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:
Public-domain text, read in full here on John Shaqi.
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