ortega spoke at considerable length of his conversations in the Department and I feel it may be useful to submit a report on what he had to say in order that the Department may corroborate his statements to me.
Mr. Ortega said that he had discussed the problem of eliminating the 1924 Convention2 with great candor and that he had found a satisfactory meeting of the minds with respect to the prime requisite of changing the 1924 Convention, which was that an honorable release was sought on both sides from the engagement, on one part, that the United States protect the holders of the Dominican Government’s bonded indebtedness and, on the other part, that the Dominican Government accept the guarantee of that obligation through the Receivership General of Customs.
Mr. Ortega said that he had proposed that the Dominican Government draft legislation which would pledge the entire revenues of the Government as a prior lien for the bondholders to provide amortization and interest on the foreign debt on the same scale as now provided under the provisions of the 1924 Convention and the subsequent amendment of its terms by the 1934 agreement between the Dominican Government and the Bondholders Council.3 In addition to this legislation (which he said he would transmit, through the Legation, in [Page 492] all stages of its formulation in order that the Department might be aware of what was contemplated) Mr. Ortega proposed that the Dominican Government enter into a contractual obligation with the bondholders setting forth the terms of the laws pledging the entire revenues of the Dominican Government as a prior lien to secure the amortization and service of the debt. He wanted this contract as a double security for the bondholders, as legislation might unilaterally be changed by an act of the Dominican Congress whereas a contract could not be abrogated except by joint agreement of the two parties.
To obtain the consent of the bondholders to this procedure the Dominican Government would greatly appreciate the assistance of the Department in establishing contact with them. Mr. Ortega would rely in this regard upon the good will and cooperation of the Department.…
Once the bondholders had accepted the new contractual status proposed for the amortization and service of the bonds, Mr. Ortega said it would then be possible to consider the abrogation of the 1924 Convention. A new convention of amity and commerce might be negotiated. The Foreign Secretary, however, did not want this new treaty between the United States and his Government to have any connection with the old, or with the payment of the Dominican foreign debt. He said,
“I think a good way to handle it would be for the United States to make a unilateral declaration, referring to the Good Neighbor Policy and pointing out that in pursuance of that policy the time had been found right for a change in its treaty relationships with the Dominican Republic. Such a statement will increase President Roosevelt’s prestige even more in the American Republics, and it will pave the way nicely for the negotiation of our new Convention.”
Although to the bondholders the entire revenues of the Dominican Government would be pledged for the repayment of their debt, Mr. Ortega Frier foresaw that the Receivership of Customs mechanism at least would be retained in much its present form. He thought that a change of personnel would be inevitable and that Mr. Pulliam,4 owing to his advanced age and long years of service, would be given a special “jubilación”5 from the Dominican Government upon the termination of his services.
Respectfully yours,
- For text of convention, see ibid., 1924, vol. i, p. 662.↩
- See ibid., 1934, vol. v, pp. 189 ff.↩
- William E. Pulliam, General Receiver of Dominican Customs.↩
- Pension.↩