If the United States Government declines to take action and other foreign Governments resort to action to secure payment of their claims, the latter would be entitled, according to the decision of The Hague tribunal in the Venezuelan cases, to the preferential payment of their claims; and this would absorb all the Dominican revenues and would be a virtual sacrifice of American claims and interests in the island. If moreover, any such action should be taken by them, the only method to enable them to secure the payment of their claims would be to take possession of the custom-houses, and considering the state of the Dominican finances this would mean a definite and very possibly permanent occupation of Dominican territory, for no period could be set to the time which would be necessarily required for the payment of their obligations and unliquidated claims. The United States Government could not interfere to prevent such seizure and occupation of Dominican territory without either itself proposing some feasible alternative in the way of action, or else virtually saying to European Governments that they would not be allowed to collect their claims. This would be an unfortunate attitude for the Government of the United States to be forced to maintain at present. It can not with propriety say that it will protect its own citizens and interests, on the one hand, and yet on the other hand refuse to allow other Governments to protect their citizens and interests. The actual situation in the Dominican Republic can not, perhaps, be more forcibly stated than by giving a brief account of the case of the Santo Domingo Improvement Company. From 1869 to 1897 the Dominican Government issued successive series of bonds, the majority of which were in the hands of European holders. Successive issues bore interest at rates ranging from 2¾ to 6 per cent, and what with commissions and other deductions and the heavy discount in the market the Government probably did not receive over 50 to 75 per cent of their nominal value. Other portions of the debt were created by loans, for which the Government received only one-half of the amount it was nominally to repay, and these obligations bore interest at the rate of 1 to 2 per cent a month on their face, some of them compounded monthly. The improvidence of the Government in its financial management was due to its weakness, to its impaired credit, and to its pecuniary needs occasioned by frequent insurrections and revolutionary changes, and by its inability to collect its revenues.