839.51/5449
The Chargé in the Dominican Republic ( Newbegin ) to the Secretary of State
[Received April 29.]
Sir: I have the honor to transmit herewith a communication dated April 17, 1944 addressed to the Secretary of State by the Representative of the Holders of Bonds of the Dominican Republic.32 The Representative discusses in this communication the possibilities of the Dominican Government’s retiring on January 1, 1945 the Dominican bonds of 1922 and 1926, representing the present external debt, by means of purchase or issuance of a new series of internal bonds in their stead. The preliminary views of the Dominican Government in this regard were communicated to the Department in the Embassy’s despatch no. 1551 of February 9, 1944.33
Since shortly after the outbreak of the war, certain amounts of the monthly interest payments made by the Dominican Government have not been collected. The Dominican Government believes that this situation is caused by the non-presentation of the coupons of bonds held in Europe. On the basis of accumulated interest, they calculate that some $4,500,000 in bonds are held by European nationals. It is therefore possible that the Dominican Government believes there will be no need of providing funds immediately for the retirement of those bonds and that a proportionately smaller amount would therefore be necessary to effect retirement on January 1, 1945.
As the Representative points out in the enclosed communication, it is possible that a fair proportion of persons now holding Dominican bonds would choose to accept new issue bonds in their stead, thereby reducing further the amount needed by the Dominican Government for retirement of the bonds of 1922 and 1926. Further discussions will be necessary before this plan for bond retirement can be put into effect, however, and the question of raising the necessary funds would be considered by the Dominican Government jointly with other aspects of the proposed arrangement.
Respectfully yours,