The Improvement Company and its allied companies held, besides bonds, certain banking and railway interests in the island. The Dominican Government, desirous to own and possess these properties, agreed with the companies that the value of their bonds and properties was $4,500,000, and they submitted to arbitration the question as to the instalments in which this sum should be paid and the security that should be given. The Hon. George Gray, judge of the United States Circuit Court of Appeals, and the Hon. Manuel de J. Galvan, both named by the Dominican Republic, and the Hon. John G. Carlisle, named by the United States, were the arbitrators, and rendered their award on July 14, 1904. By its terms the Dominican Government was to pay the above-mentioned sum of $4,500,000, with 4 per cent interest per annum, in monthly instalments of $37,500 each during two years and of $41,666.66 each month thereafter, beginning with the month of September, 1904, said award to be secured by the customs revenues and port dues of all the ports on the northern coast of Santo Domingo. The award further provides for the appointment of a financial agent of the United States, who was authorized, in case of failure during any month to receive the sum then due, to enter into possession of the custom-house at Puerto Plata in the first instance and assume charge of the collection of customs duties and port dues, and to fix and determine these duties and dues and secure their payment; in case the sums collected at Puerto Plata should at any time be insufficient for the payment of the amounts due under the award, or in case of any other manifest necessity, or in case the Dominican Government should so request, the financial agent of the United States was authorized to have and exercise at any and all of the other ports above described all the rights and powers vested in him by the award in respect of Puerto Plata. Under the award the financial agent could only apply the revenues collected toward its payment after he had first paid the expenses of collection and certain other obligations styled “aparods,” which constituted prior charges on the revenues assigned. These prior charges are specified in the award. The Dominican Government defaulted in their payments; and in virtue of the award and the authority conferred by the Dominican Government, and at its request, possession was delivered of the custom-house of Puerto Plata to the fiscal agent appointed by the United States to collect the revenues assigned by the arbitrators for the payment of the award; and in virtue of the same authority possession of the custom-house of Monte Cristi has also been handed over. I submit herewith a report of Mr. John B. Moore, agent of the United States in this case, and a copy of the award of the arbitrators.