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839.6463/51 : Telegram The Minister in the Dominican Republic (Russell) to the Secretary

of State

SANTO DOMINGO, May 9, 1922—5 p.m.

[Received May 11–9:48 a.m.] 21. Referring to your cablegram 7 bis [8] May 2, 5 p.m.68 Military Government was informed yesterday that the City Council of Santiago was willing to make definite offer for purchase plant of $400,000 bonds at 6 percent, company to purchase $50,000 additional bonds at market value and to operate plant for one month to insure that everything was in good condition, said operation to be borne by City Council. Military Government informed City Council that it was doubtful if Company would accept such a proposition and Secretary of Council and one member thereof stated that they would endeavor to persuade City Council to offer 742 percent interest. Here the matter rests waiting for definite offer from Council. City Council does not admit validity of agreement between its representative and utility company. Military Government is willing to segregate funds and place them at the disposition of fiscal agent utility company upon the completion of contract.

RUSSELL

839.6463/51

The Secretary of State to the Minister in the Dominican Republic

(Russell)

No. 458

WASHINGTON, June 1, 1922. SIR: Upon the receipt of your telegram of May 9, 5 p.m., the contents of the telegram were communicated informally to the representative of the San Domingo Water, Light & Power Co. After considering the information conveyed by you, the Company has addressed to the Department a letter embodying a plan of settlement which the Company is willing to accept. A signed copy of the Company's letter, in the form of a definitive offer, is transmitted herewith.63

The Department desires that you should communicate this offer to the Military Government of Santo Domingo, recommending it to the Military Governor's consideration, but stating that the Department does not at this time commit itself upon the question whether it will be proper for the Military Government to guarantee the bonds

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of the proposed municipal issue. In connection with this point, you are instructed to transmit by cable your comments, with those of the Military Governor, upon the Company's contention, as expressed by officers of the Company to officials of this Department, that the provisions of the Company's concession and of the Law of Waters, under which the concession was granted, offer justification for the guaranteeing by the Military Government of bonds issued for the purpose of purchasing the Company's property. It is believed that the formal agreement of the United States Government will be necessary under Article III of the Treaty of 1907,65 before the Military Government will be authorized to guarantee the proposed municipal bonds. If the Military Government and the Municipalities of Santiago and Puerto Plata approve of the settlement proposed by the Company, the Department will be glad to consider the advisability of giving its agreement to the guarantee of the proposed bond issue by the Military Government. I am [etc.]

For the Secretary of State:

WILLIAM PHILLIPS

839.6463/55 : Telegram The Minister in the Dominican Republic (Russell) to the Secretary of

State

SANTO DOMINGO, June 16, 1922–5 p.m.

[Received June 1949 a.m.] 27. Your despatch number 458, undated, 6 in reference to Santo Domingo Water, Light and Power Company. I brought to attention of the Military Governor the new form of settlement proposed by the company and he requested me to say that he still thinks it most inadvisable for the national government to guarantee bond issues of municipalities, especially at this time of serious financial crisis. In regard to justification in the Law of Waters for the guarantee by the Military Government of bonds issued for the purchase of the plant, there is a clause in this law which gives the Government and municipalities the right to purchase for the amount expended in carrying out the work plus a reasonable rate of interest, that is, if the Government wishes to purchase it has the privilege of doing so in accordance with the provisions of this law but there is nothing in regard to the form of payment. A translation of the clause in question is as follows:

* For text of treaty, see Foreign Relations, 1907, pt. 1, p. 307. Dated June 1, supra.

“ The works constructed in conformity with the provisions of this law shall be considered as public utilities and can be acquired at any time by the nation or by the municipalities concerned by paying the value of said works, either by arrangement and stipulation before completion or by subsequent valuation always taking as a basis the amount these works would cost together with a reasonable rate of interest to be agreed upon."

The Military Governor will be in Washington next week and can be consulted.

RUSSELL

839.6463/59 The Secretary of State to the Minister in the Dominican Republic

(Russell)

No. 469

WASHINGTON, August 18, 1922. Sir: Under date of July 20, 1922, the Navy Department transmitted to this Department a proposal from the Ayuntamiento of Santiago, Dominican Republic, for the purchase of the plant of the Santo Domingo Water, Light, and Power Company. This proposal was transmitted to Mr. Hunt, Counsel for the Company, and a reply has now been received from Mr. Hunt containing the conditional acceptance of the proposed contract.

Mr. Hunt has informed the Department that his clients were unable, because of the nature of their relations with the mortgage creditors of the Company, to assume an indefinite obligation to put the plant at Santiago in the same condition as on the date when it was closed down. The Company is, however, willing, as you will note from the conditional acceptance of the contract, to reduce the price of the property from $400,000 to $380,000 and to advance to the Ayuntamiento $15,000 additional in cash, in order that the Ayuntamiento may itself put the properties in good operative condition. Mr. Hunt states that this sum seems amply sufficient for that purpose, in view of reports rendered to the Company by technical experts.

You are requested to urge the acceptance of the Company's proposal upon the Military Governor, expressing the interest of the Department in the settlement of this matter upon what appears to be an equitable basis. You will call the Military Governor's attention to the fact that the proposal of the Ayuntamiento was not received by the Department of State until July 21, 1922, although it was approved by the Military Governor on June 29, 1922. I am [etc.]

For the Secretary of State:

LELAND HARRISON

* Proposed contract not printed.

839.6463/73: Telegram

The Minister in the Dominican Republic (Russell) to the Secretary of

State

SANTO DOMINGO, November 14, 1922noon.

[Received November 15—6:30 a.m.] 42. Yesterday I had an interview with the Minister of Interior who has just returned from Santiago and he informs me that the question of the Santo Domingo Water, Light and Power Company will be settled satisfactorily in two or three months. The municipality of Santiago has contracted with the General Electric Company for an engineer to make a report on the line and plant and as soon as an estimate is made of the amount necessary for putting plant in good condition materials will be ordered and negotiations with the company closed.

RUSSELL

839.6463/76: Telegram

The Secretary of State to the Minister in the Dominican Republic

(Russell)

WASHINGTON, December 23, 1922noon. 31. Santo Domingo Light and Power Company informs Department its representative Dominican Republic states that because of non-payment of taxes municipality Santiago is proceeding to embargo company's properties and that Dominican Government served notice December 1 that unless taxes for past two years paid before December 15 Government would proceed against properties.

Company alleges its charter exempts it from all taxation and that recent decision Court [of] last resort that company is subject to real property tax constitutes denial of justice.

Company is sending for copy decision and other documents to present case to Department.

Immediately advise appropriate authorities and present urgent request that pending expiration reasonable period to enable Department to investigate case no action be taken against company's properties. In this connection refer to assurances given you by Minister Interior and reported your number 42, November 14, noon, that negotiations with company for purchase of properties would soon be closed. Telegraph report.

HUGHES

839.6463/79: Telegram

The Minister in the Dominican Republic (Russell) to the Secretary of

State

SANTO DOMINGO, December 26, 1922noon.

[Received December 27—5 a.m.] 49. Minister of the Interior informs me that the municipality Santiago has given option of 120 days concession of Santo Domingo Light and Power Company to Santo Domingo Brewing Company represented by Kalb, Austrian, and Contreras, Mexican.

RUSSELL

CLAIMS BY BRITISH SUBJECTS FOR INJURIES SUFFERED AT THE

HANDS OF DOMINICAN BANDITS

439.41 St 3/9

The British Ambassador (Geddes) to the Secretary of State

No. 939

WASHINGTON, December 21, 1921noon. Sir: I have the honour, on instructions from my Government, to draw your attention to the damages sustained by two British subjects, Messrs. Steel and McPhail, at the hands of Dominican bandits, and I transmit herewith copies of their signed statements concerning the incident, together with a copy of a certificate respecting the injuries suffered by Mr. McPhail.88

It appears that on September 27th, 1921, a party of armed men visited Mr. Steel's house and abducted him after severely handling Mr. McPhail who had come to his assistance. The reason given for the abduction was that Mr. Steel had failed to comply with the written request of “General Ramon Nateras” to give him $5,000 by September 26th.

You will observe that Mr. Steel was obliged to make certain promises in consequence of which it is quite impossible for him to remain in the Republic without endangering his life. This enforced exile is a very severe hardship to Mr. Steel who has spent most of his life in Santo Domingo and other countries in South America, and more particularly as he had expected to remain in his position as Administrator of the Angelina Estate for another eight or ten years.

I should be grateful if you would bring the cases of Messrs. Steel and McPhail to the attention of the competent authorities of the United States Government, and if you would be good enough to inform me whether there is any court or other governmental machinery

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