Only one of the international protocols, however, specified when the custom-houses to which it referred were to be turned over and the manner in which the surrender was to be made. The others merely made the pledge in general terms, further negotiations being necessary to render it effective. The exception was the arbitral award of the San Domingo Improvement Company, which determined that in case of the nonpayment of any of the monthly instalments a financial agent, to be named by the United States government, was to enter into possession of the Puerto Plata custom-house. No payments of instalments were made by the Dominican government and in September, 1904, compliance with the terms of the award was demanded. On October 20, 1904, the vice-president of the San Domingo Improvement Company, designated as American financial agent, was placed in possession of the custom-house at Puerto Plata.

A cry of dismay ran through the land and the leading newspaper of Santo Domingo, the "Listin Diario," published an editorial under the expressive heading "Consummatum est," It was, indeed, the beginning of the end. The other foreign creditors now pressed their claims with more vigor than ever, and the preparations for turning over the Monte Cristi custom-house to the American financial agent, accomplished in February, 1905, stimulated them to greater exertions. In December, 1904, the French representative in Santo Domingo, acting in behalf of the French and Belgian interests, threatened to seize the custom-house of Santo Domingo City, the mainstay of the government. The Italian creditors also demanded compliance with their agreements. It was obvious that the foreclosure of these foreign mortgages would mean indefinite foreign occupation and the absolute destruction of the Dominican government, as there would be no revenue left to sustain it.

In this difficulty, the Dominican government proposed that all the ports of the Republic be taken over by the United States. The negotiations were carried on through the capable American minister in Santo Domingo, Thomas C. Dawson, and on February 7,1905, culminated in the signing of a treaty convention which provided that all Dominican customs duties be collected under the direction of the United States, that 45 per cent of the collections be turned over to the Dominican government for its expenses and the remaining 55 per cent be reserved as a creditors' fund, and that a commission be appointed to ascertain the true amount of Dominican indebtedness and the sums payable to each claimant.

The treaty was laid before the United States Senate and met with a cold reception. In the United States there was even less desire than in Santo Domingo for American intervention in Dominican matters. Further the treaty was strongly advocated by President Roosevelt and the tension then existing between the Senate and the President endangered many of his measures. The Senate accordingly adjourned in March, 1905, without action on the Dominican treaty.

It was the darkest hour for Santo Domingo. The creditors, tired of waiting, were in no mood to admit of further delay and the government, totally without resources, was in no position to appease them. Diplomacy was equal to the emergency and a modus vivendi was arranged, under which the President of the United States was to designate a person to receive the revenues of all the custom-houses of the Republic and distribute the sums collected in a manner similar to that determined by the pending treaty, namely, to turn over 45 per cent of the receipts to the Dominican government and to deposit 55 per cent as a creditors' fund in a New York bank. This temporary arrangement went into effect on April 1, 1905. The new controller and general receiver of Dominican customs arrived with several American assistants and soon had the receivership service admirably organized. The effect was immediate. The creditors ceased their pressure, confidence returned, interior trade revived, smuggling was eliminated, the exports and imports increased and the customs receipts took a leap upwards.

It was believed that the opposition in the United States Senate would be diminished, if, instead of the United States both adjusting the debt and collecting the money for its payment, the Dominican Republic should make a direct settlement with the creditors, and the United States merely undertake to administer the customs for the service of the debt as adjusted. Accordingly the Dominican government appointed the minister of finance, Federico Velazquez, as special commissioner to adjust the Republic's financial difficulties. After long and tedious negotiations, Minister Velazquez and his able adviser Dr. Hollander evolved three conditional agreements:

(1) An agreement with the banking firm of Kuhn, Loeb & Co. of New York, for the issue of fifty year 5 per cent bonds of the Dominican Republic to the amount of $20,000,000.

(2) An agreement with the Morion Trust Company of New York to act as fiscal agent of the Dominican Republic and as depository in the debt adjustment.

(3) An offer of settlement to the holders of recognized debts and claims, to adjust these in cash at rates varying from 10 to 90 per cent of the nominal values specified in the offer. The nominal aggregate, as recognized by the Republic, exclusive of accrued interest, was $31,833,510, for which it was proposed to pay $15,526,240, together with certain interest allowances.

The proposed scaling down of the debts provoked opposition and remonstrance, but the creditors wisely reflected on the difference between a bird in the hand and more in the bush, and by the beginning of 1907 holders of credits had signified their assent in sufficient amount to assure the success of the readjustment.

A new convention between the United States and the Dominican Republic was accordingly prepared, being signed in Santo Domingo on February 8, 1907. It was ratified by the United States Senate on February 25, and by the Dominican Congress on May 3, 1907. The Dominican Congress added what it called explanatory articles to the law by which it approved the convention but made no change therein.

This convention, a copy of which will be found in the appendix, recited that disturbed political conditions in the Dominican Republic had created debts and claims amounting to over $30,000,000; and that such debts and claims were a burden to the country and a barrier to progress; that the Dominican Republic had effected a conditional adjustment under which the total sum payable would amount to not more than $17,000,000; that part of the plan of settlement was the issue and sale of bonds to the amount of $20,000,000; that the plan was conditional upon the assistance of the United States in the collection of custom revenues of the Dominican Republic; and that "the Dominican Republic has requested the United States to give and the United States is willing to give such assistance."

The two governments therefore agreed that the President of the United States shall appoint a general receiver of Dominican customs, who shall collect all the customs duties in the custom-houses of Santo Domingo until the payment or redemption of the entire bond issue. From the sums collected, after paying the expenses of the receivership the general receiver is on the first of each month to pay $100,000 to the Fiscal Agent of the loan and the remainder to the Dominican government. Whenever the customs collections exceed $3,000,000 in any year, one-half the excess shall be applied to the sinking fund for the further redemption of bonds.

The Dominican government agrees to give the general receiver and his assistants all needful aid and full protection to the extent of its powers. The United States also undertakes to give the general receiver and his assistants such protection as it, may find to be required for the performance of their duties.

The convention further stipulates that until the payment of the full amount of the bonds the Dominican Republic is not to increase its public debt except by previous agreement with the United States, and that a like agreement shall be necessary to modify the import duties.

Even with the approval of the convention difficulties lay in the way of the debt adjustment. In Santo Domingo there was opposition to the plan by interested parties and by persons not sufficiently mindful of past errors and present dangers. The Dominican Congress mutilated the contracts with the bankers, who not only refused to accept the modifications, but declined to treat further with Minister Velazquez unless he were first invested with plenary powers. The Dominican Congress then extended the necessary authority, but it came late, for the fall of 1907 witnessed a money panic in the United States and the floating of a bond issue was impossible.

After months of negotiations and struggle with recalcitrant creditors Minister Velazquez and Prof. Hollander finally perfected an arrangement under which the creditors were paid the amounts specified in the plan of adjustment, twenty per cent in cash and eighty per cent in bonds guaranteed by the fiscal convention. For the purpose of the cash payments the creditors' fund accumulated under the modus vivendi was utilized. The bonds were delivered to the creditors at the rate of 98-1/2 per cent of their face value.

Under the plan of settlement the outstanding Franco-Belgian bonds and most of the other debt items were redeemed at fifty per cent of their face value, the Improvement Company's claim at ninety per cent, the deferred debts and comptroller's certificates at ten per cent, and the remaining claims at rates varying from ten to forty per cent. Accumulated interest was remitted entirely by the creditors, except in three cases, in which it was greatly reduced. These terms were much better than the Republic could have expected from any commission of investigation. The arbitral award of the San Domingo Improvement Company was scaled down by only ten per cent, because the bonds comprised in the award had been included therein at only one-half their face value and the other credits had also been largely reduced; even this small discount brought howls of protest from British interests that had remained discreetly silent while the State Department was pressing the claim thinking it completely American. Payment under the plan of settlement was soon practically completed. Only one important group of creditors, the Vicini heirs, still refuses to assent to the plan and accept the amount set aside for them.

Upon payment to the San Domingo Improvement Company, the Company turned over the Central Dominican Railway, from Puerto Plata to Santiago, to the Dominican government. The right of the Samana-Santiago Railroad to receive a percentage of the import duties collected at the port of Sanchez was redeemed by the delivery of $195,000 in bonds at par, an excellent bargain, made all the better by the circumstance that the railroad invested the proceeds of these bonds in the extension of its line in the interior. The restrictive concession and heavy damage claim of the Clyde Steamship Line were also cancelled, and the onerous wharf and harbor concessions at the various ports of the Republic were among the other important concessions acquired by the government by means of the bond issue.

Thus debts and claims aggregating nearly $40,000,000 have been and will be discharged for about $17,000,000. The surplus remaining from the bond issue and the modus vivendi collections must, under the agreements made, be devoted to public improvements approved by the United States government: a portion has been so expended, and a fund of over $3,000,000 still remains available. In addition the Republic's credit was established on a high plane; burdensome concessions were redeemed and adequate revenues for the maintenance of the government and the progress of the country were assured. As time goes on proper appreciation will be given to the men who were the principal agents in securing this financial and economic regeneration, especially to the Minister of Finance, Federico Velazquez, and to Prof. Jacob H. Hollander. While the fiscal convention largely increased the customs revenues, the Dominican government made no attempt to accumulate a reserve fund, but spent more even than authorized by its ever increasing budgets. During the period of civil strife following the assassination of President Caceres in 1911 the government, in order to carry on its military campaigns, neglected to pay the salaries of its civil employees, pledged its internal revenues, diverted and misapplied amounts of the trust fund set aside for public works, and incurred indebtedness for supplies and materials purchased and money borrowed. It thus violated the spirit and letter of the convention in which the Dominican Republic expressly agreed not to increase its public debt except by previous agreement with the United States.

The American government, in its unwillingness to interfere in the internal affairs of the Dominican Republic, had suffered the Victoria administration to seize the government in Santo Domingo after the death of Caceres, and it now also condoned the violation of the fiscal convention. The American commission which went to Santo Domingo in 1912 to reconcile the warring factions, found that an essential condition of the restoration of peace and the rehabilitation of the government was the payment of pending salaries and certain other debts. Accordingly the United States consented to an increase of the Dominican public debt by $1,500,000, and the Dominican government contracted a loan to that amount with the National City Bank of New York, which took the bonds at 97-1/2 Per cent. The bonds bore 6 per cent interest, and for the service of interest and sinking fund, it was agreed that the general receiver of customs pay over to the Bank, beginning in January, 1913, a monthly sum of $30,000. This bond issue was finally liquidated in 1917. The amount so borrowed was not sufficient to pay all the indebtedness of the Dominican government. The manner of circumventing the debt increase prohibition of the convention having been discovered, the interior debt was further augmented after that time by failure to pay salaries, by hypothecating stamps and stamped paper, and by contracting other obligations, either to combat insurrections or because of less worthy motives. In addition, claims for revolutionary damages were filed against the government.

The foreign debt thus consists merely of the $20,000,000 customs administration loan of 1907. The sums paid into the sinking fund of this loan have been used to purchase bonds of this issue at their market price, somewhat less than par, and the interest falling due on such purchased bonds has also gone to swell the sinking fund. The value of the assets in the sinking fund on December 31, 1917, estimating the purchased customs administration bonds at par, was $6,019,161.50, exclusive of interest accruals in 1917.

The interior debt, as a result of revolutionary confusion and defective accounting, became as problematic as in days of yore and was estimated at widely different figures. With a view to ascertaining the exact amount and making provision therefor, the military government, in July, 1917, constituted a commission consisting of three American and two Dominican citizens, who were charged with the duty of investigating and liquidating all claims against the government arising since the settlement of 1907. The American members appointed were J. H. Edwards, acting comptroller-general of Santo Domingo, chairman, Lt.-Col. J. T. Bootes, of the United States Marine Corps, and Martin Travieso, Jr., of the Porto Rican bar; the Dominicans were two attorneys, M. de J. Troncoso de la Concha and Emilio Joubert. Claimants were called upon to file their claims before January 1, 1918, or be deemed to have relinquished their rights. The nominal amount of the claims so filed—comprising all outstanding internal debts—is a little more than $14,000,000, some of the claims being for indefinite sums. This figure is probably greatly exaggerated and will doubtless be subjected to drastic revision by the claims commission.

The customs receivership has continued to render invaluable service. In peace and war its officials have distinguished themselves by a highly efficient, tactful and fearless discharge of their duties. Up to 1913 appointments to the service were determined by the fitness and experience of the appointee rather than by his political antecedents, and the officials appointed possessed unusual qualifications: the first general receiver, Col. George R. Colton, who held until 1907, his successor W. E. Pulliam, who continued until 1913, their deputy J. H. Edwards, and others, were experts trained in the Philippine customs service.



CHAPTER XXII

FINANCES

Financial system.—National revenues.—Customs tariff.—National budget.—Legal tender.—Municipal income.—Municipal budgets.

The financial system of Santo Domingo is characterized by an inequitable mode of obtaining public revenue, whereby the burden of supporting the state is thrown upon the poorest classes in the form of indirect taxes upon articles of necessary consumption, and wherein taxation of property or contribution according to economic capacity plays little part. This is especially true with regard to municipal taxation.



NATIONAL FINANCIAL SYSTEM

The revenues of the general government are derived chiefly from customs duties and secondarily from miscellaneous minor sources. There is no direct tax on land. Prior to 1904 the revenues fluctuated according to the state of tranquillity of the country, being usually something less than $2,000,000 per annum, but immediately upon the establishment of the American receivership in April, 1905, they went up rapidly. The increase has continued steadily and the government's annual income now amounts to over $4,500,000.

The proportion of revenue calculated from the various sources has fluctuated but little in the different budgets. The proportions appearing from the budget of 1916 are here shown, as well as those of the budget of 1910, at which period the interior revenues were administered with less leakage.

Per cent of total 1910 1916 Customs duties........................ 77.2 81.7 Impost on alcohol..................... 6.8 4.4 State railroad........................ 6.4 ... Revenue stamps........................ 3. 3.6 State wharves......................... 2.1 4.4 Port dues............................. 1.5 1.8 Stamped paper......................... 1.4 2. Post offices.......................... .7 .8 Consular fees......................... .4 .9 National telegraph and telephones..... .3 .2 Miscellaneous......................... .2 .2 —————- Total........................... 100. 100.

Almost 95 per cent of the customs receipts are obtained from import duties. The present customs tariff, which took effect on January 1, 1910, made a radical change in the Dominican tariff system and was a step in the country's financial regeneration. Theretofore the Dominican tariff system was about as unscientific as could be imagined. It had been a tariff for revenue only, in the sense that the object was to obtain all the revenue possible and more; accordingly the common necessities of life were most heavily taxed. Originally, it appears, the tariff provided for the payment of an ad valorem duty on goods imported; later the discretionary power involved in the appraisement was taken away and a fixed, arbitrary value was assigned by law to each article, and on this value, known as the "aforo," a specified percentage was payable as customs duty. Successive governments, in their efforts to raise money, gradually increased this percentage until it reached 73.8 per cent. As the "aforo" valuation was as a general rule higher than the real value the imposition of so elevated a tax made all imported articles inordinately expensive. With respect to many items the lawmakers overreached themselves, for the duties were raised far beyond the point of maximum return.

For years a desire prevailed to adjust the tariff on a rational and equitable basis, but as there were no statistics and the government feared its income might be reduced, nothing was accomplished. After the establishment of the receivership, full statistics of imports and exports became available. The general receiver's office and the Dominican government accordingly drafted a new tariff, to which the American government agreed under the terms of the fiscal convention.

The new tariff is based almost entirely on specific schedules; only in exceptional instances, such as in the case of drugs, are ad valorem duties imposed. There were many reductions from the former tariff, especially on articles of prime necessity, but in some cases the rate remained substantially the same, while in a few it was slightly increased, a tendency being observed to protect home industries. On the whole the revision made an average reduction of about 15 per cent as compared with the former tariff, but the new duties are scientifically distributed and after a year of commercial readjustment the revenue reached higher figures than ever before.

Less than 6 per cent of the customs receipts are derived from export duties. Such duties are imposed on cacao and a number of other articles, but not on sugar or tobacco. The tax is not a large one, but the imposition of any export tax is deplored.

Wars and crop conditions have had their influence on the customs receipts, but the figures continue satisfactory, as appears from the following table of collections since the establishment of the receivership:

GROSS CUSTOMS COLLECTIONS

First Modus Vivendi year, April 1, 1905, to March 31, 1906 .................................................... $2,502,154.31 Second Modus Vivendi year, April 1,1906, to March 31, 1907 .................................................... $3,181,763.48 Four months' period, April 1, 1907, to July 31, 1907 (termination of Modus Vivendi)...................... $1,161,426.61 First convention year, Aug. 1, 1907 to July 31, 1908 .................................................... $3,469,110.69 Second convention year, Aug. 1, 1908 to July 1909 .................................................... $3,359,389.71 Third convention year, Aug. 1, 1909 to July 1910 .................................................... $2,876,976.17 Fourth convention year, Aug. 1, 1910 to July 1911 .................................................... $3,433,738.92 Fifth convention year, Aug. 1, 1911 to July 1912 .................................................... $3,645,974.79 Sixth convention year, Aug. 1, 1912 to July 1913 .................................................... $4,109,294.12 Seventh convention year, Aug. 1, 1913 to July 1914 .................................................... $3,462,163.66 Five months' period, Aug. 1, 1914 to Dec. 31, 1914 .................................................... $1,209,555.54 Ninth fiscal period, Jan. 1, 1915 to Dec. 31, 1915 .................................................... $3,882,048.40 Tenth fiscal period, Jan. 1, 1916 to Dec. 31, 1916 ................................................... $4,035,355.43 Eleventh fiscal period, Jan. 1, 1917 to Dec. 31, 1917 ................................................... $5,329,574.20

With regard to port dues, the Dominican government was long bound by a concession made to the Clyde line in 1878. Upon the redemption of this concession the port dues were in 1908 reduced to their present figure.

An impost on alcohols was established in 1905, and ought to become an important source of revenue. The law is crude in that it taxes the distillation rather than the sale of alcohol and does not sufficiently guard against fraud. The receipts, which in the beginning were quite promising, fell off strangely in late years.

The most recent sources of revenue are the Central Dominican Railway, from Puerto Plata to Santiago, acquired from the San Domingo Improvement Company under the debt settlement in 1908; the Moca extension of the railroad, finished by the government in 1910; and the wharves acquired by the redemption of the various port concessions. These properties at first gave the government a handsome revenue, which later diminished in a suspicious manner.

The budget of the Republic kept pace with the growth of income, but the appropriations were practically all for personnel, while public works continued to be neglected and no provision was made for future contingencies or the establishment of a reserve fund. The annual budget enacted to become effective July 1, 1916, may be summarized as follows;

ESTIMATED RECEIPTS

Custom-houses:

Import duties $3,500,000 Port dues 80,000 Export duties 220,000

Subtotal: $3,800,000

Imposts: Alcohol 200,000 Stamps 165,000

Subtotal: 365,000

Communications:

Postage stamps 36,000 Telegraph and telephone 5,000 Wireless telegraph 5,000

Subtotal: 46,000

Consular fees 40,000 Stamped paper 90,000

State properties:

Ozama lighting plant 4,500 State wharves 200,000 Rentals and post-office boxes 1,000

Subtotal: 205,500

Miscellaneous 6,200

Total estimated receipts $4,552,700

ESTIMATED DISBURSEMENTS

Service of public debt $1,966,746.86

Legislative power 132,400.00 Including salaries of 12 senators and 24 deputies at $200 per month.

Executive power...................................... $ 25,460.00 Expenses of president's office, including salary of president at $800 per month.

Judicial power........................................ 316,160.00 Including salaries of supreme court (with a chief justice at $250 per month, six associate justices at $160, and a state's attorney at $200); 3 courts of appeals (each having a chief justice at $180 per month, 4 associate justices at $140 and a state's attorney at $180); 12 courts of first instance (each having a judge at $150 per month, a state's attorney at $130-$150, and one or two judges of instruction at $130); 3 courts-martial costing $2,916 each; 70 justices of the peace with salaries ranging from $25 to $55 per month; and jails in each province, the jailers receiving from $35 to $69 per month.

Department of Interior and Police...................... 329,638.00 Including office of secretary of interior, who receives $320 per month; 12 provincial governors with salaries from $160 to $180 per month; 53 communal chiefs, at $30 to $60; church salaries amounting to $3,600; public celebrations $5,100; expenses of sanitation service $15,000; and a long pension list amounting to $188,240. Most of these pensions are of $10, $12 or $15 per month, but 7 widows of former presidents and other distinguished men receive $100 per month.

Department of Foreign Affairs.......................... 122,572.00 Including office of secretary, whose salary is $320 per month; ministers to the United States, France and Haiti at $500 per month; charge's in Cuba and Venezuela at $250; and 23 consuls in the United States, Porto Rico, Cuba, Haiti, St. Thomas, Panama, Turks Island, Jamaica, England, France, Italy, Holland, Spain and Belgium.

Department of Finance and Commerce...................... 356,678.04 Including office of secretary, who receives $320 per month; general comptroller's office; 10 treasury agents with salaries from $80 to $112 monthly; custom-houses (the collectors of the port receiving from $80 to $200 per month); receiver-general's office $43,152 (the salary of the general receiver is given as $9,848.04 per annum and that of his deputy as $5,988); coast guard service $6,000; wharf repairs $20,000.

Department of War and the Navy......................... 593,815.26 Including office of secretary; 12 military posts (the commanders receiving from $60 to $150 per month); 10 armories $4,980; military instructors $4,380; president's staff $12,380; one infantry regiment of about 470 officers and men (the colonel receiving $95 monthly, the men $l5); a band of 33 men; a police force, called "republican guard" of about 800 officers and men (salaries ranging from $200 for the brigadier general and $140 for the colonel, to $18 for the private); 2 military hospitals $31,867; a machine shop $4,440; port captains at $50-$90 per month, and doctors at $25-$50; and the gunboat $26,444.

Department of Justice and Public Instruction........... 318,208.00 Including office of secretary; University of Santo Domingo $23,700; Santiago professional institute $8,820; 2 jail schools; subventions to many municipal schools, private and special schools, about $180,000; 33 scholarships, $23,870; pensions $23,988.

Department of Agriculture and Immigration.............. 18,740.00 Including office of secretary; experiment fields in Santiago $3,000; weather bureau $3,980.

Department of Development and Public Works............. 332,596.00 Including office of secretary; lighthouses $13,282; postal service; telegraph, telephone and wireless service; upkeep of dredge "Ozama."

Chamber of Accounts.................................... 7,980.00

Miscellaneous.......................................... 61,872.00

Contingent expenses.................................... 25,000.00

Constitutional assembly................................ 10,000.00

Total estimated disbursements, besides debt service ... $2,651,119.30

The figures in the budgets were not, absolute but were subject to modification by transfer of appropriation through presidential decree. The contingent expense fund and the military appropriations were thus frequently swelled at the expense of other services.

The budget above shown was the last one enacted under the old conditions. It was never applied, but is given as a sample, because, while differing only slightly from the old budget which continued in force, it better illustrates conditions at the beginning of American occupation. The military government made numerous changes in the budget and rendered the appropriations for salaries of the president and cabinet secretaries available for other purposes, as the American naval and marine officers now performing the duties of these positions receive no compensation from the Dominican treasury. A comprehensive new budget, the first one of the period of transition and providing for some of the innovations recently introduced, was expected to become effective early in 1918.

For the purpose of bringing order and efficiency into the collection and disbursement of the public revenues of Santo Domingo, the American government in 1913 urged that it be permitted to designate an American comptroller and financial adviser and the Bordas administration at length consented, but as there was no legal authority for such action and as the appointee was not characterized by unusual ability, the Jimenez administration declined to continue the arrangement. During the present military government and under the efficient direction of the acting comptroller-general, J. H. Edwards, valuable work is being done in revising the accounting system and generally placing the country's finances in order.

All the accounts of the Republic are carried on in American money, which is legal tender and is current in all parts of the country. For about fifty years after the declaration of independence, coins of many countries, principally Mexican silver and Spanish gold, were in circulation, with the rate of exchange constantly fluctuating. In 1890 the Republic joined the Latin convention and in the following year through the then existing Banque Nationale de Saint Domingue issued silver and copper coin to the value of about $200,000. The fall in the value of silver caused depreciation and a few of the silver coins of this issue which are still in circulation are valued at forty cents gold for five francs; the copper coins at a little less. In 1894 the gold standard was adopted and though no actual coinage took place all official financial transactions were thereafter based upon gold values. In 1895 and 1897 President Heureaux issued more silver coins or, rather, coins washed over with silver, to the nominal amount of $2,250,000, but the seigniorage was so enormous that the issue was a case of a government counterfeiting its own money. The rate of exchange fell to five pesos for one dollar gold and this is the rate legalized by the law of June 19, 1905, which made the American gold dollar the standard of the Dominican Republic.

For a while the ordinary smaller business transactions continued to be based on silver values. On a trip to Santo Domingo in 1904 a friend and myself were driven from the wharf to the hotel and the coachman asked for two dollars. It seemed an outrageous charge, but we considered ourselves in the hands of the Philistines, and handed over an American two-dollar bill. "Excuse me until I can get change," said the coachman to our surprise, and ran into the hotel; in a moment he reappeared with a double handful of coins: "Here is your change," he said, "eight dollars." The charge had been only forty cents in gold. At the present time American money is the basis and Dominican silver and copper is regarded merely as fractional currency, one peso Dominican being equivalent to twenty cents American.

At various times the Dominican Republic has had disastrous experiences with paper money issued without sufficient guarantees. One service rendered by the Spaniards during their occupation in the sixties was the retirement of large amounts of such paper. The troubles accompanying unsecured paper money had been forgotten when Heureaux in his attempts to raise funds floated an issue of a nominal amount of $3,600,000 in notes, of the Banque Nationale, in addition to a small amount already emitted by the bank. Such demoralization resulted that at one time it took twenty dollars in paper money to purchase one dollar in gold. The national bank notes having been demonetized, various amounts were purchased at auction by the administrations succeeding Heureaux and destroyed, and almost all the remainder has been redeemed at five to one under the 1907 debt settlement. The only paper now seen is American paper money, which circulates at a par with American silver and gold.



MUNICIPAL FINANCES

Like the national government, the municipalities or communes depend almost entirely upon indirect taxation for their revenues. One of the principal sources of income is the tax on the slaughter of cattle and sale of meat. The communes may further, with the authority of Congress, levy a "consumo" tax, a small duty on the imports and exports of merchants within their jurisdiction, which tax has given rise to much confusion and controversy. Business licenses also form an important fount of revenue. By a law of Congress (soon to be superseded by a decree of the military government) the municipalities are divided into several classes, according to their importance, and the licenses payable by the various kinds of business in the several classes are designated. The national government turns over to the various municipalities a portion of the impost on spirits and grants educational subventions to several municipalities for their primary schools. Minor sources of revenue are taxes on lotteries and raffles, vehicle licenses, amusement permits, cockpits, etc. Two towns, Santo Domingo and Santiago, have municipal lotteries. Under all these taxes a man might own scores of houses and great expanses of land without paying towards the maintenance of the state and municipality more than the poorest peon on his property.

The sums collected for municipal purposes in all the communes of the Republic may be calculated at about $600,000 per annum, derived from the following sources:

MUNICIPAL RECEIPTS

Approximate percentage of entire income

Municipal charges on imports and exports.............. 17.7 Business licenses..................................... 15.3 Markets............................................... 10.8 Lottery tax........................................... 10.5 Slaughter houses and meat transportation.............. 9.2 Alcohols.............................................. 7.3 Excises (alcabala).................................... 5. Amusement permits..................................... 3.5 Public register....................................... 3.5 Lotteries............................................. 2.5 Lighting in private houses............................ 2.3 Ferryboats and bridges................................ 3.1 Municipal property and rentals........................ 1.8 Miscellaneous......................................... 8.5 ——- 100.

The largest budget is that of the capital city, with Santiago second. According to the latest figures available, in round numbers the income of the thirteen more important cities and towns is annually about as follows:

Santo Domingo........................ $160,000 Santiago de los Caballeros............. 90,000 San Pedro de Macoris................... 50,000 Puerto Plata........................... 40,000 La Vega................................ 30,000 Moca................................... 21,000 Azua................................... 20,000 San Francisco de Macoris............... 19,000 Samana................................. 10,000 Monte Cristi........................... 10,000 Sanchez................................ 10,000 Bani................................... 9,000 San Cristobal.......................... 8,000

In almost every town the largest item of expenditure is for education, the maintenance of public primary schools. The more important cities, especially the capital, make fair appropriations for street repair and other municipal public works, but in the lesser communes such appropriations are negligible. Very little, practically nothing, is appropriated for roads. Some communes pay a small subvention to the church and assist in the repair of church buildings. On the whole, municipal services are only scantily looked after, but the fault is due more to lack of revenue than to improper distribution. Occasionally the national government renders assistance in the construction of some work pertaining to a municipality.

The average distribution of municipal disbursements may be estimated about as follows:

MUNICIPAL EXPENDITURES

Approximate percentage of whole expenditure Education.......................................... 27.1 Public works, street cleaning, etc................. 27. Police............................................. 8.4 Administrative expenses (salaries of municipal officials and cost of tax collection).............. 7.5 Public lighting.................................... 7. Sanitation......................................... 4. Charity............................................ 2.2 Municipal debts.................................... 1.9 Miscellaneous...................................... 14.2 ——— 100.

In view of the lack of resources or interest on the part of municipalities and the central government, services of a public nature have frequently been assumed by private initiative. Many clubs and lodges maintain schools. Firemen's corps, where there are any, are volunteer organizations. For charity work, hospitals, educational work, etc., local committees are formed which raise funds by private subscription or by lottery, and in a number of towns the embellishment of the plazas is in charge of a "junta de ornato."



CHAPTER XXIII

THE FUTURE OF SANTO DOMINGO

Attraction by the United States.—Political future of Santo Domingo.—Economic future of Santo Domingo.

The history of the Dominican Republic affords a striking illustration of the rule that large bodies attract nearby smaller or weaker bodies whether in the world of physics or in international politics. The United States of America had scarcely become a nation when it began to absorb contiguous territory and exert a strong attraction on Cuba. With respect to Santo Domingo also, there was such attraction, as became evident in proposals for annexation or the establishment of a naval station. At times it appeared that the process was definitely checked, as when Spain annexed Santo Domingo in 1861, and when the United States Senate refused to annex the country in 1871, and when the Dominican Government cancelled the Samana Bay Concession in 1874, but these acts merely set back the clock of time which they could not stop.

When Porto Rico and Cuba were occupied by the United States the attraction exerted on Santo Domingo was powerfully increased. From that time on the Dominican Republic was in fact a protectorate of the United States, though neither American nor Dominican statesmen would have admitted it. The modus vivendi of 1905 and the fiscal convention of 1907 gave expression, in part, to relations actually existing.

A peculiar feature of the matter is that, except for a few very brief intervals, neither the United States nor the Dominican Republic has desired closer political relations and each country has done everything in its power to avoid them. The 1907 convention was approved in the United States Senate with only one vote to spare, and many of its supporters favored it principally because it was expected to obviate the necessity of further American intervention in Dominican affairs. It was believed that with the custom-houses removed from the political game the receipts and prosperity of the country would grow, revolutionists would no longer be able to finance uprisings, and civil wars would cease. The convention did indeed augment the country's revenues and prosperity, but it could not prevent uprisings entirely nor remove their causes. On the other hand it strengthened the bonds between the United States and Santo Domingo and led to the military occupation of 1916.

What will the future bring? There is every reason to believe that the same attraction of Santo Domingo by the United States will continue with greater strength than ever, despite all that may be said or done, on either side, to oppose it. It is a force which cannot be overcome, and had best, be recognized and reckoned with. It is unnecessary to consider the sentimental objections to closer political relations between the two countries. Conditions in Santo Domingo, in the United States, and in the world at large are the causes of this force of attraction, for which the government of neither country is responsible.

What then will the future relations between Santo Domingo and the United States be? It appears that at the present moment a plan similar to that tried in Haiti is under advisement, namely, to restore the Dominican government, but to leave the custom-houses under American administration, place the finances under American control, appoint an American supervisor of public works, and secure the peace by a police force under American officers. The real relations between the two countries would thus find further expression in the creation of a disguised protectorate.

As a permanent solution it is not probable that this plan will prove satisfactory. It tends to create two independent governments in the same country; on the one side the Dominican government which will consider itself supreme and sooner or later resent dictation or lack of sympathy on the part of the American officials, and on the other hand the police heads and other American officers who will brook no interference with what they deem their duty. Friction is bound to develop; it is impossible for two independent governments to work side by side in the same territory; one authority must be paramount. At first the plan may appear to operate successfully because the desires of the American officials will be respected, but later when the new Dominican government has outgrown the novelty of the situation there are certain to be reciprocal demands which may lead to opposition. Another possible source of difficulty is that even among the proposed American officials there is no recognized superior and that here also differences may arise. Rather than go so far and no further, it were better to attempt less.

The ultimate expression, more or less deferred, of the relations between the two countries, will most probably be a clearly defined protectorate with an amply authorized resident, or outright annexation. Which of these two courses is preferable? From a standpoint of the interests of the Dominican people annexation would appear better. A protected state has many obligations and few rights. It must defer to the wishes of the protector, but the protector is under no absolute duty to further its development or the happiness of its inhabitants. On the other hand, when annexed to the stronger state, it may expect and demand that interest be shown in its progress and well-being. While annexation would probably entail a temporary government by officials foreign to the country, American traditions would not permit such a condition to continue for any length of time and autonomy would eventually come.

From an American standpoint a protectorate would seem preferable. It would carry the advantages of annexation without its responsibilities, without the undesirable feature of bringing into our body politic a people foreign in race, language and customs, and with less danger of stirring up South American susceptibilities. It would, however, permit of less latitude for the improvement of conditions in Santo Domingo.

For some time to come it is probable that some form of protectorate will be the choice of both parties. Many American statesmen are opposed to annexation, and the Dominicans as a rule would prefer the phantom of sovereignty in a mediatized republic to the real advantages of annexation.

It is only natural that Dominicans should feel sad at passing under the government of a foreign power. But those of clearer vision recognize that there is no alternative, that the independence of the Republic has long been a fiction, that real freedom is only now beginning to dawn, and that American assistance will give the greatest impetus to prosperity. For several years the number of persons taking such a broader view has been rapidly increasing. It was not long ago when friends of mine in Santo Domingo would lead me to the middle of the plazza, out of hearing of any eavesdropper, and then with bated breath confide their conviction that the only salvation of the country lay in the United States. Ruin and sorrow brought by the civil wars have caused such ideas to spread and be openly expressed. At present it may be said that many Dominicans welcome American assistance, that the great majority accept it, and that only a small minority are bitterly opposed to it, and these objectors are principally former politicians and revolutionists whose opinion counts for least. The number of those favoring American intervention is being increased by the splendid administrative work of the present American authorities and would doubtless be still further augmented by valuable constructive legislation and by a more uniform display of tact and kindliness on the part of all American officials.

These relations between the two countries impose at least a moral duty upon the United States. They make it incumbent upon the United States, as far as is in its power, to foster the development of Santo Domingo and promote the happiness of the Dominican people. One measure it should adopt is the granting of suitable tariff concessions. Another measure is the creation, for the administration of the countries dependent on the United States, of a corps of trained men, selected and retained without regard to political considerations, thoroughly qualified for the duties they are to assume, speaking the language of the country where they are sent, and capable of a sympathetic understanding with the inhabitants. By showing an interest of this kind the United States will properly fulfill its proud mission of spreading liberty and prosperity in the new world.

The closer relations between the United States and Santo Domingo will bring that country one boon of inestimable value, namely, peace. It is obvious that all the troubles which have befallen the Dominican Republic are due directly or indirectly to the state of civil disorder which has so long been the bane of the country. Another advantage which these relations will bring is a proper administration of the country's finances. Peace and efficient administration will mean the multiplication of roads, railroads and other public improvements, the extension of education and a rapid advance of the people and development of the country. When we think of the vast resources of Santo Domingo, the mineral treasures hidden within Its forest covered mountains, the unlimited agricultural wealth concealed beneath its fertile soil, the enchanting beauty of its scenery, the courtesy and hospitality of its people, its glorious early days and distressing later history, we must be glad that the clouds which have so long shrouded the land in darkness are definitely dissipated at last and that the sun of peace and prosperity has begun to shine.

With peace assured and with means of communication provided, it is easy to make predictions as to the economic future of Santo Domingo. There will probably never be much manufacturing but agriculture will increase with enormous strides assisted by streams of foreign capital which will not be slow to realize the exceptional opportunities offered. Sugar growing will probably be preferred and the southern plains as well as a great portion of the rich Cibao Valley will soon be covered with waving canefields. Tobacco will also receive attention and perhaps fruit growing. Cacao and coffee will spread more slowly. Prospecting for mineral wealth will be undertaken. The extension of agriculture will stimulate commerce and augment, the wealth of the people. Within a few years the country will become one of the richest gardens of the West Indies.

The curtain has gone down upon the epoch of revolutions, conspiracies, civil wars and destruction. That period belongs to the past as definitely as the era of freebooters and pirates. A new era has begun for beautiful Quisqueya, in which, under the protection of the Stars and Stripes, it is destined to enjoy a greater measure of freedom, progress and prosperity than its inhabitants have ever dreamed.

APPENDIX A

CHIEFS OF STATE OF SANTO DOMINGO

1492-1918

FIRST SPANISH COLONY

Governors

Admiral Cristopher Columbus, viceroy 1492-1500 Adelantado Bartholomew Columbus 1496-1498 Comendador Francisco de Bobadilla 1500-1502 Comendador Nicolas de Ovando 1502-1509 Diego Columbus, Second Admiral 1509-1515 Licentiate Cristabal Lebran, in connection with Royal Audiencia 1515-1516 Luis de Figueroa, Bernardino de Manzanedo, and Ildefonso de Santo Domingo, friars of the order of San Jeranimo 1516-1519 Licentiate Rodrigo de Figueroa 1519-1520 Diego Columbus, Second Admiral 1520-1524 Royal Audiencia, in connection with judges Caspar de Espinosa and Alonso de Zuazo 1524-1528

Governors and Captains-General

(Note. Owing to the incompleteness of the records the following list probably contains inaccuracies.)

Sebastian Ramirez de Fuenleal, Bishop of Santo Domingo and Concepcian de la Vega 1528-1531 Royal Audiencia 1531-1533 Licentiate Alonso de Fuenmayor, Bishop of Santo Domingo and Concepcian de la Vega 1533-1540 Louis Columbus, Third Admiral 1540-1543 Licentiate Alonso Lapez de Cerrato 1543-1549 Licentiate Alonso de Fuenmayor, Archbishop of Santo Domingo 1549-1556 Licentiate Alonso de Maldonado 1556-1560 Licentiate Cepeda 1560 Licentiate Veras 1560-1561 Licentiate Alonso Arias de Herrera 1561-1564 Antonio de Osorio 1564-1583 Licentiate Cristabal de Ovalles 1583-1590 Lope de Vega Portocarrero 1590-1597 Domingo de Osorio 1597-1608 Diego Gamez de Sandoval 1608-1624 Diego de Acuna 1624-1634 Maestre de Campo Juan Bitrian de Viamonte 1634-1646 Nicolas Velazco Altamirano 1646-1649 Maestre de Campo Gabriel de Chaves Osorio 1649-1652 Bernardino de Menesets y Bracamonte, Count of Penalva 1652-1657 Felix de Zuniga 1657-1658 Andres Perez Franco 1658-1660 Juan Francisco de Montemayor Cardova y Cuenca 1660-1662 Juan de Balboa y Mogrovejo 1662-1670 Pedro de Carvajal y Lobos 1670-1671 Maestre de Campo Ignacio de Zayas Bazan 1671-1677 Dr. Juan de Padilla Guardiola y Guzman 1677-1679 Maestre de Campo Francisco de Segura Sandoval y Castilla 1679-1684 Maestre de Campo Andres de Robles 1684-1689 Admiral Ignacio Perez Caro 1689-1698 Maestre de Campo Gil Correoso Catalan 1698-1699 Severino de Manzaneda 1699-1702 Admiral Ignacio Perez Caro 1702-1706 Licentiate Sebastian de Cerezada y Giran 1706-1707 Guillermo Morfi 1707-1713 Brigadier Pedro de Niela y Torres 1713-1714 Colonel Antonio Landeche 1714-1715 Brigadier Fernando Constanzo y Ramarez, Knight of Santiago 1715-1723 Colonel Francisco de la Rocha y Ferrer 1723-1732 Brigadier Alfonso de Castro y Mazo 1732-1739 Brigadier Pedro Zorrilla y de San Martin, Marquis of la Gandara Real 1739-1750 Brigadier Juan Jose Colomo 1750 Teniente rey Jose de Zunnier de Basteros 1750-1751 Brigadier Francisco Rubio y Penaranda 1751-1759 Field-Marshal Manuel de Azlor y Urries 1759-1771 Brigadier Jose Solano y Bote 1771-1779 Brigadier Isidore de Peralta y Rojas 1779-1785 Colonel Joaquan Garcia y Moreno 1785-1786 Brigadier Manuel Gonzalez de Torres 1786-1788 Brigadier Joaquan Garcia y Moreno 1788-1801

FRENCH COLONY

Governors

General Toussaint l'Ouverture 1801-1802 General Antoine Nicolas Kerverseau 1802-1803 General Marie Louis Ferrand 1803-1808 General L. Barquier 1808-1809

SECOND SPANISH COLONY

Governors and Captains-General

Brigadier Juan Sanchez Ramarez 1809-1811 Colonel Manuel Caballero y Masot 1811-1813 Brigadier Carlos de Urrutia y Matos 1813-1818 Brigadier Sebastian Kindelan y Oregan 1818-1821 Brigadier Pascual Real 1821

STATE OF COLOMBIAN REPUBLIC

Governor and President

Licentiate Jose Nunez de Caceres 1821-1822

HAITIAN RULE

Presidents

Jean Pierre Boyer 1822-1843 Charles Riviare Herardi aine 1843-1844

FIRST REPUBLIC

Presidents

Central Council of Government (Provisional government) 1844 Pedro Santana, Provisional and Constitutional President 1844-1848 Manuel Jimenez, Constitutional President 1848-1849 Buenaventura Baez, Constitutional President 1849-1853 Pedro Santana, Constitutional President 1853-1856 Manuel de Regla Mota, Vice-President 1856 Buenaventura Baez, Vice-President 1856-1858 Jose Desiderio Valverde, Constitutional President 1858 Pedro Santana, Provisional and Constitutional President 1858-1861

THIRD SPANISH COLONY

Governors and Captains-General

Lieutenant-General Pedro Santana 1861-1862 Lieutenant-General Felipe Ribero y Lemoine 1862-1863 Brigadier Carlos de Vargas 1863-1864 Lieutenant-General Jose de la Gandara 1864-1865

SECOND REPUBLIC Presidents

Jose Salcedo, Provisional President 1863-1864 Gaspar Polanco, Provisional President 1864-1865 Benigno Filorneno de Rojas, Provisional President 1865 Pedro Antonio Pimentel, Constitutional President 1865 Jose Maria Cabral, Provisional President 1865 Buenaventura Baez, Provisional and Constitutional President 1865-1866 Jose Maria Cabral, Constitutional President 1866-1868 Buenaventura Baez, Constitutional President 1868-1873 Ignacio Maria Gonzalez, Provisional and Constitutional President 1874-1876 Uliees F. Espaillat, Constitutional President 1876 Ignacio Maria Gonzalez, Provisional President 1876 Buenaventura Baez, Provisional and Constitutional President 1876-1878 Cesareo Guillermo, Provisional and Constitutional President 1878 Ignacio Marna Gonzalez, Constitutional President 1878 Jacinto de Castro, President Supreme Court 1878 Cesareo Guillermo, Provisional and Constitutional President 1878-1879 Gregorio Luperan, Provisional President 1879-1880 Fernando A. de Merino, Constitutional President 1880-1882 Ulises Heureaux, Constitutional President 1882-1884 Francisco Gregorio Billini, Constitutional President 1884-1885 Alejandro Woss y Gil, Vice-President and Provisional President 1885-1887 Ulises Heureaux, Constitutional President (4 terms) 1887-1899 Juan Wenceslao Figuereo, Vice-President 1899 Horacio Vasquez, Provisional President 1899 Juan Isidro Jimanez, Constitutional President 1899-1902 Horacio Vasquez, Provisional President 1902-1903 Alejandro Woss y Gil, Provisional and Constitutional President 1903 Carlos E. Morales, Provisional and Constitutional President 1903-1906 Raman Caceres, Vice-President and Constitutional President 1906-1911 Eladio Victoria, Provisional and Constitutional President 1911-1912 Adolfo A. Nouel, Provisional President 1912-1913 Jose Bordas Valdez, Provisional President 1913-1914 Raman Baez, Provisional President 1914 Juan Isidro Jimanez, Constitutional President 1914-1916 Francisco Henriquez Carvajal, Provisional President 1916



AMERICAN INTERVENTION

Military Governor

Rear-Admiral H. S. Knapp 1916-



APPENDIX B

OLD WEIGHTS AND MEASURES IN USE IN SANTO DOMINGO

The equivalents between old weights and measures still in use in Santo Domingo with the legal or metric system, are as follows, the equivalents with American measures being also given:



Dominican American Metric

Measures of length: 1 league 3.46 miles 5.5727 kilometers 1 ona 3 feet, 10.79 inches 1.1884 meters 1 yard 35.996 inches 0.9143 meter 1 vara 32.91 inches 0.836 meter 1 foot 10.945 inches 0.278 meter 1 inch 0.9055 inch 0.023 meter 1 line [1] 0.0787 inch 0.002 meter

Surface measures: 1 tarea [2] 0.1554 acre 628.86 sq. meters 1 caballeria 186.50 acres 75.4636 hectares

Liquid measures: 1 bottle 0.7392 quart 720 grams 1 gallon 3.3265 quarts 3.34 liters

Dry measures: 1 fanega 1.575 bushels 55.5 liters 1 almud 0.1596 bushel 5.625 liters 1 cuartillo 0.0328 bushel 1.156 liter

Weights: 1 ton 2,028.232 pounds 920 kilograms 1 quintal 101.412 pounds 46 kilograms 1 arroba 25.353 pounds 11.5 kilograms 1 pound 1.014 pounds 460 grams 1 ounce 0.06338 pound, or 28.75 grams 1.014 ounces avoirdupois 1 adarme 27.78 grains 1.8 grams 1 grain[3] 0.7706 grain 5 centigrams

The following measures are cited for comparison:

American Metric Porto Rican cuerda 0.9701 acre 3930.4037 sq. meters Porto Rican caballeria 194.02 acres 78.608 hectares Cuban caballeria 33.16 acres 13.4202 hectares Haitian carreau 3.194 acres 12,928 sq. meters

[Footnote 1: 12 lines = 1 inch; 12 inches = 1 foot; 3 feet = 1 vara; 3 varas = 1 vara conuquera; 20,000 feet = 1 league]

[Footnote 2: A tarea is a parcel of land measuring 100 square varas conuqueras. It is the usual measure of land. 300 tareas = 1 peonia; 4 peonias = 1 caballeria.]

[Footnote 3: 36 grains = 1 adarme; 16 adarmes = 1 ounce; 16 ounces = 1 pound; 25 pounds = 1 arroba; 4 arrobas = 1 quintal; 20 quintals = 1 ton.]



APPENDIX C

AMERICAN-DOMINICAN FISCAL CONVENTION OF 1907

CONVENTION BETWEEN THE UNITED STATES OF AMERICA AND THE DOMINICAN REPUBLIC PROVIDING FOR THE ASSISTANCE OF THE UNITED STATES IN THE COLLECTION AND APPLICATION OF THE CUSTOMS REVENUES OF THE DOMINICAN REPUBLIC



_Concluded February 8, 1907

Ratification advised by Senate February 25, 1907

Ratified by President June 2, 1907

Ratified by President of the Dominican Republic June 18, 1907

Ratifications exchanged at Washington July 8, 1907

Proclaimed July 25, 1907_

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

Whereas a convention between the United States of America and the Dominican Republic providing for the assistance of the United States in the collection and application of the customs revenues of the Dominican Republic, was concluded and signed by their respective Plenipotentiaries at the City of Santo Domingo, on the eighth day of February, one thousand nine hundred and seven, the original of which convention, being in the English and Spanish languages, is word for word as follows:

Whereas during disturbed political conditions in the Dominican Republic debts and claims have been created, some by regular and some by revolutionary governments, many of doubtful validity in whole or in part, and amounting in all to over $30,000,000, nominal or face value;

And whereas the same conditions have prevented the peaceable and continuous collection and application of National revenues for payment of interest or principal of such debts or for liquidation and settlement of such claims; and the said debts and claims continually increase by accretion of interest and are a grievous burden upon the people of the Dominican Republic and a barrier to their improvement and prosperity;

And whereas the Dominican Government has now effected a conditional adjustment and settlement of said debts and claims under which all its foreign creditors have agreed to accept about $12,407,000 for debts and claims amounting to about $21,184,000 of nominal or face value, and the holders of internal debts or claims of about $2,028,258 nominal or face value have agreed to accept about $645,827 therefor, and the remaining holders of internal debts or claims on the same basis as the assents already given will receive about $2,400,000 therefor, which sum the Dominican Government has fixed and determined as the amount which it will pay to such remaining internal debt holders; making the total payments under such adjustment and settlement, including interest as adjusted and claims not yet liquidated, amount to not more than about $17,000,000.

And whereas a part of such plan of settlement is the issue and sale of bonds of the Dominican Republic to the amount of $20,000,000 bearing five per cent interest payable in fifty years and redeemable after ten years at 102-1/2 and requiring payment of at least one per cent per annum for amortization, the proceeds of said bonds, together with such funds as are now deposited for the benefit of creditors from customs revenues of the Dominican Republic heretofore received, after payment of the expenses of such adjustment, to be applied first to the payment of said debts and claims as adjusted and second out of the balance remaining to the retirement and extinction of certain concessions and harbor monopolies which are a burden and hindrance to the commerce of the country and third the entire balance still remaining to the construction of certain railroads and bridges and other public improvements necessary to the industrial development of the country; And whereas the whole of said plan is conditioned and dependent upon the assistance of the United States in the collection of customs revenues of the Dominican Republic and the application thereof so far as necessary to the interest upon and the amortization and redemption of said bonds, and the Dominican Republic has requested the United States to give and the United States is willing to give such assistance:

The Dominican Government, represented by its Minister of State for Foreign Relations, Emiliano Tejera, and its Minister of State for Finance and Commerce, Federico Velasquez H., and the United States Government, represented by Thomas C. Dawson, Minister Resident and Consul General of the United States to the Dominican Republic, have agreed:

I. That the President of the United States shall appoint, a General Receiver of Dominican Customs, who, with such Assistant Receivers and other employees of the Receivership as shall be appointed by the President of the United States in his discretion, shall collect all the customs duties accruing at the several customs houses of the Dominican Republic until the payment or retirement of any and all bonds issued by the Dominican Government in accordance with the plan and under the limitations as to terms and amounts hereinbefore recited; and said General Receiver shall apply the sums so collected, as follows:

First, to paying the expenses of the receivership; second, to the payment of interest upon said bonds; third, to the payment of the annual sums provided for amortization of said bonds including interest upon all bonds held in sinking fund; fourth, to the purchase and cancellation or the retirement and cancellation pursuant to the terms thereof of any of said bonds as may be directed by the Dominican Government; fifth, the remainder to be paid to the Dominican Government. The method of distributing the current collections of revenue in order to accomplish the application thereof as hereinbefore provided shall be as follows:

The expenses of the receivership shall be paid by the Receiver as they arise. The allowances to the General Receiver and his assistants for the expenses of collecting the revenues shall not exceed five per cent unless by agreement between the two Governments.

On the first day of each calendar month the sum of $100,000 shall be paid over by the Receiver to the Fiscal Agent of the loan, and the remaining collection of the last preceding month shall be paid over to the Dominican Government, or applied to the sinking fund for the purchase or redemption of bonds, as the Dominican Government shall direct.

Provided, that in case the customs revenues collected by the General Receiver shall in any year exceed the sum of $3,000,000, one half of the surplus above such sum of $3,000,000 shall be applied to the sinking fund for the redemption of bonds.

II. The Dominican Government will provide by law for the payment of all customs duties to the General Receiver and his assistants, and will give to them all needful aid and assistance and full protection to the extent of its powers. The Government of the United States will give to the General Receiver and his assistants such protection as it may find to be requisite for the performance of their duties.

III. Until the Dominican Republic has paid the whole amount of the bonds of the debt its public debt shall not be increased except by previous agreement between the Dominican Government and the United States. A like agreement shall be necessary to modify the import duties, it being an indispensable condition for the modification of such duties that the Dominican Executive demonstrate and that the President of the United States recognize that, on the basis of exportations and importations to the like amount and the like character during the two years preceding that in which it is desired to make such modification, the total net customs receipts would at such altered rates of duties have been for each of such two years in excess of the sum of $2,000,000 United States gold.

IV. The accounts of the General Receiver shall be rendered monthly to the Contaduria General of the Dominican Republic and to the State Department of the United States and shall be subject to examination and verification by the appropriate officers of the Dominican and the United States Governments.

V. This agreement shall take effect after its approval by the Senate of the United States and the Congress of the Dominican Republic.

Done in four originals, two being in the English language, and two in the Spanish, and the representatives of the high contracting parties signing them in the City of Santo Domingo this 8th day of February, in the year of our Lord 1907.

THOMAS C. DAWSON,

EMILIANO TEJERA,

FEDERICO VELAZQUEZ H.

And whereas the said convention has been duly ratified on both parts, and the ratifications of the two governments were exchanged in the City of Washington, on the eighth day of July, one thousand nine hundred seven;

Now, therefore, be it known that I, Theodore Roosevelt, President of the United States of America, have caused the said convention to be made public, to the end that the same and every article and clause thereof may be observed and fulfilled with good faith by the United States and the citizens thereof.

In testimony whereof, I have hereunto set my hand and caused the seal of the United States of America to be affixed.

Done at the City of Washington, this 25th day of July in the year of our Lord one thousand nine hundred and seven, and of the Independence of the United States of America the one hundred and thirty-second.

[SEAL.] THEODORE ROOSEVELT.

By the President:

ROBERT BACON

Acting Secretary of State.

THE END