loan of $25,000,000. In reply, I desire to state that this Government understands that the exchange of ratifications must of necessity take place prior to the proposed refunding of the Republic's outstanding debt in view of the fact that the Convention cannot enter into effect until after ratifications have been exchanged and since the provisions of the Convention operating as guarantees for the proposed loan of $25,000,000 must become effective prior to the issuance of the bonds of the proposed loan.

You state (b) that Article III of the Convention of 1924, which follows the text of Par. 1 of the same article of the Convention of 1907, is as follows:

"Until the Dominican Republic has paid the whole amount of the bonds of the debt, its public debt shall not be increased except by previous agreement between the Dominican Government and the United States".

You inquire whether "the whole amount of the bonds of the debt" refers in the Convention of 1924 to the proposed bond issue of $25,000,000 and you ask whether in this event the Department of State understands that the "previous agreement" between the two Governments for the negotiation of the loan of $25,000,000 becomes effective as the result of the signing and ratification of the Convention of 1924, or whether, on the contrary, a distinct and special agreement is required before the new bonds are issued. In reply, I desire to state that it is the understanding of this Government that a special agreement will be required on the part of the Governments of the United States and of the Dominican Republic prior to the issuance of the proposed bond issue of $25,000,000, or any portion thereof.

You inquire (c) whether in view of the fact that the Convention of 1924 does not stipulate any special form for the issuance of the bonds of the proposed loan of $25,000,000 it is the understanding of the Department of State, as you state it is yours, that the provisions of the Convention admit the possibility of one series of bonds for the total amount above mentioned as well as of various series totalling $25,000,000, as the best interest of the Dominican Republic may determine. In reply, I may inform you that this Government considers that the terms of the Convention under reference admit the possibility of the issuance of the bonds of the proposed loan up to the total of $25,000,000 either in one series or in several series as the best interest of the Dominican Republic may from time to time determine. Finally, you state (d) that Article VII of the Convention of 1924 provides that upon the exchange of ratifications of this Convention, the Convention as signed on February 8, 1907, shall be deemed to be abrogated, and you inquire what will be the condition of the bonds issued during the life of and in accordance with the provisions of

the Convention of 1907 which may still be outstanding after the exchange of ratifications of the Convention of 1924 prior to their conversion. You state that it appears evident that upon the abrogation of the Convention of 1907 such bonds would be guaranteed by the provisions of the Convention of 1924 and that the payment of interest upon such bonds and the manner of providing for their eventual amortization would be governed by the terms of the legislation passed authorizing the issuance of the series of which they form a part. You further state that the holders of such bonds could not invoke any legal right to insist upon the continuation of the Convention of 1907 in view of the fact that the new Convention, that of 1924, provides the same guarantees as the former Convention. In reply to this last inquiry, I desire to state that I share your understanding that upon the abrogation of the Convention of 1907 all bonds then outstanding will be guaranteed by the provisions of the Convention of 1924 and that the payment of interest upon such bonds and the manner of providing for their eventual amortization will be governed by the terms of the legislation passed authorizing the issuance of the series of which they form a part. In order that our common understanding upon this point may become a matter of record I wish to suggest an exchange of notes confirming this understanding. I shall be glad to have you advise me whether this suggestion meets with your approval.

Accept [etc.]

839.51/2575

3

FRANK B. KELLOGG

Memorandum by the Commissioner in the Dominican Republic (Welles) of a Conversation With the Confidential Agent of President Vasquez (Morales)

Señor Angel Morales, former Minister of the Interior and Police in the Cabinet of President Vasquez, arrived in Washington on March 27, as the Confidential Agent of the President to take up with the Department of State various matters of interest to this Government, principally certain questions affecting the interpretation to be given certain articles in the Convention signed December 27, 1924, at present pending ratification by the Dominican Government.

The chief purpose of Señor Morales' visit was to ascertain whether the Government of the United States would see any objec

3 Mr. Welles had returned to the United States.

tion to the ratification by the Dominican Congress of the new Convention with certain reservations contained in a draft which he handed to me, which project contained, as well, in the law of ratification certain limitations to be placed by the Congress upon the Executive in the negotiation of the loan of $25,000,000 contemplated in the Convention. (See Annex A.) After discussion of this project, I suggested to Mr. Morales the desirability of modifying the proposed limitations to be placed upon the Executive's authority so that the Executive would be permitted as much freedom as possible in his dealings with the bankers. These modifications were at once accepted by the President, who was kept in touch, during the course of our conferences, by cable, with all developments. The reservations contemplated in the law of ratification are identical with those reservations contained in the law ratifying the Convention of 1907. I inquired of Señor Morales whether, should the new Convention be ratified in this manner, the Dominican Government would be satisfied with a reply from the Department of State identical in substance to the reply addressed by Secretary Root to the Dominican Minister in Washington when he was notified by the latter of the ratification of the Convention of 1907 in a similar manner. Señor Morales stated that such a reply would be entirely acceptable to his Government. Duplicate copies of the proposed law of ratification were prepared and these copies were initialed by Señor Morales and myself. One of these copies is attached hereto as Annex B. The proposed law of ratification in the form initialed was approved by the Secretary upon the understanding that the reply of our Government above indicated would be acceptable to the Dominican Government as Señor Morales advised me."

[Enclosure-Annex B]

S[UMNER] W[ELLES]

Draft Resolution for the Dominican National Congress Approving the Convention of December 27, 1924

The National Congress, etc.,

In view of the Convention signed ad referendum in Washington by Representatives of the Government of the United States and of the Dominican Government, which is as follows-(Here follows the Convention in extenso.)

Inasmuch as the Dominican Republic has expressed in the second paragraph of the preamble of the Treaty of Evacuation entered into

B

'Not printed.

See Foreign Relations, 1907, pt. 1, pp. 310–312.

The remainder of the memorandum deals with other matters.

with the United States,' approved by the National Congress on July 14, 1924, and promulgated upon the same date by the Executive Power, its invariable understanding with regard to the rights inherent in its sovereignty; that the Government of the United States has stated in the same treaty that "it has never had and does not have the intention of infringing upon the sovereignty and independence of the Dominican Nation"; and that the National Congress understands that in ratifying the Convention above quoted it modifies in no manner these declarations of both Governments to which reference has been made;

Inasmuch as it is the intention of the Dominican Congress to maintain, as in effect it does maintain, the understanding expressed in paragraphs (a) and (b) of the preamble of the Resolution of the National Congress ratifying, in May 1907, the DominicanAmerican Convention signed on February 8, 1907, which were approved by the Government of the United States and read as follows:

(a) As to Article I: It is understood that the employees mentioned in that article do not in any case include those who are to be appointed by the Dominican Executive Power in customhouses of the Republic in accordance with our existing laws.

(b) As to Article II: The protection of the Receiver General and his assistants by the American Government shall only take place in case the Dominican Government shall find it impossible to extend it.

Inasmuch as in accordance with the sense of the text of the sixth paragraph of the preamble of the Convention last submitted to the Dominican Congress, one of the principal objects of the said new Convention is "to provide for the refunding on terms more advantageous to the Republic of its obligations", etc.,

In the exercise of its Constitutional faculty, has approved the following law:

ARTICLE I.-To approve, as in effect it does approve, within the limits of the understanding above expressed, the Convention signed ad referendum in Washington on December 27, 1924, the text of which has been incorporated in the present law.

ARTICLE II.-The loan which the Executive Power is authorized to negotiate in accordance with the terms of this Convention shall be made upon the following condition :—

(a) That the period fixed for its total amortization shall not exceed that legally fixed for the amortization of the prior loans of which bonds are still outstanding;

(b) That the terms of issuance of the bonds of the new loan shall not be less favorable than the terms upon which the bonds of the prior loans now outstanding were issued;

'Foreign Relations. 1924, vol. 1, 631.

126127-40—vol. II- -9

(c) That all moneys obtained by the Government from the said loan after the refunding operation has been effected shall be devoted exclusively to permanent public improvements and to other projects designed to further the economic and industrial development of the country.

A[NGEL] M[ORALES]

839.51/2657

S[UMNER] W[ELLES]

Memorandum by Mr. Orme Wilson, of the Division of Latin American Affairs, of a Conversation With the Dominican Secretary of Legation (Alvarez)

[WASHINGTON,] August 27, 1925.

Mr. Alvarez called this afternoon to show me the Dominican instrument of ratification of the new Convention signed by the President and the Minister for Foreign Affairs, which had just arrived from Santo Domingo. This document contains the "explanations” of the Convention and certain other provisions incorporated by the Dominican Congress in its Act approving the Convention. I informed Mr. Alvarez that I understood that this document would not be acceptable, as the Department desired that the procedure adopted with respect to the Convention of 1907 should be followed, and that President Vasquez's instrument of ratification should contain only the actual text of the new Convention, as approved by the Congress of the United States.

Mr. Alvarez appeared to understand this and drafted a telegram to his Government to forward another instrument of ratification omitting explanations and additions.

I reminded him that in 1907 an exchange of notes was effected between the Dominican Legation and the Department, in which the former invited the attention of the Department, to the "explanations" contained in the Act of approval of the Dominican Congress and the latter replied by accepting these statements, but stipulating that they could not form a part of the Convention itself. Mr. Alvarez assured me that this note would be presented when the correct instrument of ratification arrived in Washington.

WILSON

839.51/2673

The Dominican Minister (Ariza) to the Secretary of State

[Translation $]

WASHINGTON, October 5, 1925.

MR. SECRETARY OF STATE: I have the honor to forward herewith to you a certified copy of Resolution No. 179 passed by the Domini

File translation revised.