“At present negotiations are pending, of which Your
Excellency’s Government has knowledge, whereby the Dominican
Republic is seeking a method of attaining a re-adjustment of
its external debt upon a permanent basis by means of the
prorogation of the moratorium provided in the Emergency Law.
Efforts are being made to hasten these negotiations and they
will be concluded long before the termination of the present
Emergency Law. The surplus which has been accumulated is
intact and is held as a trust fund. This fund will be
applied in accordance with the provisions of the Emergency
Law unless it be agreed, after authorization by Your
Excellency’s Government, to make some other disposition of
this fund if this should benefit the holders of bonds of the
Dominican Republic. But, in view of the fact that the
holders of bonds are not complaining, nor requesting that
the accumulated fund be destined to the liquidation of these
bonds, and in view also of the fact that if these bonds are
bought in the open market at present this would involve a
loss of 40 to 50% of their original cost, and particularly
in view of the
[Page 648]
probability that we shall agree within a short time upon a
plan which will establish that this debt be placed upon a
permanent and secure basis in the interest of the holders of
the bonds and in the interest of protecting the credit of
the Dominican Republic, my Government is of opinion that it
is not advisable to apply or destine the accumulated surplus
to the retirement of these bonds at this time, and deems it
more convenient to retain it intact and as a trust fund, in
order to dispose thereof in accordance with the terms of the
general agreement which might be reached.
In spite of this conviction, and as an indication of the
desire of the Honorable President Trujillo to cooperate in
all ways with Your Excellency’s Government, the Chief of the
Dominican State has given orders that one hundred thousand
dollars ($100,000 American currency) be now dedicated to the
liquidation of Dominican bonds, in accordance with the
provisions of the Emergency Law, and that the remainder
continue intact as a trust fund pending the termination of
the negotiations which are now being carried out for a
permanent re-adjustment of the foreign debt.
The Honorable President Trujillo is deeply impressed with the
solicitude of Your Excellency’s Government for the
protection and security of the holders of Dominican bonds
who may be American citizens, and Your Excellency may assure
your Government that the concern of our Chief of State is
equally great, or greater, since the credit and honor of his
Government are engaged in the security and final payment of
this debt.”
I ask you, Mr. Minister, to accept [etc.]
