839.6463/55: Telegram
The Minister in the Dominican Republic (Russell) to the Secretary of State
[Received June 19—9 a.m.]
27. Your despatch number 458, undated,66 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: [Page 93]
“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.
- Bated June 1, supra.↩