Evening Republican, Volume 17, Number 250, Rensselaer, Jasper County, 20 October 1913 — ADMINISTERING SANTO DOMINGO FINANCES [ARTICLE+ILLUSTRATION]

ADMINISTERING SANTO DOMINGO FINANCES

Y selecting Walter W. Vick of New Jersey as receiver-general of the customs of the Dominican republic President Wilson assigned him the task of continuing a novel experiment in national finance. Bankruptcies and receiverships are common enough in commercial enterprises, but the Dominican experiment is the first case in which

a nation after being plunged into involuntary bankruptcy has accepted a third party, another nation to’ act as receiver of its revenues and stand between it and its creditors during the settlement of its outstanding obligations. soundness of this commercial practice as applied to governments. is shown by the fact that today the Dominican republic has more money to spend for proper purposes than ever before, besides paying the interest on a loan and setting aside each year a sum for the payment of the principal. When the receivership is ter,minated Santo Domingo is likely to enjoy the distinction of being the only Latin American government not saddled with a burdensome foreign debt. The United States government is the custodial of the Dominican revenues, and stands sponsor not only for the conservation of the publio funds but also for the settlement of the republic’s debts. This arrangement has lasting force by virtue of a treaty between the United States and the Dominican republic, in which the conditions of the receivership are set forth. Under this treaty it was that President Wilson appointed Mr. Vick as the representative of the government of the United States to administer the receivership. Mr. Vick is not, technically speaking, in any way connected with the Washington government. His salary is paid by the Dominican government. The same is true of all the expenses of the receivership. These include the salaries of a number of Americans who serve as his assistants. His own salary is $6,500 a year, and he also gets living quarters. Mr. Vick is regarded as exceptionally well qualified for the place. One of the advantages supposed to* lie in the receivership is that the customs revenues are by it removed to neutral hands and are no longer to be preyed upon hy aspiring revolutionists or grafting officials. From 1905, when the first temporary arrangement went into effect, until 1912 Santo revolution and internal strife. The neutralisation of the customs receipts has been regarded as the cause of this peace in the turbulent republic. In 1912 there was continued political disturbance, but dYen during the revolution the custom houses remained unmolested by either faction in the struggle. It will be Mr. Vick’s task to continue this absolute security of the customs receipts and maintain perfect neutrality toward all the contending political factions in the island. European intervention In Santo Domingo seemed a certainly when President Roosevelt intervened In behalf of the republic. The Dominican government was saddled with a foreign and domestic indebtedness amounting, with interest, to about $30,000,000. Far from paying the interest, the Dominican government was increasing the debt by about a milflon dollars a year. As a result of centuries of misrule the revenues were being dishonestly dissipated. A succession of revolutions had reduced the government simply to a source of graft for which many factions were contending. In this situation the European creditors in 1904 demanded a settlement, and were prepared to take over .the revenues of the government if their demands were not granted. As the Dominicans were unable to do what they 1 asked, European intervention seemed certain. The United States then negotiated the modus vivendi, which was to* hold in force while a treaty was being negotiated. The treaty, under which the receivership is now conducted, was ratified by the United States senate and the Dominican congress and went into .effect July 8, 1907. Meantime under the modus vivendi there had been issued bonds of the Dominican government to Jhe amount of $20,000,000. This was for the purpose of making a settlement with the foreign creditors and paying for certain public improvements necessary to the utilization of the island resources. Though the nominal debt , it was scaled down by the United States In making allowance for fraud and dishonest claims to about $17,000,000. * The bonds bear Interest at 5 per cent, making the annual charge for the Bervice of the loan $1,000,000 a year. It is provided in the treaty that each month the American receiver-general shall pay to the Guaranty Trust company of New York, the fiscal agent of the loan, the sum of • SIOO,OOO. This is $200,000 in excess of the annual $1,000,000 required, and the balance is applied to the amortisation of the bonds. In addition it is provided that whenever the collections for any year shall exceed $3,000,000, half of the surplus shall be applied to the amortization of the bonds. Highly satisfactory progress has been made toward . thq repayment of the, .principal of the $20,000,000 loan, inasmuch as the revenues of the republic have nearly doubled under the American receivership. After the expenses of the receivership have been paid and the interest charges and sinking fund taken care of, the Dominican government gets what Is left. Far from being a hardship, the effect of the reoeiver-

ship has been to give the Dominican government more mpney for its own purposes than it ever had before, even in the days when it did not pay a cent onSts indebtedness. The first real roads in the republic, outside of the towns, have been built with funds supplied by the receiver-> ship, and other public Improvements have been made possible. Dominican government is shown by the fact that whereas the customs receipts were only about $2,000,000 a year before the receivership, the receipts for 1912 were $3,642,861. This is the highest figure ever attained, and collections for the first four months of the present calendar year indicate that the total receipts for 1913 will exeeed $4,000,000. ' W. E. Pulliam, Mr. Vick’s predecessors effected many reforms in the administration of the Dominican customs which will assist Mr. Vick materially when he takes charge. It was found that one reason for the small receipts lay in the dishonesty of the collectors. The men whom the American receiver expelled from the service found difficulty in understating why, there should be any objection to their modest peculations. Similarly, it was found that other men in the customs service were grafting by permitting goods to enter without duty upon payment of tribute to them. This, of course, many importers were only too glad to do. One of the remarkable features of the effects of the receivership is that receipts were increased through the reduction of the customs dues. A cut of 50 per cent was made in the export duties and a reduction of 15 per cent in , ( the import duties. The result was to increase both exports and Imports. The former receiver-general found that while such articles as champagne, silks and automobiles, used solely by the ricll, were being admitted practically duty free, the cotton cloths, whlc| are the sole source of clothes for the poorer classes, were being taxed almost 100 per cent. Mr. Pulliam Induced the Dominican government to reverse this arrangement, with salutary effect / both upon the condition of the poorer people and upon the state of the treasury. Though Mr. Vick will be the head of the only non-political government department in all Latin America as custodian of the customs receipts; he will really be a tremendous factor in the political stability of the republic. With the American minister he is the personification of the pledge of the United States that the Dominican government shall conduct itself honorably in its financial obligations to foreigners. The office of the receiver-general and the American legation in Santo .Domingo city are the bulwarks of Dominican stability, peace and good government. As a result of this peculiar relation of the United States to Santo Domingo the Washington authorities have been obliged to take a friendly hand in the settlement of the Dominican political troubles. The rebellion which followed the tyrannical rule of Eladlo Victoria and his dic-tator-like nephew, Elfredo Victoria—the latter a soldier who got into power in the confusion following the assassination of President Caceres — was really settled through the intercession of the United States. A commission, of which Brig. Gen. Prank Mclntyre, chief of the bureau of lnsulir affairs of the war department, was one of the members, brought about the compromise by which President Victoria and his nephew retired from the government and the prelate M

Domingo, Archbishop Nouel, came in as temporary president, to hold office until general elections could be held. This compromise was effected last December, but a few weeks ago Archbishop Nouel relinquished his task and went -to Europe in search 'of lost Without any -turmoil or disorder the Dominican congress elected Jose Bordas, a sen■kator who had joined , in the rebellion of 1912, to succeed him. Only the Influence of the United States kept more trouble from breaking out apon the withdrawal of the archbishop. The city of Santo Domingo, the capital of the republic, is full of historical associations. It is the site of one. of the first settlements made in the western hemisphere by Christopher Columbus. At the entrance to the harhor stands the ancient stone fort and castle erected by his brother, whom Columbus made governor of the colony. Half a mile further up the Ozama river stands a great tree, to the great trunk of which tradition says Columbus tied his ships. J ist around the corner from the offices which Mr, Vick will occupy are the ruins of a great cathedral, the first stone church ever •built In the western world. Near by, on the old plaza of Santo Domingo, ’stands the new cathedral, itself centuries old. In it lies a metal casket said to contain the bones of the great admiral.

The Spaniards thought they took the bones of Christopher Columbus to Havana, but there is evidence that they took those of his brother, the former governor.