t . _. .. , UC SOUTHERN REGIONAL LIBRARY FACILITY Classificatior ,«»♦«- ■ - I >-f - , - QNRE3TR AA 000 623 542 8 rnwuinp-MTiA- &*▼• of Hist- rical ru ---^ CONFIDENTIAL ^ ^ (^ bkte Aug. 7, 1947 MEMORANDUM FOR THE SECRETA^OF STATER ON THE DOMINICAN REPl'BUfcP R5 1948 *j J-.IB- PRESENT CONDITIONS OBSERVED DURING A RECENT VISIT— FINANCIAL SITUATION— HISTORICAL NOTES- AMERICAN INTERESTS-SOME SUGGESTIONS. March /?, rpo4. The Dominican Republic is approaching— indeed, if it has not already reached — a state of anarchy. The Provisional Government of des controls only those cities which his forces occupy. His ( , nt is probably growing stronger, but it docs not dominate the country and can not guarantee security to life or property out- side of the six or eight principal cities and their environments For weeks, bands of marauders, often owing allegiance to no cause and to no leader, save some small guerrilla chieftain, have taken up positions in the immediate vicinity of the capital and fired volleys from their Mausers into the streets and houses with fatal Up to the middle of February Santo Domingo City was in a st . and has been in a state of siege much of the time during the last three months. During this period the house of the Ameri. an • d'affaires on the outskirts of the town was pier, ed by twenty sheds. Almost daily people are wounded or killed in the stre , the city by some guerrilla, who fires from the heavy un- derbrush across the river. Our naval vessels have been fired at upon more than om ion by artillery ami rifles. One noncom- missioned officer was killed and an enlisted man re, rived a Mauser bullet in his hat. The American charge* d'affaires says the killing was deliberate and done by the direction ol one ol the insurgent whose name he has. An American steamer, whii h a naval launch was escorting to her dock at Santo Domingo City, was struck by more than twenty rifle bullets, tired by the Jiminez faction. The big sugar estates 15 miles above Santo Domingo ( ity, on the river, have suffered greatly from depredation, and reel s ho< on the par! ol the Jiminez followers and to tenl from the G ernmenl forces, though the latter propose to make all the losses which the) have 1 aused. The large and important American interests al and near San Pedro Macoris have been greatly damaged by being brought within the theater for fighting and plunder by roving bands. Americans have invested in this vicinity something more than $6, 000,000 in the sugar industry alone. The total American investments in the Do- minican Republic of an importanl and active sort are estimated to be worth about Sjo, 000,000. We found San Pedro Macoris, aboul to miles east of the capital on the coast, in the hands of an insurgent leader, who holds reso- lutely to it for the purpose of appropriating customs receipts. It has yielded him aboul S.^o.ooo in the last ten days. General Morales proposes t<> capture tins place, and in the fighting which will ensue it is probable that foreign interests will suffer severely. Tin' point which most gravely impresses the observer is that the so-called revolutionary movement headed by Jiminez is no longer controlled by him. It is controlled by no one. It is now largely carried on by independent country guerrilla leaders who owe alle- giance to no one and pillage the country at will, and who apparently have just two ends in view — first, to live without work; second, to get possession, if possible, of a custom-house for the sake of dispos- i ng of its receipts. The frequent and sometimes bloody civil wars in the Dominican Republic are not the outgrowth of an honest differ- ence of opinion or of a conflict of ideas or of the defense or assertion of some principle of policy of governmental action, but are shame- less, sordid struggles for the privilege of controlling custom-houses and disposing of their revenues. The country is largely in the grasp of desperately selfish, irresponsible political brigands. Many of these guerrilla leaders are little better than savages as far as their ideas of property rights and the rights of those weaker than them- selves are concerned. This country has enjoyed so-called independence for about sixty years. During that period more than $100,000,000 has been col- lected in the aggregate by the various Governments, and there is nothing to show that even one-twentieth part of this amount has been expended for the benefit of the Republic or the people or for public improvements of any kind whatsoever. You may search the whole island in vain for a score of miles of good highways, for modern adequate sanitary equipment, for suitable buildings for edu- cational purposes, or for anything which makes life better worth the living. This vast sum of money which has been taken from the people has been appropriated either for individual uses or wasted in unpatriotic, selfish civil war. At Puerto Plata, where I spent one night ashore, they were expecting an early attack from guerrilla bands, which were then not SRLF YRL [00370302 more than 3 miles from the city. I was warned that I would prob- ably have to leave my bedroom during the night and go to the cellar to escape the fire of Mauser bullets. This is one <>i the n important in the country, and from it a railway runs to Santi- ago, the chief commercial city of the Republic. This line of rail- way. 60 miles in length, is owned and rated by American citizens. Puerto Plata is the home President Morales. 1 made careful inquiri- it him from many - rid find that he is consid- i an intelligent, well-meaning man — one who is believed to be hon< ' >th in his public and private ity. I had a l< ng talk with his chief military supporter. General C vernor of Puerto Plata, w: 1 earnest, energetic young man. and who be- implicitly in the patriotism ol Morales and in his power to maintain himself. The American 1 harge d'affaires -it Santo Domingo Cit\ tnion 1 G neral Morales. I found in Puerto l number y well-informed and intelligent Ameii- ns At Sosua is situated 1 eat banana plantation of the United Fruit Company, comprisii ne 20,000 acres, one-fourth of which is ii' lltivation and producing fruit. This large estate has its Own railwi mploys '>oo men Two battles have been grit upon i; recentlj and the manager, Mr. Wetmore, told me he had to mily in a hut in the woods for several days. thickly about his nous At Santo Domii Cit iwing i" th< that there had been id that the insurgents were supposed to am »w river opposite the capital, prudent I he tut 1. • I • • tminican Republic ative, ] u ning, ..t nationalit) and with evident favor ol Moi ales and t lie polit ieians "t a perma- us t o m • 1 . . ernmenl ol t he : the ( ust.iins would put mi by 1 he natives, 1,, 1 the ■ t' . ( onflu t. and for ■ •.-. • ild make impossible the importation 1 1 ustom in mses there would be nothing for the revolutionists to fight for. The agricul- tural element in the population probably would favor this, and all ses would, I think, save the rather small contingent of military political freebooters who have nothing to lose and much to gain by maintaining a state of anarchy in the country. [f the Government of the Dominican Republic surrendered the administration o\ its fiscal department to the United States it would then be relieved of the necessity of fighting for t lie custom houses and could concentrate all its military energies upon maintaining peace in the interior. General Morales is willing and even desirous of making some such arrangement with this country, and, in connec- tion with it, giving us a long lease of Samana Bay, for which he would expect to receive a cash money consideration. lie would probably be satisfied with $100,000 in hand and $150,000 paid in half a dozen annual installments. Morales wotdd also agree to a supervision by us of public expenditures. Custom-house receipts should in the first year be more than sufficient to pay the annual budget of the Government and the interest upon all of its foreign debt. Any surplus remaining should at once be expended for the purpose of building roads and highways, which would give employ- ment to many of the people who are now engaged in the business of revolution. I am informed upon highly competent authority that the common soldiers would be glad of an opportunity to earn 75 cents per day at roadmaking, and that the officers would be glad of employment as superintendents and timekeepers. The building of good highways is one of the most pressing needs of the country. The Dominican Republic is, to my mind and in the opinion of those who know more of it than I do, the most attractive, fertile, salubrious spot of all the West Indian Islands. It has a wonderful diversity" of climate, soil, and altitude,- adapted to the production of all manner of fruits, vegetables, grains, and grasses. It produces excellent cattle. The altitudes vary from sea level to heights of more than 10,000 feet. It is an uncommonly well-watered coun- try. It has a sufficient number of good harbors and a climate, especially along the north coast, ideal. The beauty of the scenery is unsurpassed. I [NANCIAL SITUATION. In the consideration of the present situation in the Dominican Republic, and of the possibilities of international complications re- garding it, one of the most important elements to be taken into ac- count is that of foreign debts and claims. The bonded indebtedness of the Dominican Republic now out- standing is as follows: Unified 4 per cent scrip and French-American reclamation consuls 14 per cent) -. 600 Obligations Or de St. Domingue. 2 ; 4 percent Total amount of Dominican debt 3.885,350 The "obligations Or de St. Domingue." 2- ; 4 per cent, are held chiefly in Belgium — say, to the amount of /':.ooo,ooo. A consider- able number arc held in Holland, scattering amounts in Germany and France, and about ^25,000 in England. Of the ^1,148,600 of 4 per cent scrip ami bonds, about ^825,- 000 to ^850,000 are held in the United States and in England; the remainder in France. Of the amount held in England and the United States, not exceeding ^150,000 arc owned in England; the remainder, about ^700,000, are owned in the United States, but a considerable portion is pledged to creditors in England. The bonds owned in America are those of the San Domingo Im- provement Company and its allies, and such of these bonds as are pledged in England are pledged to friends of that company, with very tew exceptions. All the bonds held in England, whether owned there or only pledged, are represented l>y the Count il of Foreign Bondholders, who are acting in entire harmony with the Improve- ment Company. The total indebted) ' the Dominican Republic will not l>e than s^5,ooo,ooo. As to the disposition of the bondholders outside of the United md the attitude and probable intentions of their governments, there may be mentioned the following 1 11 1 1. < ; .:il',. mdholders, in d to t he I hit idi G ■ nment to instruct Lord ■ ininui. m with the United States G hi 1 he ob ction, so as to put Domii G nment ne to an immediate D Impi o\ emenl Company, under whi< h t lie « ompany It was undersl dholde ok this step in the I States, as proved i" be the 11 in behall ol its « itiz< but il "in il would have asked the 1 a dish subje< tS imle- : to a< t The British consul in Santo Domingo, early in 1902, was in- structed by his Government to cooperate with the charge" d'affaires of the United Stairs, and a copy or the purport of these instructions was communicated by the consul to the Dominican Government. As the result of the interposition of the United Slates, which was followed by a long negotiation, a protocol was concluded between the two Governments January 31, 1903, under which the claims of the San Domingo Improvement Company and its allies were settled for the sum («l $4,500,000, to be paid in annual installments, the amount of which was to be determined by arbitration. The board of arbitration has been organized, but all the monthly sums which the Dominican Government agreed to pay pending the arbitration remain in default except the first, which was for January, 1903. Since the signature of the protocol of January 31, 1903, the council of Foreign Bondholders has been resting in reliance upon the successful issue of the interposition of the 1'nited States. The attitude of the council remains unchanged. The interests of the bondholders on the continent of Europe are represented by two associations. One of these is the Association for the Protection of the Holders of Public Securities (Comite de Defense des Porteurs de Rentes Dominicaines), with headquarters at Antwerp and a branch at Brussels. Of this association there is a special committee devoted to the interests of the holders of Domini- can securities. The other association is known as the National Association of French Holders of Foreign Securities (Association Nationale des Porteurs Francais de Valeurs Etrangeres), and it also has a special committee charged with the interests of the French holders of the Dominican debt. These associations, representing the 2^ per cent bonds and such of the 4 per cent bonds as were held in France, entered, in June, 1901, into a contract with the Dominican Government, under which they accepted, in lieu of the general security, a special security, during the life of the contract, of 15 per cent of the Dominican ■nues, equal to not less than $300,000 per annum, specially se- cured upon the customs revenues of Santo Domingo City, and, in case of need, those of Macoris, and no others. Considerable sums were paid under this contract, although ir- regularly. The interest and disposition of tin- French Government in the matter was exhibited in June last, when the French ambassa- dor at Washington, on the 8th day of that month, addressed to the Secretary of State a note, hereto annexed as Exhibit B, officially calling attention to the interests of French citizens under the French- Belgian contract of 1901, and reserving their rights under that con- tract as against an}' possible award that might be rendered under the protocol between the United States and the Dominican Republic of January 31, 1903. FRENCH INTERVI N HON. Still later, in September of last year, the French charge^ d'affaires in Santo Domingo successfully intervened in order temporarily to divert the moneys that were being paid on the interior floating debt to the payment of the sums due under the French-Belgian con- tract of 1901. It may also be pointed out that under the com the French and Belgian bondholders have special representatives in Santo Domingo with important powers in respect to the custom- houses; and it was in support of the demands of such representa- tives that the French charge d'affaires intervened. Special attention may here be directed to a circular, a translation of which is annexed as Exhibit C, which was issued by the A ciation of French Holders February u, 1903. It appears that at the request of that association the French Minister of Foreign Affairs, recognizing and supporting the French-Belgian contract of 1901, authorized an official of the Ministry of Foreign Affairs. M. Maurice Charpentier, to accept the post of delegate under that contract for the French bondholders, lb- is --till in Santo Domingo acting as such delegate. In his No. 626, of October 29, ^03, Mr. Powell reported that Mr. Renoz, the Belgian charge d'affaires, had called upon him in <>■ to learn whether they could not agree upon some plan that would insure the payment of foreign creditors, Mr. Renoz represented that tin- payments due to Belgian bondholders under tin- 1 ontract of 1901 were in arrears to the amount of more than 5500,000, and that while Belgium could not physically enforce payment, she might, if had the moral support ol the United Si obtain what was He therel ditor nations should pro- i h< I tominii l I Ice < hi the cusb im- nd administer the 1 1 is plan was that should tx- done by n »nal commission, on whi< ..oid Belgium should each be repre- When Mi Powell inquired .is to how the add be conducted, Mr. Renoz replied that the was, but t hat it might !>>■ 1 e- quit ■ teadof to 1 he I h >mini< an ' . Ir. P ed t he 1 >pini< m 1 hat such an ar- :i< <• it WOUld not prevent ilation ■ He customs set vi< e w< >uld id that in ire effective set \i< <• 1 he 8 chief officer at each port would have to be appointed by the com- mission, and should be a foreigner. Mr. Renoz replied that the ilci.iils could be easily arranged if the United Si. tics would assent to the plan. In concluding their conference, cadi minister staled that he would brine;- the matter to the attention of his Government. It is. however, to be observed that the possibilities of early com- plications in the Dominican Republic are l>v no means confined to the interests of the bondholders. The conditions of disorder that have prevailed during the past three yens have given rise t< i very extensive claims on the part ol' citizens and subjects of various foreign pow Most of these claims were liquidated in June, [902, being then funded under two contracts, by which the creditors, as a special security for the payment of their demands, were empowered directly to col- lect 10 per cent of the revenues. The foreign claims thus funded were as follows : Italian citizens $\ , (a 3, 023. 61 man citizens 485, 655. 81 American citizens 396, 944. 81 Porto Rican citizens 7S, 845. 23 Dutch citizens 13, 590. 60 English citizens 23, 131. 85 In addition to the foregoing claims there is also a claim for $196,- 534, in which a German and a Spanish interest are blended, and which is guaranteed and means of payment provided by an interna- tional agreement between the German and Spanish consuls on the one part and the Dominican Government on the other. There are, besides, other liquidated and unliquidated claims, American and foreign, amounting to considerable sums. Some of these have already been liquidated, and among them claims of Italian subjects amounting to $379,312.78. PRESENT CONDITIONS. Among the liquidated and unliquidated debts, there are loans contracted by Governments and loans contracted by revolutionists, the latter class having been legitimized by the borrowers when they succeeded and became the Government themselves. The loans to ernments have often been obtained by them for the purpose of resisting or buying off revolutionary attempts. A certain portion, perhaps much less than half, has been incurred for entirely proper purposes. It should also be observed that a very large percentage, both of the liquidated and the unliquidated floating debts, is made up of accumulated interest, sometimes running as high as 1^ or even 2 per cent a month, compounded monthly, amounting, with com- missions and bonuses, in many cases to as much as the cash actually furnish' As an illustration of present financial conditions and manage- ment, the fact may be mentioned that from May i. 1900, to May 31, 1903, there was actually appropriated in the budget, calculated upon the basis of income and of peace: For agriculture, $15,240, all of which went for salaries; for public instruction. $101,749; fur public works, $69. 793: for war purposes. $1,183,202. No appropriations were provided for the contingency of actual warfare or revolution. The additional sums expended to put down revolutions are conjectural. as no accounts have been published except for the period from May 1, 1902, to March 31, 1903. The accounts for this period show an income of $1,700,576 and an expenditure for "war purposes" of $241,206, for "two revolutions" of $138, 113, and for "extraordinary expenses," the nature of which is not specified, of $27 1 .507. Assum- ing the $24 1 . 206 for •' war purposes " to be sums appropriated by the budget, the " revolutionary " and •'extraordinary" expenditures, not provided for in the budget, amounted to 5400,620, which doubtless was met by diversion of the moneys appropriated to the foreign in- debtedness, the payment of which fell into neglect. Among recent foreign demands, there are also accumulated French claims for repeated injuries, during the several revolutions in the Dominican Republic since 1S99, to the telegraph lines owned by the French Cable Company. Notice of these demands was given to the United Suites by the French ambassador in his note- of June S. 1903. All the claims here referred to. both liquidated and unliquidated, have arisen sini creation of the bonded indebtedness. It should lx- pointed out that practically all the great industrial and commercial interests of the country, as distinct from elementary agriculture, are owned or controlled by foreigners. The sugar •wned l>v Americans and Italians. Extensive banana plantations are owned by Americans. Of the two completed rail- Is. one is owned by British subje< ts. while the other is operated under a long leas.- i.\ an A in company, an ally of the San 1 .nip. in \ Vel .in' 'i her rail- instruction l'\ an American company. The exporta- ineil v in 1 he ha nds A 1 s. The oil fields developed bj an American company, The wharl pal pori S .ire owned bj Ami ommercial houses ai e ow ned or 1 ! Italian 1 1 \ 1 • Santo D I he English f< >rm San I >■ <■ mm-'. plied to th.it pari ol the am ient island of II p niola which is embraced within the Dominican Republic, the IO rest of the island being occupied l>v the Republic ol llaiii. In [82a the people of the eastern, or Spanish, portion of the island were subdued by the people of the western, or French, portion, called the Haitians; but in [844 the former reasserted their independence and set up a Government under the title of the Dominican Republic. In December, [844, the Dominican Republic, which was then still at war with Haiti, sent an agent — Sefior Caminero — to the United States to solicit the recognition of its independence. In the following year Mr. John Hogan, of New York, was sent out as .1 special commissioner to make an investigation and to report on the question whether the Dominican Government should be recognized. Mr. Hogan's report was on the whole favorable to recognition, but recognition was not granted; and subsequently, in 1849 anc l 1 850, the Governments of the United States and Great Britain jointly intervened for the purpose of bringing an end to the war between the Haitians and the Dominicans, on the basis of the latter's inde- pendence. The independence of the Dominican Republic was established, but the United States did not enter into formal diplomatic relations with the Government until 1862. Meanwhile, the United States had in various ways manifested a special interest in the Dominican Republic. In 1854 Captain (after- ward General) George B. McClellan w r as sent out by the Secretary of War to examine the harbors in the country, with a view to the establishment of a coaling station. He reported that the best har- bors in the Republic were those of Samana Bay, Manzanilla, and Ocoa. He strongly recommended the acquisition of Samana Bay, together with the whole peninsula and the adjacent keys, if possible. The bay of Samana is, as Captain McClellan reported, almost directly in the route of vessels using the Mona passage, the most impor- tant eastern avenue to the Caribbean Sea, whose importance will be immensely enhanced by the opening of a canal between the Atlantic and the P i tic at Panama. A treaty between the United States and the Dominican Republic was signed at Santo Domingo City on October 5, 1854, but it was subsequently amended by the Dominican Congress and the ratifica- tions were not exchanged. During the negotiations the Dominican plenipotentiaries agreed to insert an article lor the purpose of grant- ing a coaling station to the United States in Samana Bay, but they re afterwards induced to omit it because of the opposition of the representatives of certain European powers. On October 5, 1855, in- structions were given by Mr. Marcy, Secretary of State, to a special at of the United States to negotiate- a new treaty, and if possible 1 1 to induce the Dominican Government to agree to such an article as its representatives had withdrawn in the previous negotiations. In 1861 the Government of Spain, taking advantage of the situa- tion in the United States, reannexed Santo Domingo. The United States strongly protested against this act, but under the circum- stances the protest was disregarded. The Dominicans, however, were opposed to the action of Spain and resisted it, and in their resistance were aided by Haiti. In April, [865, the Spanish Cortez passed a law for the abandonment of Santo Domingo and this law was signed by the Queen of Spain on the 30th of that month. The events that had taken place in Santo Domingo, together with the experience during the civil war of the serious disadvantages resulting from a lack of naval facilities, led Mr. Seward in [866 to renew the effort to establish, a naval station in Santo Domingo. To that end he instructed Mr. F. W. Seward, Assistant Secretary of State, on December 17, 1866, to proceed to that country as a special envoy with full power to conclude a convention with the Dominican Republic for the cession or lease of the requisite territory to the United States. It was expected that the cession, if made, would be in full sovereignty; but if this could not be effected, it was stated that a lease for a term of thirty years would be accepted. In his instructions of December 17, [866, Mr. Seward said: During the Administration of General Pierce an offer was ma itain a lease of land on the Hay of Samana as a coal station 1 1 . 1 passenger ami naval steamers, and an army engineer was sent thither in a vessel • 't war for tin- pin pose ting a sit<-. Unfortunately, tin- survey was prematurely made before any arrangement had been concluded with that Government on tin- subject. The • the United States having become known to tin- representatives <>! some tates in that quarter, they had influeni e enough to thwart our plans. The late intervention ol Spain in tin- Dominii an Republic had its motive in a jealousy tation in Samana. It could not !"■ expected tint the undei will succeed, unless caution, and Admit. o Portei • 11. Mi l \\ - ird, when he arrived in Santo Domingo, enti elations with the Dominii uthorities and dis« ussol with them the ; itions which he was authorized i" make, but no con- ched. Mi Sew >on retu rned to the United and his |" 'V. ed to M 1 Sunt h, c< immei 1 ial 1 to Dom i I ty . [n 1868 P oid his . . mfidenl ial mil Mr, Felix eniially p M 1 Smil h in substance 1 hat, in view ol the cond >l things then ting in Santo Domin the I' United States should immediately publish a d.-i i 1 pla< ing the Dominii an Republic under the protei tion ol I 2 tlic United States, and should send vessels of war to take possession Samana and Manzanilla bays and of any other points that mili- tary strategy might indicate. Mr, Seward replied thai the Presi- dent did not consider himself empowered to take such a step, but that the subject was a very important one and would be submitted to Congress at the next session. EARLY l w k "I ANNEXATION. The subject was presented to Congress in the President's annual message of December 9, 1868, in the following terms: Comprehensive national policy would seem to sanction the acquisition and in- corporation into "in Federal Union of the several adjacent continental and insular communities as speedily as it can be clone peacefully, lawfully, and without any violation of national justice, faith, or honor. Foreign possession or control of these communities has hitherto hindered the growth and impaired the influence of the United States. Chronic revolution and anarchy there would be equally in- jurious. * It can not be long before it will become necessary for this Gov- ernment to lend some effective aid to the solution of the political and social problems which are continually kept before the world by the two Republics of the island of Santo Domingo, and which are now disclosing themselves more distinctly than heretofore in the island of Cuba. The subject is commended to your considera- tion with all the more earnestness because I am satisfied that the time has arrived when even so direct a proceeding as a proposition for an annexation of the two Republics of the island of Santo Domingo would not only receive the consent of the people interested, but would also give satisfaction to all other foreign nations. In a letter to Mr. Banks, of the House of Representatives, of January 29, [869, Mr. Seward said that the opinion expressed by the President that the Republics of Haiti and Santo Domingo were not unprepared for a direct proposition of annexation was inferred from the nature of the propositions which had been received from the Dominican Republic before the meeting of Congress, but that within the week then current a trustworthy and confidential proposal had come from the Dominican Republic for immediate annexation; that this proposal waived all preliminary stipulations and addressed itself simply to the discretion and friendship of the United States; and that an agent from the Dominican Republic awaited the action of the Gi »vernment. This correspondence was followed by the introduction by Mr. Orth in the House of Representatives of a joint resolution for the admission of the Dominican Republic, on the application of its people and Government, into the Union as a Territory of the United States, with a view to ultimate statehood. The resolution was not accom- panied by a report, but Mr. Orth said that it "had the approbation of a large majority of the Committee on Foreign Affairs." 1'pon his insisting upon the previous question, the resolution was laid on the table- by a vote of 1 10 to 63. J 3 In July, 1S69, General Babcock was sent by President Grant to Santo Domingo to obtain information. General Babcock, who bore instructions to that effect from Mr. Fish, sailed from New- York July 17, 1869. On the 4th of September he signed with Mr. Gautier, the Dominican Secretary of State, a protocol containing certain articles which were to serve as the basis for a definite treaty of annexation. General Babcock then returned to the United States. On November 16, 1869, he was instructed to return to Santo Domingo with a draft of a treaty of annexation and also of a con- vention for the lease of Saniana Bay. The treaty and convention were to be concluded by Mr. Perry, United States commercial agent at Santo Domingo City, who was to act under General Babcock's advice. Both the treaty and the convention were signed November 29, 1869. They were communicated to the Senate January 10. 1X70. The treaty of annexation, when brought to a vote, failed to receive the requisite two-thirds majority. The vote sto to 28. The convention also failed. In Ids annual message of December 5. 1870, President Grant, referring to the failure of the treaty, said that he was thoroughly convinced at the time that the Lest interests of the country, com- mercially and materially, demanded its ratification, and that subse- quent reflection had 1 onfirmed him in this view. I 'nder a joint resolution of Congress approved January 1 2, 1871, President Grant appointe immission to proceed to Santo Do- mingo and report upon its political and social condition and as to the disposition of tin- people on the question ol annexation. The nbers of the commission were Benjamin F. Wade, ol Ohio; Andrew I >. White, of New York ; and Samuel (i. Howe, of Massa- chusetts. The 1 ommission visited the island, examine. 1 its resources, and sustained l . y its report the policy recommended by President Granl In communicating the report to Congress President Grant, referring to certain personal features ol the opposition that had led to the failure of the treaty, said ; -|1,. n bj ihi ited by tl><- President only i n ,ll, .,-• nion an tments ol the < ro\ ei nment, with. nit touching the chara nding l But when nli ih- • nlj made ol 1 orruption ,,,, ,| lf . part of the P ed bj him, the 1 .is.- is different. 1 demam ation, I his has )„.,.,, ■ rew iili tram m it ted, and u .|,j, |, f u n, ■!, ..; id. ise w ho repn 1 ented ,1,,. 1 is fin ii hed, and with ii 1 I These remarks *>i the President were understood to refer to a speech made by Mr. Sumner when the resolution for the appoint- ment of the commission was pending before the Senate. President Grant did not further urge the annexation of the Dominican Repub- lic upon Congress; but in his List annual message of December 5, [876, he reiterated liis adherence to the views on which he had originally acted and which he had presented to Congress in 1870 a ml 1 S 7 1 . It is understood that certain negotiations were conducted through Mr. Durham, American charge d'affaires, in [892, lor the acquisition of Samana Bay by the United States, but there is little record of them in the 1 depart ment. REVOL1 1 IONS. It is needless to enter into the details of the revolutions that have taken place in the Dominican Republic since the establishment of its independence. For the understanding of the present situation it suffices to go back to 1898. In May of that year an expedition left the United States on the steamer Fanita. ostensibly to aid the Cuban insurgents. As the United States was then at war with Spain, the expedition is understood to have had the support and active aid of the United States Government for the purpose named. The expedition, however, did not go to Cuba. Its nominal com- mander, "Captain Rodriguez," turned out to be Senor J. I. Jiminez, a Dominican, and its destination the port of Monte Christi, in the Dominican Republic. With Jiminez was associated Gen. Augustin M< Males. They landed at Monte Christi, where mostof them were shot. Jiminez himself escaped and fled. Jiminez subsequently renewed his revolutionary schemes; and on July 26, 1899, President Heureaux was assassinated. A few days later Senor Ramon Caceres, who had shot him, and Gen. Horacio Vasquez, acting with certain other per- sons, started a revolution. The revolution spread in the interior of the island, and on August 29, 1899, General Vasquez was proclaimed by a committee of citizens as President of a Provisional Government at Santiago. On the assassination of Heureaux, Vice-President Figuereo had assumed the Presidency of the regular Government at Santo Domingo City; but on August 30, 1899, he resigned, and on the following day the members of the Cabinet abandoned their posi- tions. The forces of General Vasquez entered the capital on the 5th of September, and he then became the head of a Provisional Gov- ernment, which was afterwards recognized by foreign powers. The Government of General Vasquez continued till November 20, 1899, when Sefior J. I. Jiminez succeeded him as "Constitutional," or Elective, President, with General Vasquez as Vice-President. Sefior Caceres was appointed governor of Santiago. The Government of Jiminez lasted till May 2, 1902, when, after' a severe struggle, it was overthrown as the result of a revolution headed by General Vasquez, Vice-President, who then became Presi- dent of another Provisional Government. In October, 1902, local outbreaks began to take place, and they continued till March, 1903, when an independent revolutionary move- ment was started at the capital under the lead of Gen. Alejandro Wos y Gil, who, on April 18, 1903, himself became the President of a new Provisional Government. Before this revolution took place General Vasquez had called an election, but the revolution pre- vented it from being held. General Wos y Gil, after Ids installation, also called an election, and in due course he was chosen "Constitu- tional" President to succeed himself as Provisional President. Among the causes of the revolution against General Vasquez, as narrated by Mr. Powell, American charge d'affaires, in a dispatch of January 14. 1003, was the refusal of General Vasquez, who seemed desirous of placing the country in a better condition and of prevent- ing a wholesale pilfering of public funds, to continue the monthly stipends of a number of men termed "chiefs'' in their districts, who filled no public office nor performed any public work, but who. be- sides keeping the President informed of any discontent prevailing in their sections, were expected, in case of an insurrection, to mar- shal their friends and tight on the President's side. This practice, according to Mr. Powell, originated with General Heureaux, and reached during his Administration an abnormal development, so that there were several hundred such men in his pay. The pi had been largely continued by Jiminez. General Vasquez sought to restrict if not to abolish it. LA rER I \ 1 N 1 S, On August 31, 1903. the Secretary ol Foreign Relations of the G ernment of General Wos y Gil submitted to the Dominican Congress a projei t for the neutralization of the territorial waters of the Republh and the establishment of free ports al Samana and Manzanilla. The sul.stain e of this projei I. the : ied design of which was to prevent the acquisition ol special privileges by any nation. 7, a , .1 without ition <>f th<- waters, ba iblii . w mIi tin- • 11 "I tin right to defend 1 1 1 with th< the Republh In 1 ase ol f< u all. i' k 1 IIS. nil]. 1 to I"-, in iiu-ii outei i'. 11 is. -, to ih. il' '.iik nations, tli<- < \o\ ei nmenl r< iriK t" itself the inn< hm» nl 1 lations. 1 that the Domic public would erect wharves, stationary 01 ind other structures necessary and adequate for the anchorage, repair, docking, and traffic ol vessels in the waters of the two above mentioned, and would organize administrative services therein for moderate compensation. 4. To authorize the Executive Power to conduct negotiations and financial itions necessary to obtain by .1 loan the funds for such purposes. ;. A-- a security for the payment ol this loan to apply, among othei things, ilu- able proceeds * > t the contracts ol peaceful use and enjoyment of the resorts in question, .is well .is the proceeds derived from concessions foi locations upon their shores for commercial .mil industrial purposes. In consequence ol the protest of Mr. Powell, the American 1 harg6 d'affaires at Santo Domingo City, this project was withdrawn from the Congress. On October 26, 1903, Mr. Powell reported that the governor of Puerto Plata, Sefior Carlos F. Morales, had pronounced against the Government of General Wos y Gil, and that that district was again in insurrection. The movement, said Mr. Powell, appeared to be in favor ol Jiminez, the late President, and if it should succeed would not bring peace to the country, as the Vasquez party would not ac- cept as President either Jiminez or any person named by him, nor would Jiminez accept either Vasquez or a member of his party. There were then three parties — the Wos y Gil, or Government, party, the Jiminez part}-, and the Vasquez party. General Deschamps, the Vice-President, on learning of the revolutionary movement, had left Santiago for Puerto Plata. On October 30, 1903, Mr. Powell reported that the Government, immediately after the breaking out of the insurrection at Puerto Plata, sent both of its naval vessels to that place with troops, under the command of the Minister of War. On his arrival the Minister of War demanded the surrender of the place on pain of bombard- ment. He remained there two days, and then left for Samana Bay without having executed his threat. The only result of his visit that he prevented the Clyde steamer Cherokee, as well as a Cuban steamer, from entering either Puerto Plata or Samana, a shot hav- ing been fired across the bow of each vessel as a warning not to enter. Barricades were then being thrown up at the entrances of - 1 1<> Domingo City, where an attack was expected. Writing on November 4, 1903, Mr. Powell reported that the posi- tion of the Government of Wos y Gil was growing weaker, but that the state of affairs would not be improved if the insurgents should win, since there would within four months be another revolution, for the same reason that had brought the existing one about — namely, the desire to obtain control of the customs revenues. On November 6, 1903, Mr. Powell reported that Macoris, where there were large American interests, had been bombarded by a Do- minican vessel of war. 17 On the 7 th of November the insurgents reached Santo Domingo City and began an attack by throwing shells into it. On the nth of November Mr. Powell reported that theie were then two German men-of-war at Santo Domingo City — the Panther and the Gazelle — and that an Italian and a French vessel were ex- pected immediately. On the 25th of November, after repeated attacks, Santo Doming Citv was surrendered to the revolutionists under the lead of Morales. The guards placed by the foreign naval forces around the legations and consulates of their governments were withdrawn. It was agreed that an election for President should be held; but Mr. Powell ex- pressed the opinion that if limine/ should be elected another r< lution would break out within three months after his taking the oath of office, and that the same thing would happen if a strong par- tisan of General Yasquez should be elected. If a new man should be chosen who would command the support of all tactions lie might be able to maintain peace if he could improve the financial situation ; but if he could not a revolution would again occur. The pit-sent revolution, said Mr. Powell, had cost the country nearly >;oo,ooo, and the new Government came in with an empty treasury and with all the resources of the country mortgaged and with no means of obtaining funds. '"As it stands to-day," he said, "the country is virtually bankrupt, and this condition, .is 1 have stated in .1 former communication to the Department, implies danger to our Govern- ment, as foreign creditors will demand payment of their claims, which demand will be enforced by the guns of foreign naval vessels. At the same time our citizens will make a like demand. This is the grave danger which confronts us, and it will demand the wisest statesmanship to avert it."' in DISTl On December^ [903, Mr. Powell reported that the political situ- ation was still disturbed. The Provisional Governmenl oi Morales was in lull control, but there were signs ol unrest. The adher- ents of fiminez desired to elect him i President, while the adherents f General Vasquez seemed to favor Genen I Morales, although he had previously been .1 revolutionary adherent ol Jiminez. Since the advent of the new G ernment, disturbances had occurred at Mont( l iristi, Samana, La Vega, Azua, and Borahona, but had Deen SU pp In .ill tho there were many partisans of [iminez Tl G ernment had ■ I a decree declaring that all g Uai an nd that 1 ustoms revenues mu II be paid i n , h. The m< nts had and had not ified 1 he I , .,, 1 h a i 11 th. enfon ed they would nol im D IS any goods. It was probable that a compromise would be readied. There was much firing in the streets at night, in which many persons had been killed, so that it was unsafe to go OUl alter dark. t >n the r2th of December, Mr. Powell reported that limine/, was at Monte Christi with a number of his adherents, and that it was supposed that lie would within a tew days organize another revolu- tion. Morales was preparing for the conflict. December 15 Mr. Powell wrote that a member of the Govern- ment had inquired whether the United States would lend or advance it money. 1 1 e had replied that the Government of the United States could not advance any money without the consent of Congress, and that it would therefore he useless to appeal to it. The situation in the Dominican Republic in December, 1903, is vividly set forth in a letter addressed by an American citizen, Mr. W. L. Bass — the largest sugar planter at San Pedro de Macoris — to Mr. Powell on the 12th of that month, and communicated by Mr. Powell to the Department of State with his No. 688, of the 14th of December last. A copy of this letter is hereto annexed, marked Exhibit A. December 15, 1903, Mr. Powell reported that the Dominican Re- public was in the throes of another revolution, which bade fair to be serious. He had previously expressed the opinion that another revolution was impending, but he did not think it would occur before March. The new attempt was started by friends of Sefior Jiminez, whom the Vasquez party joined Morales in resisting. A fight had taken place at Santiago, where several of the Jiminez party were killed. An attempt had been made to kidnap General Morales, the President of the Provisional Government, but had failed. Arrests had been made and the situation was critical. Sub- sequently General Rodriguez, governor of Macoris, "pronounced" in favor of Jiminez. The followers of Morales at that place then took up arms in order to force the governor out. Mr. Powell states that there are large American investments in sugar estates at Ma- coris, amounting to $500,000. The people about Macoris were said to have turned from Morales to Jiminez because the forces of the former were without ammunition. Similar conditions of disorder have continued to exist and ques- tions have continually arisen as to blockades, bombardments, and other militarv measures. J 9 THE CUSTOM HOUSES. Since my return to Washington I have received the followi letter from Mr. Powell: \ 1 (ON ' IF THE I'M I 11' Si ITES, nto Domingo City, D. A'., March j Hon. Francis B. Loomis, Assistant Secretary of State, Washington, D. C. Sir: Since my informal interview with you on the Mayflower I have hastily secured an approximate estimate of the cost in carrying into execution the admin- istration of the customs service. 5TOMS REVENUE. At the present time no authentic figures can be given as to what the customs revenue for the past year has been, but from figures at hand, during the last year of the Improvement Company, under the direction of the Hon. J. T. Abbott, the customs revenue was greater than that of any preceding or subsequent period. closely approaching $2,500,000. This was mainly due to the judicial management and retrenchment instituted by Judge Abbott, though at the time there were many high-priced officials, which, if the same service should pass under the control of our Government, it would not have. 1 Aim 1 . In the first place I would suggest a new arrangement of the tariff. The present one was made several years ago and was based on the currency then in use. which was almost exclusively paper. This tariff could easily bear a reduction o( 20 per cent from its present figures and be made to return a much largei revenue, and by a strict espionage of imports the 1 revenue within a few years would in- crease from, say, 5j, 000,000 to $4 000 or $ 0. Under a reduced tariff there would be a larger consumption of goods, and as these people almost exclu- sively buy in mir market we would be the gainers and with a strict customs law governing all imports all smuggling that now takes place would end. In this connection it would b to remove all export duty, as it would be an incentive to stimulate tin- peo] lively into agricultural pursuits, which would have for a ng of all revolutions in the interior. This step would increase agricultural products, whi< h would find their market in the United S aid which would also mean it purchases in our market. This of the 1 The other it would lie iin: I any di d or ambitious j son to start a revolution; would do away with what is known as i> ..i pett) chiefs, that the Government ha tantly to pay annually to keep them quiet. Under this changed condition all this will be done away with and within tw three ifter there will be a mai in both Government and people. The cost that wou the G nt, which would be charged to the ,,,li,., £57,000, possibly a little 1 1 arnl would I.-' di\ SantO I >>■:■■■::. I * I San. hez : Ma< oris Samana Monti ' , 20 The necessan force to collect ihis revenue would be: I v--, i Iption. Plata. Director of customs Assistant director Interpreter • ks .- watchmen 3 laborers Miscellaneous expenses a Macoris, Director Assistant din interpreter j clerks Watchman j laborers Satnana, Montr CAristi, and . i Director 3 assistant directors 3 interpreters 3 clerks ; watchmen 3 laborers Mi. nth. ■ las 75 6o I" 200 IOO 75 6o 50 30 75 60 60 50 40 3° Yeai ■ . ii" ' . 1 1" 20 2,400 900 '.ii" 600 720 900 720 720 600 480 360 Two $7,200 2,880 2,880 I- 4,800 2,400 1,800 2,880 1,200 1 .ii" 2,700 2,160 2,160 1,800 1,440 1,180 The ports of Santo Domingo, Puerto Plata, Sanchez, and Macoris may be termed giving ports — that is, the revenue received from them is such as to make them the main ports of the country — while the ports of Monte Christi, Samana, and Azua are known as the receiving ports — that is, the revenue received is not sufficient to maintain the Government at the place named, the Government having to make up the deficiency. I would suggest in this connection that the ports of Romana and Barahona be closed. The first is used for exporting crude petroleum; the latter, woods, etc. But both of the places are used largely by those who are endeavoring to evade paying duty. During the time the Improvement Company controlled the customs revenue their expenses for officers were $30,000; for other employees, about $45,000; or, all told, about $75,000. Under the above schedule there would be a saving of $18,000. In giving these figures, I am making them so that those who have the greatest responsibility shall receive remunerative salaries, as the cost of living here is cal- culated on a gold basis and is much higher than in the United States. Bl I". 1 1 . I stated that the budget during the Vasquez Administration was about $2,000,000; I have since learned that it was $1,600,000. This could be reduced $100,000, as the Government would not have to pay the jefe.s that I have already mentioned; would not have to maintain a large standing army, nor maintain a navy, as, in the first place, in the cities there could be organized a strong police force; in the country districts, a rural guard, as in Cuba, to maintain order and surpress all attempts at revolution. As there would be a naval vessel stationed at the principal ports, they would have no use for a navy of their own. 2 I At each place where there is a custom-house, for the first one or two years a marine guard of about ioo men or 700 men in all would have to be stationed. This would only have to be maintained for a limited time until the Government got control of the situation and the people had become acquainted with the change of affairs. IMPROVEMEN 1 S. Under this changed condition emigration would be directed here, roads would be built between inland towns, and railroads would connect all parts of the Republic. This of itself would develop the rich resources of the country, such as its valuable timber; would open up the mineral deposits of the country to an extent that at the present time one can not imagine, and restore the Republic to the condition of its early days when it was under the control of Spain. Most of this mineral wealth remains undiscovered as well as undeveloped; all that is needed is a stable government that will invite and not deter capital. The Republic's petroleum wells are among the finest in the world, but they have remained in a state of nature simply because no one can feel safe to invest capital in their development in a country where revolution is ripe at any moment. PAYMENT OF THE V\ 1 [ONA] Dl As I have stated to you, it is our duty to protect these people whether we like to do so or not; it is pressing upon us daily. If we do not, some country, when we least expect it or when we are the least prepared to resist it, will contest our right. Foreign governments will not resist much longer the pleas of their citizens for paj - ment of claims already accepted and which the Government has agreed to pay within a given time but has failed to keep those engagements on account of the disturbed condition of affairs which is y onstantly growing worse. This rnment will probably succeed in establishing itself, but it will only be a brief time before another revolution will occur to drive the Government from power, the incentive being the revenue derived from some custom-house, or some dissatisfied jefe, who think that the Government had not paid him enough for his support. This is certain to occur unless we intervene on the lines slated to you. Then, again, v a duty to our own citiz* : time we have sent two cases t" arbitration. In a few month -ion will be rendered, and in the present condition of the country thi n to commence a partial payment. 1 aims, too, of tl tei from oth rnments that antedate ours. It 1 duty, pardon me in stating it, to see that our , ] lw , 11 the nation. ,i dignity. The claims I more: To the lmpro\ e- menl Com;. ' : "">. ; tration, ; '■ Puent< | to Mi Ros, 1 ■ If the 11: hi - ernmeni within "" , within that time ,nd .it the s.im. i noi : y mil' h lied our authoi ''">'• whii h 22 I \ I < I \|\|N. Owing to the several revolutions there are many claims to be considered, for some of which the present Government must be held responsible; others, from pro- ceeding Goverments; and others, again, thai are purely from the pillage and destruc- tion of property during the present suite. Many oi these claims are for sums that are entirely out of proportion with the loss sustained, All such claims should be thoroughly examined before payment is made; what is just should be given to the claimant, .mil ibis can only lie determined through an impartial commission. The President has assured me that be is willing to lease the bays of Samana and Manzanilla to our Government for any length of time that our Government may name; that the amount to be paid should be retained to pay the creditors of the Republic. Also, he wants the United States to administer its customs. W. F. Powell. SIGNIFICANT FACTS. In February, 1904, General Morales, Provisional President, sent General Sanchez, his Minister of Foreign Affairs, to Washington to make an offer to lease Samana Bay to the United States and to sug- gest that the Government of the United States assume some sort of a protectorate over the Dominican Republic. General Sanchez' overtures met with no encouragement. In this connection the following cablegram from Mr. Powell, dated March 18, may be of considerable interest: It is reported that the President of Haiti has sent commissioners to President Morales [to ask] him to break off all relations with the United States, threatening in case of refusal to give active assistance to Jiminez. The Haitian President desires Morales to meet him at Manzanilla Bay. The commander of the Hartford, under date of March 15, 1904, wrote to the Navy Department as follows: Arrived at Monte Christi Sunday and met Jiminez, who wants peace and sug- gests that the United States intervene to secure it. To establish about the same relations as Cuba has with us under the Piatt amendment. Does not consider it necessary to land armed force, but a commissioner to convey our determination to secure fair election. Rear-Admiral W. C. Wise, commander of the Atlantic Training Squadron, which has been in Dominican waters for several weeks, referring to the talk which he had with Jiminez at Monte Christi, says: He assured me that he was heartily in favor of any action by which peace could be brought to his country. He said that the President of Haiti had recently offered to arbitrate, which he accepted, and that the same offer had been sent to Morales; that there were two factions bitterly hostile to each other, and the only solution to the matter was that our Government should intervene and secure a general election, appointing temporary governors of the Provinces. * * * I expressed to him the absolute necessity that our interests and all foreign interests must be protected. -3 Admiral Wise further says: Unquestionably the time has arrived when our Government should take a very determined action in this matter. In this connection I desire to state that I think the situation in the Dominican Republic can be kept well in hand and the status quo maintained, with due protection to American interests for the time being, if Commander Dillingham, of the Detroit, were put in charge of those waters with perhaps two smaller vessels to assist him. He has given great thought and attention to Dominican affairs. and his action at Puerto Plata and other points where he has had to deal with both factions under arms has been characterized by judg- ment, justice, firmness, and discretion. He seems to me to be just the man for the place. I think my opinion is concurred in by others who know him and who have had reason to observe his work in Dominican waters. I annex a copy of a letter forwarded by Captain Dillingham, of the Detroit, the original of which was found at the Government House at Santo Domingo after limine/ had escaped and the Morales forces took possession, January 20. It is signed by on.- of limine/' chief leaders: nslation.] Hi u»<..i 4.RTERS "I I ill ClVIl AM' MlLITARI GOVERNMENT, Monti Christi, January iS, IQ04. [)■ in Juan I. Jimp- Supreme Chief of the Revolution, Santia Esteemed Don b an: I ha ommunication ol the nth instant, and have taken in leration all the points treated therein. I am fully in: 1 all that has happened in Puerto Plata, and we should not allow ourselves to I 1 ipon, cither by Americans 01 anybody else; the country should be allowed to perish fit town i" be • annonaded, and dis- tribute your and mosl d n along the highroads approaching the town. This is for us a matter ol lil ith, and we must continue the struggle with faith, and not lose hi Make your an n sui h manner as will permit you to wail the arrival of ammunition, which will n, and thei quickly mat- ters will take anothei turn. \m.-i ; lured Puerto PlaU 1 should show 1 one, and ''"' ' " nMlis - ■"" 1 ■ 10 return. Strength) 1 Bnai P 1 path, I will ix.M ti 11 men, and stimulate them to t ..In with ' &J u " ll them. I tl , j .u well know w hat tely no guaranty, as lias and it is mui -I Prepare your artiller) so as to cannonade the enemj should they advance on you Order the fort at Puerto Plata to cannonade the town, and see il you can send a man to interrupt the cable so that they can nol communicate with Turks Islands. Send a force over the Pale Quemade road, and, in combination with the fort, attack the enemy inside tin- town. Instruct Andres (Navarre) to actively push the cannonading of Santo Domingo City, and tell him w hold firm, as matters to-day more than ever need a decided and resolute attitude, so that he must push the siege of the city and try to take it as quickly as possible. What is needed is to train cannon on all points of the town; this terrorizes the enemy and causes the consuls and private families to plead for surrender. Do not lose hope, but make use of your brains. Order your people when the enemy approaches only to fire volleys at point-blank range. Tell them at Puerto lM.ua Fort to hold themselves firm. Offer the troops which attack Puerto Plata the license to pillage, and you will see how gladly and contentedly they will follow you. Do not lose faith for a single moment, and forward. Always your friend. (Signed) Desiderie Arias. Attention is invited to the foregoing letter on account of its expressions concerning Americans, foreign consuls, and other foreigners. ANOTHER LETTER. A belated letter from Consular Agent Reed of the United States at San Pedro de Macoris throws a vivid light upon existing condi- tions in the Dominican Republic. Under date of February 21, 1904, Mr. Reed writes : < *n Friday, February 19, about 5 p. m., the Dominican gunboat Presidente, with her tender, the coasting steamer Estrella, anchored off this port, apparently carry- ing a good many troops. At 9 p. m. the clerk of the city council called upon me with a letter addressed to the foreign consular officers resident at this place from the commander of the expedition on board the Presidente, Mr. Romainc — the Min- ister of the Interior of the Provisional Government — in which he acquainted us with the fact that he had demanded the surrender of this city from the insurgent general D. Rodriguez, and that in case of refusal by the latter to his demand he would give six hours' grace for the removal of noncombatants before he commenced bombarding the town. He requested our good offices with General Rodriguez in persuading him to grant his demand to avoid any unnecessary bloodshed, etc. As it was an impossibility to remove all noncombatants during six hours of darkness, the consular officers of the different nationalities resident here agreed to demand an extension of time until Saturday noon of the 20th in order to get the people out of the town, since General Rodriguez refused to comply with the minister's request. I did not fail to point out to General Rodriguez that this was not a forti- fied town and that a bombardment at close range by t he gunboat Presidente would cause a great deal of loss of life and property, especially to peaceful foreigners, who comprised two-thirds of the inhabitants of this place; but he was deaf to all argument and entreaty and the letter was sent to the commander of the expedition, who replied that all the extension he would grant was until Saturday, the 20th, at 8 a. m. 25 By 7.30 a. m. the bulk of the people had left the town for the country, and the idente and Estrella steamed into the harbor, where they anchored about [,500 yards from the wharf, and at S a. m. precisely opened fire upon the town with bis guns and rifles. Though the firing from big guns and small arms was very rapid — certainly more than five shots to the minute during three hours — the damage was small, since apparently all the shots from the big guns went high and over the town into the country; and when at 11 a. m. the Estrella^ crowded with men and having two boats in tow also full of men, started for the custom-house wharf for an assault upon the town, the commander of the gunboat had failed to clear the place of landing and also to get a range for his guns to protect the landing of his troops, and the latter, when arriving off the end of the custom-house wharf, were confronted by the solid ranks of the insurgents, who not only prevented their land- ing, but slaughtered the crowded men in the boats like sheep in a pen. and. though the Estrella handled her bow gun very well and effectively, the nonsupport of the Presidents ' s guns made the attempt to land a failure. In less than ten minutes half of the assaulting force was killed, and the Estrella had to steam back rapidly to save the remainder, not a single soldier ever being able to make a landing. Observing all this very closely with a strong marine glass from the veranda of my house, I could not heip wondering at the stupidity of the man in command of the gunboat in not landing one shell in front of his men for their protection. The Estrella, on her return to the gunboat, first steamed out of the harbor to get rid of the dead, and on her return to the gunboat took the wounded on board and steamed to Santo Domingo City, the gunboat continuing the bombardment until sundown. when an armistice was arranged between the opposing [ones for three hours, os- tensibly to rest the men but in reality to enable General Rodriguez to rei 1 live and mount a heavy gun, for which he had sent the previous evening, < M course, it is hard to get at the exact figures of the loss on both sides, but al a moderate esti- mate the assaulting party must have lost between thirty and forty men and the insurgents from twenty-five to thirty: among the latter was the insurgent general Herrera, shot through the head. The bombardment by the Prt n iente, an entirely useless one, lasted from 11 p. m., throughout the night, until 7 a. m, Sunday, the 21st, when, the commander of the gunboat — no doubt observing the insurgents busy at the mounting of a heavy gun — left his anch rid steamed out I firing ceased, Without exaggera- tion, there certainly were tired during the twenty-one hours of the engagement over [0,000 shots of all arms, but the lirit terribly wild. My own hou though entirely out of tin- proper rai ire was stru< k thre< times and so were a great many others on the point here, entirely out ol the range ol firing. ) There is the faction known as the followers of the Government which pre- ceded the last one overthrown. It is known as the Horacitas, though Gen. Horacio Vasquez himself is a sick man and no longer capable of taking the field. This ele- ment is opposed to General Jiminez, whose Government is but lately overthrown, and at the same time not to be reconciled by any retention of power by the existing Provisional Government. (c) There is the regular Jiminestas, or followers of General Jiminez. This is a powerful faction. It openly declares that if Jiminez does not secure the Presidency they will at once take the field. This faction boasts of being powerfully armed, located in the northwest portion of the country known as the Monte Christi district. The leaders and lieutenants of the various factions are determined men, and their followers are well armed with modern weapons and ammunition so bounti- fully distributed by both the late Government and the leaders of the late uprising, and which arms were not collected prior to the disbandment of the various forces by the existing Provisional Government. As no one paid the troops, each man could not be refused permission to carry his rifle home, together with all the ammu- nition that he could carry home. These rifles are not antiquated weapons, but Remingtons, Mauser carbines, and Remington-Mausers (the latest arm introduced into these countries, which is a Remington carbine carrying a regular Mauser car- tridge). The possessors of these weapons are ready to take the field at any moment and are flushed with the late triumph of having overthrown the Government. They are not interested in any other idea than that they have just demonstrated that they can overthrow the Government, and are ready and waiting to prove that they can repeat the act when called upon shortly. They at present are not concerning them- selves about work, but resting after the late campaign and waiting to take the field afresh; they well know that there are several candidates for the Presidency, and that they will be shortly called upon to take the field. If you of the outside- world ask for what compensation, I can truthfully state, An opportunity to acquire a higher military title than that which they have just acquired — for instance, one- campaign of government overthrowing affords the grade of captain; two, of colonel; three, of commandant; and four, of general. 2 9 The last government-overthrowing contest confined its operations to: (a) Besieging and firing upon the fort at Puerto Plata. (b) Besieging and firing upon the fort at the inland city of Santiago. (V) Besieging and firing upon the seaport and capital (Santo Domingo City). (utside wot Id li the men y ol a ny 3° throughout the trackless forests. When the next uprising takes place those in the interior will promptly cut the wires. What is, in my humble opinion, and shared in by everyone with interests here with whom 1 have lately conversed, most necessarj al once is that the United States, 01 some othei powei 01 combination of power--, maintain at least three men-of-wai on the coast of this political volcano until the existing state of a< tuaJ chaos has become straightened out. The mere presence of these men-of-war would suffice to prevent active fratricidal warfare; for, as stated, the prospective out- break is not a [evolution operating against an established Government, but is to be a factional contest as to which party of three or more, by force of arms, is to secure control. At present the leaders of the various fat tions are loud in the cry for harmony, union, and peace. Peace is, next to money, the one thing desired; for it is, in evidence to the natives themselves, almost the unattainable. One man-of-war should he stationed at Puerto Plata. It could there command that important seaport, the neighboring inland city of Santiago, and the near-by port of Monte Christi. One man-of-war should he stationed at the head of the Bay of Samana at the port of Sanchez. This is the outlet of the railroad that runs from the port up the valley westward toward the interior. ( 'lie man-of-war should he stationed at the capital city of Santo Domingo to look after Azua, the city, and the near-by port of Macoris. This latter port has over {5,000,000 worth of American capital invested in sugar estates within a dis- tance of 10 miles of the port and has many American residents. These investments require order for their preservation and peace for their operating. The writer is well aware that the United States has no intention of annexing this Republic; but you must be aware that the various factional leaders play upon the sentiments of their followers and maintain a lively anti-American sentiment, erous to both life and property in a moment of an uprising such as is expected daily. In this matter of agitating anti-American sentiments, European resident merchants are not exempt from lending their silent and constant influence, for the frequent changes of Government afford opportunities for exorbitant loans and dis- counting of custom charges. There is no " Piatt amendment " for Santo Domingo. There is nothing to prompt the natives to hesitate before following their most destructive and sanguinary promptings. You well know that the man-of-war of the late constitutionally established Government deliberately shelled this undefended seaport town of Macoris with hut two and one-half hours' notice and unaccompanied by any attempt to land forces either before or after the bombardment; also, that if more damage was not done it was due solely to the faulty marksmanship of the gunboat. This in no wise lessens the outrage done to a civilized community, and it is understood by the natives that the representatives of foreign powers did and have not reproved the Government that did it, or its successor, the provisional one. On the contrary, it is known that the incident was lightly considered, as the damage was slight and no human lives were sacrificed. The Americans here are prompted to believe that you are conversant to a great extent with what has been expressed in the foregoing, and they at present are largely concerned at the outlook. Two questions confront them: 1. Are the advance agents of American trade and industry in this country de- serving of timely personal and proprietary protection, or do they forfeit all claim to suitable protection when they invest their capital in a near-by, though foreign, country ? 2. Are such Americans and their interests to be first sacrificed in order to warrant 3i the sending of men-of-war to these shores to advance claims againt a bankrupt country in the interest of the heirs of those sacrificed and the assigns of ruined enterprises? The present moment is no time to diplomatically consider whether the Provi- sional Government is going to acknowledge any pecuniary claims and devise means for their settlement. Neither is it any time to entertain ideas relative to the acqui- sition of the Bay of Samana by the Government of the United Slates in order to anticipate any European designs. The immediate restoration and maintenam order is the paramount consideration; for all attempts to collect daily increasing foreign claims are abortive if industry and commerce are not to be allowed to pro- ceed and the custom-houses (the only source of public income as well as prompt- ings of political strife) are not permitted to produce revenue. Now is the moment to locate at least three men-of-war on the coast and an- nounce to the contending factions that, although there is no Piatt amendment, upon the first promiscuous use of firearms order will be maintained by foi force until the natives will have decided as to which candidate is to be the Presi- dent and which faction is to be in control of the Government, and that meanwhile modern industries must be allowed fo continue to operate and life and property respected. Many of the leading natives who can afford it are preparing to leave the coun- try, while others not so circumstanced confess that the country has reached that stage where "the country is ungovernable. ' Upon you, Mr. Minister, rests an enormous responsibility at this time. As tin- diplomatic representative of the United States, many of whose citizens have large invested capital here, their families and American employees, you are looked to to take the necessary precautions to avoid an unnecessary amount of bloodshed among the natives and perhaps foreign element. The present is respectfully submitted to you in all seriousness and respect. If in any expression you may interpret an element of lack ol se, such has not been my intention and I beg that you will overlook sai A very grave danger threatens my large interests in this country. If the out- break takes place the si. ites can not make their i rops. If th<- < rops an made there will be many ruined Ameri lin made operative with a i laim against this Government a-^ its work tital. ice the outbreak tak I men-of-war will do us no good; we will have been ruined in the land of Man. ma by foreign d< \\ i L. H i To the Honorable Wm. I I 'in.' i:\iiimi B. I IITBD STA1 Mr. Si ' . omrounli ation of the arrat ' ! the f the Dominican Republii , for the pur- of submitting l nlv« to the payment, by t he J ■> latter country, of a sum in settlement of the claim oi the Shu Domingo Improve- ment Company, of New York, has had to considei the consequences which might result from the said arrangement in relation to the preexistent rights of French holders ol Dominican securities. They, together with the Belgian holders, have in fact concluded with the Dominican Republic a convention, undei date of June 3, [901, by virtue of which customs dues collected at the ports oi Santo Domingo and Macoris are expressly set apart in guaranty oi the payment of the Dominican foreign debt. The Dominican Government has thus alienated in favoi of the French bond- holders that part of its revenues, and hence the said part can not be diverted from its original destination in favor oi other creditors. In order to dispel any misappre- hension on this point and to prevent all difficulties, I have received instructions to remind the Federal Government of the existence oi .1 convention, signed two years whi( h sanctions the rights held by the French holders of Dominican securities on the customs receipts of the ports of Santo Domingo and Ma< oris. I have to add, for all practical purposes, that, apart from the amount due to the French holders of the Dominican securities, there are other indemnity claims, notably those presented by the Compagnie Francaise des Cables Telegraphiques, for losses it sustained on account of revolutionary events, especially those of 1 3gg 1902, which are such, both for their origin and old standing, as to call for an early settlement. The interested parties have taken steps to that end with the Govern- ment of the Dominican Republic. Be pleased to accept, etc., Ji SSERAND. EXHIBIT C. Na riONAL Association ok the French Holders of Foreign Securities, 5 rue Gaillon. Defense Commii i i of the Holders of Dominu \% B01 □ Paris, February 12, igoj. The coupon maturing in April, 1902, of the stamped exterior Dominican debt is about being paid by the Credit Lyonnais, at the rate of 3.85 francs per bond of ,£20, according to the announcement hereinafter made. We think it will be useful to give the bondholders some explanations as to the delay in this payment and as to the facts that have occurred since the approval by the Dominican Congress of the arrangement concluded at Paris and at Antwerp, in the month of June, 1901, between the delegate of the Dominican Government and the representatives of the bondholders. When that arrangement became executory, the National Association undertook the appointment of the French agent at Santo Domingo. The importance of the choice to be made was all the greater because there was a financial " controle" to be organized upon quite new bases. At our request the Minister of Foreign Affairs was willing to authorize an official of his Department. M. Maurice Charpenticr, to accept the post of delegate for the French holders, and M. Charpentier, having successively exercised the functions of chancellor and vice-( onsul at Santo Domingo, he was well qualified to inspire con- fidence. He went to his post in Santo Domingo in the month of April last. OJ At that time no remittance had yet been made by the Dominican Government to the general Belgian agent, who had been acting since the month of November. The revolution which overthrew President Jiminez in the month of May. carry- ing into power General Vasquez, was either a reason or a pretext for the Govern- ment of Santo Domingo to delay the execution of its engagements, and it was only at the beginning of July, 1902, that the first receipts from the agents of the bond- holders were deposited in the banks of Europe. The remittances of the Government were made after that with extreme slow- ness, either because of the political events of which the Dominican Republic has been the theater and which had an immediate effect upon the financial situation, or because of the incessant difficulties which have surrounded the agents in the execu- tion of their task. We ought particularly to refer to one important incident the arrangement of which is still in suspense. On the 21st of last June the Minister of Finances promulgated a decree by the terms of which he granted to the interior debt an "apartado," or privileged guar- anty of 5 per cent, to be collected upon the amount of the customs at the capital. This measure constituted a formal violation of the arrangement of 1901, which granted to the holders of the exterior debt the whole of the customs produced by the port of Santo Domingo City, with the sole reservation of the "apartados" created before the arrangement was made (art. 2). The National Association, by agreement with the Antwerp committee, immediately addressed a joint protest to the Dominican Government against this violation of your rights. The Dominican Government then proposed to us that it should be submitted to arbitration, which we refused, believing that such a flagrant infringement of the clauses of our contract could not give rise to any question of interpretation upon which an arbitration could be i- The minister had to yield to the evidence and promised to withdraw his decree. In case it shall not be done promptly, in accordance with that promise — of which we still await the fulfillment — the National Association will not fail to renew its claim by asking for diplomatic intervention. The aggregate of the remittances received by the agents ol the bondholders from the 1st >.i October, 1901, to November 30, 1 902, amounted to $125,056, while r the terms of the arrangement the remittances should have reached a mini- mum oi f 000 francs) during that period ol fourteen month'-. On the "ih of No last there was in the banks in Europe, to the credit of ant for the coupon ol April, [902, a sum ol - having produced ram I therefore la< king at thai time more than 150, francs before the payment could be n, and new delays w< reseen, The Domini- can Government having then proposed to the committees to turn ovei to the credit of the coupon of April, 1902, the sums deposited in Europe foi the purchase (redemp- k < oupons, say, about 1 to, 000 francs, the comn thought, in view of th< lay in the payment ol the remittances, thai il was to tl nd holders to accept thai proposition in order to hasten l the coupon; but it was formally stipulated that th>- funds foi the taking up ol the bai i> 1 oupons should I"- again made up oul ,,f tl.. lai • ami oupon payment. We ha ' thai the minimum amount ol thi 01nu.il remittances being to the terms oi the arrangement • ih<- igency expenses ;i , Santo Don lefault for a I we 1 an take an .» basis foi the distribution .1 mhii correspi nding to * . ai the rati ol frani D 34 A- soon as the deposits in the European banks charged with the service "f the debt reached this figure, the committees arranged with the financial agent of the Dominican Government in Europe and with these banks to proceed with the pay- ment <>f the coupon, the amount of which, after deducting the expenses of the opera- tion, have been fixed thus al 3.85 francs, The latest news which we have received does not permit us to count upon the regularity of the payments by the Dominican Government; the agents will there- fore have to redouble their efforts to secure the execution of the arrangement of 1901. The bondholders may be assured that tin- National Association will defend their rights and will sustain their representatives in the accomplishment of their task with every means at its disposal. A • ept the assurance of our distinguished consideration. (For the Association) TONY CHAUVIN, Director. Financiai Agency of the Dominican Republic in Europe. {Service of the Exterior Unified Debt — Stamped /go/.) The coupon No. 16, of the bonds of the old Dominican loan, 2^(4 per cent deferred), and the coupon No. 17, of the old Dominican loan, French-American reclamation consuls, will be payable from the gth of February, 1903, at the rate of 3.85 francs for the bonds of ^20 and 10.25 francs for the bonds of ^100. * * * At the Credit Lyonnais, Boulevard des Italiens, Paris. At the Credit Lyonnais, 40 Lombard Street, London, E. C. At the Kanque d'Anvers, Antwerp. At the Banque de Paris, et de Pays Bas, Brussels and Amsterdam. Lixas T. Gibb fiscal Agent of the Dominican Government in Europe. f APR 5 1948 %