[Enclosure]
Draft of Note To Be Addressed to the Dominican
Minister for Foreign Affairs (Bonetti
Burgos)
Excellency: I have the honor to inform Your
Excellency that your note No. 131 of February 21, 1936, containing
the views of Your Excellency’s Government regarding the
interpretation to be given Article III of the American-Dominican
Convention of December 27, 1924, concerning the pledging of future
revenues by the Government of the Dominican Republic has been duly
transmitted to my Government and I am now instructed to reply as
follows:
The Government of the United States as a matter of principle cannot
admit the contention of the Dominican Government that the
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payments stipulated in the
contracts entered into by the Dominican Government for the
construction of certain bridges, which formed the subject of
representations made by this Legation as far back as June 20, 1928,
do not involve violation of Article 3 of the Convention of December
27, 1924. It is the well-considered opinion of the Government of the
United States that arrangements of the nature involved in these
contracts, and likewise the contract for the port development work
in the harbor of Santo Domingo, involving as they do a financial
liability undertaken by the Dominican Government and to be
liquidated at some future date, constitute in fact an increase in
the “public debt”, and that, accordingly, they come within the
purview of Article III of the Convention of December 27, 1924. Any
opinion to the contrary would seem clearly to open the way for the
Dominican Government, if it so desired, to avail itself of a method
for the financing of projects and undertakings of whatever nature
which would be limited only by the willingness of other parties to
accept written obligations of the Dominican Government.
The Department of State has gone into this question very carefully
and thoroughly. As indicated in the representations made on this
subject since June 1928, the Government of the United States desires
to give a liberal interpretation to the provisions of the
Convention, in order that it need concern itself as little as
possible with the fiscal affairs of the Dominican Republic, but it
is regretted that it is impossible to interpret Article III of the
Convention in such a way as to give a blanket authorization to the
Dominican Government to enter into contracts pledging revenues for a
period of years in advance. The surplus revenues of any given year
are, of course, at the entire disposition of the Dominican
Government and it may do with such surplus revenues as it wishes
without consulting the Government of the United States, but the
pledging in advance of surplus revenues for future years can be
looked upon only as an increase in the public debt requiring the
consent of the Government of the United States under the terms of
Article III of the Convention.
Accept, Excellency, etc.
