WHEREAS, an increase in the public debt of the Dominican Republic, by the issuance of bonds to the face value of $6,700,000.00, has been duly assented to by the Government of the United States as required by the terms of the American-Dominican Convention dated February 8, 1907, and assurance has been given that the United States will consent to the issuance by the Dominican Government of a total bond issue of $10,000,000.00, of which the $6,700,000.00 are to be issued at once and of which the remainder will be issued only after previous agreement between the two governments.

Now, THEREFORE, by virtue of the powers vested in the Military Government of Santo Domingo, the following Executive Order is hereby promulgated:

ARTICLE 1. The Secretaria de Estado de Hacienda y Comercio is hereby authorized, empowered and directed to issue bonds of the Dominican Republic in the form as herein provided for the amount of $6,700,000.00 and arrange for the sale thereof on terms satisfactory to him.

ARTICLE 2. This bond issue shall be known as the Dominican Republic Twenty-Year Five and One-half Percent Customs Administration Sinking Fund Gold Bond Issue.

ARTICLE 3. The bonds shall bear the signature of the Officer administering the affairs of the Secretaria de Estado de Hacienda y Comercio, and the seal of the said Secretaria, shall be countersigned by the Fiscal Agent of the loan, and shall bear a certificate executed by a Trust Company in the United States, authenticating each bond as a bond of this issue. The bonds shall be printed in the English language. The coupons to be attached to said bonds shall be in the English language and shall bear the engraved facsimile signature of the officer administering the affairs of the Secretaria de Estado de Hacienda y Comercio. The bonds shall be dated March 1st, 1922, and all bonds not retired by the sinking fund shall be payable in twenty years from that date with a premium of 1% on the principal amount of each bond. They may be called for redemption in whole or in part on the first day of March in any year or years after 1930 at 101% of the par value of the bonds so called, and beginning with March 1st, 1930, there shall be paid as hereinafter provided the sum of at least $563,916.67 each year into a sinking fund for the purchase or call of these bonds at not more than the above price. They shall bear interest at the rate of 52% per annum payable semiannually on the first day of each September and March. They shall be paid principal, premium and interest in gold coin of the United States of the present standard of weight and fineness at the Office or offices of the Fiscal Agent of this loan as may be arranged with the bank or bankers purchasing this loan. The bonds shall be coupon in form and regis

terable as to principal. They shall be in denominations of $500 and $1000 each, in such proportions as the bank or bankers purchasing this loan may determine.

ARTICLE 4. Said bonds are hereby declared to be exempt from any taxes or impositions now or hereafter established or levied by or within the Dominican Republic against the bonds or the income arising therefrom or the holders thereof, and shall be payable as well in times of war as in times of peace and irrespective of the nationality of the holders thereof.

ARTICLE 5. With the consent of the Government of the United States of America, the payment of the principal of these bonds as well as the premium and interest is secured by and shall constitute a charge upon all the customs revenues of the Republic collected and to be collected, after their application to the first three objects designated in Article 1 of the Convention concluded February 8, 1907, between the United States of America and the Dominican Republic and after payments provided for by Executive orders of the Military Government of Santo Domingo on prior outstanding bond issues of the Republic have been made, but before any payment is made to the Treasury of the Republic. In the event that in any year the customs receipts of the Republic shall be insufficient to meet the payments herein provided to be made, the Republic will provide such sums as may be necessary to complete such payments.

ARTICLE 6. The Republic shall pay to the Fiscal Agent of the Loan, from March 1 to December 31, 1930, in ten equal monthly installments, sufficient funds to retire at least one-twelfth of this entire bond issue, principal and premium, on or before March 1, 1931. This retirement of bonds shall be accomplished either by purchase of bonds in the open market at not over 101 percent of the face value plus accrued interest, or by call of bonds for redemption at 101 percent of face value of bonds so called plus accrued interest by public drawings by lot during the week containing January 15, 1931, said latter bonds thus called to be paid (principal, premium, and interest) on March 1, 1931. The Republic shall likewise retire on or before March 1st of each succeeding year at least one-twelfth of this entire bond issue, principal and premium, until all bonds of this issue shall have been redeemed and paid, sufficient funds for this purpose to be deposited with the Fiscal Agent of the loan in equal monthly installments on or by the twentieth day of each month beginning the twentieth day of January, 1931. The Republic shall also pay to the Fiscal Agent of the loan 2/12ths of the annual interest charge on this issue on or before April 20th, 1922, and thereafter 1/12th of the annual interest charge on all outstanding bonds of this issue shall be deposited with the Fiscal Agent on or before the 20th day of each

month until all the bonds and the interest thereon are paid in full. A formal Contract of Sale and Fiscal Agency Agreement shall be entered into by the Officer administering the affairs of the Secretaria de Estado de Hacienda y Comercio, in accordance with which payments of principal, premium, and interest, purchases and retirements of bonds, and other similar acts shall be accomplished. Bonds redeemed shall be cancelled and shall not be reissued.

ARTICLE 7. The Republic may, in its discretion, at any time and from time to time make payments into the sinking fund in addition to those required to be made as aforesaid, and all such additional sums so received by the Fiscal Agent of the Loan may be applied as hereinbefore stated for the purchase of bonds at any time in the open market or for additional requirements of bonds by drawings for redemption on March 1, 1931, or on March 1st of any subsequent years. ARTICLE 8. The acceptance and validation of this bond issue by any Government of the Dominican Republic as a legal, binding and irrevocable obligation of the Dominican Republic is hereby guaranteed by the Military Government of Santo Domingo, and, with the consent of the United States Government, the General Receiver of Dominican Customs, appointed under the Convention of 1907, will, during the life of that Convention, make such payments as are necessary for the service of the new loan from the revenues accruing to the Dominican Government. The Military Government further agrees that after the expiration of the Convention of 1907, such customs revenues shall be collected and applied by an official appointed by the President of the United States in the same manner as the present General Receiver of Customs, and that the loan now authorized shall have a first lien upon such customs revenues, subject to necessary expenses of collection, until all the bonds thereof are paid in full. The loan herein referred to is the loan of $10,000,000.00 mentioned in the second preliminary paragraph of this executive order and of which this issue of $6,700,000.00 is a part.

ARTICLE 9. In accordance with the above mentioned Convention of February 8, 1907, until the Republic shall have paid the whole amount of the bond issue of 1908 and the total amounts outstanding on bond issues to the service of which extensions of the duties of the General Receiver of Dominican Customs have been made, the public debt of the Republic shall not be increased except by previous agreement between the Republic and the United States, and a like agreement shall be necessary to modify the import duties of the Republic.

ARTICLE 10. The Military Government of Santo Domingo engages that during the term of this loan, no future bonds of the Republic will be issued, secured by customs revenues, other than the total au

thorized amount of bonds of this issue, unless the annual average customs revenues for the five years immediately preceding amount to at least 12 times total charges on all obligations secured by customs revenues, including charges of any new loan, and that the present customs tariff will not be changed during the life of this loan without previous agreement between the Dominican Government and the Government of the United States. For the purpose of determining the total charges on all obligations secured by customs revenues, the maximum annual sinking fund charges for any future year shall be used in the computation.

ARTICLE 11. For the payment of the interest on these bonds as it falls due and of the principal and of the premium as herein provided, the good faith of the Republic is hereby irrevocably pledged irrespective of any security, and these bonds and the obligations created thereby shall not be impaired by any law or decree which the Government of the Republic, or any authority thereof, may hereafter enact or issue, or by any interpretation of any law or decree heretofore or hereafter enacted or issued, and these bonds shall constitute a legal and binding obligation of the Republic until properly redeemed and paid.

ARTICLE 12. The Fiscal Agent of the Loan shall render accounts to the Auditor of the Republic covering the periods ending June 30, and December 31, of each year of all receipts, accruals, of interest, purchases of bonds, and payments and shall surrender with such statements of accounts all coupons and bonds redeemed and paid. Upon verification of such the Auditor shall make entry thereof, allow credit therefor, and control and destroy the coupons and bonds received, making appropriate record thereof.

ARTICLE 13. The foregoing provisions in regard to the payments for the interest and amortization of the loan shall be deemed to be in the nature of a continuous appropriation and no further appropriation for such purpose shall be required. The Auditor of the Republic is authorized and directed to allow due credit in accounts therefor.

ARTICLE 14. Such funds as may be necessary to defray the expense of printing the bonds, advertising notices relating thereto, and other expense incidental to the issuance, marketing, registration, redemption, and cancellation thereof are hereby appropriated out of any funds in the National Treasury not otherwise appropriated. ARTICLE 15. All laws or parts of laws in conflict herewith are hereby repealed.

S. S. ROBISON

Rear-Admiral, United States Navy
Military Governor of Santo Domingo

SANTO DOMINGO CITY, March 28, 1922.

839.51/2309

The Secretary of State to the Secretary of the Navy (Denby)

WASHINGTON, April 1, 1922. SIR: I have the honor to acknowledge the receipt of your letter of April 1, 1922, outlining the procedure which you desire to have followed in the matter of the issue of $6,700,000 in bonds by the Dominican Republic.

In reply, I am glad to inform you that I have no objection to the procedure as outlined.

I have [etc.]

CHARLES E. HUGHES

EFFORTS BY THE SANTO DOMINGO WATER, LIGHT AND POWER COMPANY TO SELL ITS PROPERTIES TO DOMINICAN MUNICIPALITIES

839.6463/31: Telegram

The Secretary of State to the Minister in the Dominican Republic

(Russell)

WASHINGTON, September 29, 1921—6 p.m. 20. Santo Domingo Water, Light and Power Company states that by reason of excessive fines imposed, refusal to put into effect just rates for services [as?] provided by Dominican Government, and finally by failure to perform agreement to purchase Company's plants, municipalities of Santiago and Puerto Plata have placed Company in financial condition from which it cannot extricate itself. Liberty Trust Company, mortgagee of plants, states it has been placed by said failure to perform agreement in additional serious position since it was induced upon making agreement to annul proceedings for foreclosure and thereafter could not revive proceedings and bring about sale of property prior to expiration of six months period after discontinuance of service, when municipalities under contracts with Company are entitled to bring about forfeiture of contracts.

Department understands that water supply these municipalities came from plants mentioned, and apparently failure of supply must have detrimental effect on health of inhabitants.

In view of foregoing, and since apparently municipalities have been actuated by anti-American feeling produced by occupation, Department considers Military Government should take active measures to persuade municipalities perform agreement. Health question alone seemingly would warrant such action.

Advise Dominican Government and point out necessity for prompt action in view of existing situation, including rapid deterioration of idle plants.

HUGHES