MESSAGE FROM THE PRESIDENT OF THE UNITED STATES

TRANSMITTING A PROTOCOL OF AN AGREEMENT BETWEEN THE UNITED STATES AND THE DOMINICAN REPUBLIC
PROVIDING FOR THE COLLECTION AND DISBURSEMENT BY THE UNITED STATES OF THE CUSTOMS REVENUES OF THE DOMINICAN REPUBLIC

SIGNED ON FEBRUARY 4, 1905 

To the Senate: 

I submit herewith a protocol concluded between 
the Dominican Republic and the United States. 

The conditions in the Republic of Santo Domingo 
have been growing steadily worse for many years. 
There have been many disturbances and revolu 
tions, and debts have been contracted beyond the 
power of the Republic to pay. Some of these debts 
were properly contracted and are held by those who 
have a legitimate right to their money. Others are 
without question improper or exorbitant, constitut 
ing claims which should never be paid in full and 
perhaps only to the extent of a very small portion 
of their nominal value. 

Certain foreign countries have long felt themselves 
aggrieved because of the non-payment of debts 
due their citizens. The only way by which foreign 
creditors could ever obtain from the Republic itself 
any guaranty of payment would be either by the 
acquisition of territory outright or temporarily, or 
else by taking possession of the custom-houses, 
which would of course in itself, in effect, be taking 
possession of a certain amount of territory. 

It has for some time been obvious that those who 
profit by the Monroe Doctrine must accept certain 
responsibilities along with the rights which it con 
fers; and that the same statement applies to those 
who uphold the doctrine. It can not be too often 
and too emphatically asserted that the United States 
has not the slightest desire for territorial aggran 
dizement at the expense of any of its southern neigh 
bors, and will not treat the Monroe Doctrine as an 
excuse for such aggrandizement on its part. We 
do not propose to take any part of Santo Domingo, 
or exercise any other control over the island save 
what is necessary to its financial rehabilitation in 
connection with the collection of revenue, part of 
which will be turned over to the Government to 
meet the necessary expense of running it, and part 
of which will be distributed pro rata among the 
creditors of the Republic upon a basis of absolute 
equity. The justification for the United States 
taking this burden and incurring this responsibility 
is to be found in the fact that it is incompatible with 
international equity for the United States to refuse 
to allow other powers to take the only means at 
their disposal of satisfying the claims of their 
creditors and yet to refuse, itself, to take any such steps. 

An aggrieved nation can without interfering with 
the Monroe Doctrine take what action it sees fit 
in the adjustment of its disputes with American 
States, provided that action does not take the shape 
of interference with their form of government or 
of the despoilment of their territory under any dis 
guise. But, short of this, when the question is one 
of a money claim, the only way which remains, 
finally, to collect it is a blockade, or bombardment, 
or the seizure of the custom-houses, and this means, 
as has been said above, what is in effect a possession, 
even though only a temporary possession, of terri 
tory. The United States then becomes a party in 
interest, because under the Monroe Doctrine it can 
not see any European power seize and permanently 
occupy the territory of one of these Republics ; and 
yet such seizure of territory, disguised or undis 
guised, may eventually offer the only way in which 
the power in question can collect any debts, unless 
there is interference on the part of the United States. 

One of the difficult and increasingly complicated 
problems, which often arise in Santo Domingo, 
grows out of the violations of contracts and con 
cessions, sometimes improvidently granted, with 
valuable privileges and exemptions stipulated for 
upon grossly inadequate considerations which were 
burdensome to the State, and which are not infre 
quently disregarded and violated by the governing 
authorities. Citizens of the United States and of 
other Governments holding these concessions and 
contracts appeal to their respective Governments for 
active protection and intervention. Except for arbi 
trary wrong, done or sanctioned by superior author 
ity, to persons or to vested property rights, the 
United States Government, following its traditional 
usage in such cases, aims to go no further than the 
mere use of its good offices, a measure which fre 
quently proves ineffective. On the other hand, 
there are Governments which do sometimes take 
energetic action for the protection of their subjects 
in the enforcement of merely contractual claims, and 
thereupon American concessionaries, supported by 
powerful influences, make loud appeal to the United 
States Government in similar cases for similar ac 
tion. They complain that in the actual posture of 
affairs their valuable properties are practically con 
fiscated, that American enterprise is paralyzed, and 
that unless they are fully protected even by the 
enforcement of their merely contractual rights, it 
means the abandonment to the subjects of other 
Governments of the interests of American trade 
and commerce through the sacrifice of their invest 
ments by excessive taxes imposed in violation of 
contract, and by other devices, and the sacrifice of 
the output of their mines and other industries, and 
even of their railway and shipping interests, which 
they have established in connection with the exploi 
tation of their concessions. Thus the attempted so 
lution of the complex problem by the ordinary meth 
ods of diplomacy reacts injuriously upon the United 
States Government itself, and in a measure para 
lyzes the action of the Executive in the direction 
of a sound and consistent policy. The United States 
Government is embarrassed in its efforts to foster 
American enterprise and the growth of our com 
merce through the cultivation of friendly relations 
with Santo Domingo, by the irritating effects on 
those relations, and the consequent injurious influ 
ence upon that commerce, of frequent interventions. 
As a method of solution of the complicated problem 
arbitration has become nugatory, inasmuch as, in 
the condition of its finances, an award against the 
Republic is worthless unless its payment is secured 
by the pledge of at least some portion of the customs 
revenues. This pledge is ineffectual without actual 
delivery over of the custom-houses to secure the ap 
propriation of the pledged revenues to the payment 
of the award. This situation again reacts injuri 
ously upon the relations of the United States with 
other nations. For when an award and such se 
curity are thus obtained, as in the case of the Santo 
Domingo Improvement Company, some foreign Gov 
ernment complains that the award conflicts with its 
rights, as a creditor, to some portion of these rev 
enues under an alleged prior pledge ; and still other 
Governments complain that an award in any consid 
erable sum, secured by pledges of the customs rev 
enues, is prejudicial to the payment of their equally 
meritorious claims out of the ordinary revenues; 
and thus controversies are begotten between the 

United States and other creditor nations because of 
the apparent sacrifice of some of their claims, which 
may be just or may be grossly exaggerated, but 
which the United States Government can not inquire 
into without giving grounds of offence to other 
friendly creditor nations. Still further illustrations 
might easily be furnished of the hopelessness of the 
present situation growing out of the social disorders 
and the bankrupt finances of the Dominican Repub 
lic, where for considerable periods during recent 
years the bonds of civil society have been practically 
dissolved. 

Under the accepted law of nations foreign Gov 
ernments are within their right, if they choose to 
exercise it, when they actively intervene in support 
of the contractual claims of their subjects. They 
sometimes exercise this power, and on account of 
commerical rivalries there is a growing tendency 
on the part of other Governments more and more to 
aid diplomatically in the enforcement of the claims 
of their subjects. In view of the dilemma in which 
the Government of the United States is thus placed, 
it must either adhere to its usual attitude of non 
intervention in such cases an attitude proper under 
normal conditions, but one which in this particular 
kind of case results to the disadvantage of its citi 
zens in comparison with those of other States 
or else it must, in order to be consistent in its policy, 
actively intervene to protect the contracts and con 
cessions of its citizens engaged in agriculture, com 
merce, and transportation in competition with the 
subjects and citizens of other States. This course 
would render the United States the insurer of all 
the speculative risks of its citizens in the public 
securities and franchises of Santo Domingo. 

Under the plan in the protocol herewith submitted 
to the Senate, ensuring a faithful collection and ap 
plication of the revenues to the specified objects, we 
are well assured that this difficult task can be ac 
complished with the friendly co-operation and good 
will of all the parties concerned, and to the great 
relief of the Dominican Republic. 

The conditions in the Dominican Republic not 
only constitute a menace to our relations with other 
foreign nations, but they also concern the prosperity 
of the people of the island, as well as the security 
of American interests, and they are intimately as 
sociated with the interests of the South Atlantic 
and Gulf States, the normal expansion of whose 
commerce lies in that direction. At one time, and 
that only a year ago, three revolutions were in 
progress in the island at the same time. 

It is impossible to state with anything like ap 
proximate accuracy the present population of the 
Dominican Republic. In the report of the Com 
mission appointed by President Grant in 1871, the 
population was estimated at not over 150,000 souls, 
but according to the Statesman s Yearbook for 
1904, the estimated population in 1888 is given as 
610,000. The Bureau of the American Republics 
considers this the best estimate of the present popu 
lation of the Republic. As shown by the unanimous 
report of the Grant Commission the public debt of 
the Dominican Republic, including claims, was 
$1,565,831.59/4. The total revenues were 
$772,684.75- The public indebtedness of the 
Dominican Republic, not including all claims, was on 
September 12 last, as the Department of State is 
advised, $32,280,000 ; the estimated revenues under 
Dominican management of custom-houses were 
$1,850,000; the proposed budget for current admin 
istration was $1,300,000, leaving only $550,000 to 
pay foreign and liquidated obligations, and pay 
ments on these latter will amount during the ensu 
ing year to $1,700,000, besides $900,000 of arrear 
ages of payments overdue, amounting in all to 
$2,600,000. It is therefore impossible under exist- 
ing conditions, which are chronic, and with the 
estimated yearly revenues of the Republic, which 
during the last decade have averaged approximately 
$1,600,000, to defray the ordinary expenses of the 
Government and to meet its obligations. 

The Dominican debt owed to European creditors 
is about $22,000,000, and of this sum over $18,000,000
is more or less formally recognized. The rep 
resentatives of European Governments have several 
times approached the Secretary of State setting 
forth the wrongs and intolerable delays to which 
they have been subjected at the hands of the suc 
cessive Governments of Santo Domingo in the col 
lection of their just claims, and intimating that 
unless the Dominican Government should receive 
some assistance from the United States in the way 
of regulating its finances, the creditor Governments 
in Europe would be forced to resort to more effec 
tive measures of compulsion to secure the satisfac 
tion of their claims. 

If the United States Government declines to take 
action and other foreign Governments resort to ac 
tion to secure payment of their claims, the latter 
would be entitled, according to the decision of The 
Hague tribunal in the Venezuelan cases, to the pref 
erential payment of their claims; and this would 
absorb all the Dominican revenues and would be a 
virtual sacrifice of American claims and interests 
in the island. If moreover, any such action should 
be taken by them, the only method to enable them 
to secure the payment of their claims would be to 
take possession of the custom-houses, and consider 
ing the state of the Dominican finances this would 
mean a definite and very possibly permanent occu 
pation of Dominican territory, for no period could 
be set to the time which would be necessarily re 
quired for the payment of their obligations and un 
liquidated claims. The United States Government 
could not interfere to prevent such seizure and oc 
cupation of Dominican territory without either itself 
proposing some feasible alternative in the way of 
action, or else virtually saying to European Gov 
ernments that they would not be allowed to collect 
their claims. This would be an unfortunate atti 
tude for the Government of the United States to be 
forced to maintain at present. It can not with pro 
priety say that it will protect its own citizens and 
interests, on the one hand, and yet on the other 
hand refuse to allow other Governments to protect 
their citizens and interests. 

The actual situation in the Dominican Republic 
can not, perhaps, be more forcibly stated than by 
giving a brief account of the case of the Santo 
Domingo Improvement Company. 

From 1869 to 1897 the Dominican Government 
issued successive series of bonds, the majority of 
which were in the hands of European holders. Suc 
cessive issues bore interest at rates ranging from 
2% to 6 per cent, and what with commissions and 
other deductions and the heavy discount in the 
market the Government probably did not receive 
over 50 to 75 per cent of their nominal value. Other 
portions of the debt were created by loans, for 
which the Government received only one-half of 
the amount it was nominally to repay, and these 
obligations bore interest at the rate if i to 2 per 
cent a month on their face, some of them com 
pounded monthly. 

The improvidence of the Government in its finan 
cial management was due to its weakness, to its 
impaired credit, and to its pecuniary needs occa 
sioned by frequent insurrections and revolutionary 
changes, and by its inability to collect its revenues. 

In 1888 the Government, in order to secure the 
payment of an issue of bonds, placed the custom 
houses and the collection of its customs duties, 
which are substantially the only revenues of the 
Republic, in the hands of the Westendorps, bankers 
of Amsterdam, Holland. But the national debt 
continued to grow and the Government finally in 
trusted the collection of its revenues to an American 
corporation, the Santo Domingo Improvement Com 
pany, which was to take over the bonds of the 
Westendorps. The Dominican Government finally 
became dissatisfied with this arrangement, and, in 
1901, ousted the Improvement Company from its 
custom-houses and took into its own hands the col 
lection of its revenues. The company thereupon ap 
pealed to the United States Government to maintain 
them in their position, but their request was refused. 
The Dominican Government then sent its minister 
of foreign affairs to Washington to negotiate a 
settlement. He admitted that the Improvement 
Company had equities which ought not to be 
disregarded, and the Department of State suggested 
that the Dominican Government and the Improve 
ment Company should effect, by private negoti 
ation, a satisfactory settlement between them. They 
accordingly entered into an arrangement for a set 
tlement, which was mutually satisfactory to the 
parties. A similar arrangement was likewise made 
between the Dominican Government and the Euro 
pean bondholders. The latter arrangement was 
carried into execution by the Dominican Govern 
ment and payments made toward the liquidation of 
the bonds held by the European holders. The Do 
minican Congress refused to ratify the similar 
arrangement made with the Improvement Com 
pany, and the Government refused to provide for 
the payment of the American claimants. 

In this state of the case it was evident that a continuance 
of this treatment of the American creditors, and its 
repetition in other cases, would, if allowed to run 
its course, result in handing over the island to 
European creditors, and in time would ripen into 
serious controversies between the United States 
and other Governments, unless the United States 
should deliberately and finally abandon its interests 
in the island. 

The Improvement Company and its allied com 
panies held, besides bonds, certain banking and 
railway interests in the island. The Dominican 
Government, desirous to own and possess these 
properties, agreed with the companies that the value 
of their bonds and properties was $4,500,000, and 
they submitted to arbitration the question as to the 
instalments in which this sum should be paid and 
the security that should be given. The Hon. George 
Gray, judge of the United States Circuit Court of 
Appeals, and the Hon. Manuel de J. Galvan, both 
named by the Dominican Republic, and the Hon. 
John G. Carlisle, named by the United States, were 
the arbitrators, and rendered their award on July 
14, 1904. By its terms the Dominican Government 
was to pay the above-mentioned sum of $4,500,000, 
with 4 per cent interest per annum, in monthly in 
stalments of $37,500 each during two years and of 
$41,666.66 each month thereafter, beginning with 
the month of September, 1904, said award to be se 
cured by the customs revenues and port dues of all 
the ports on the northern coast of Santo Domingo, 


The award further provides for the appointment of a 
financial agent of the United States, who was author 
ized, in case of failure during any month to receive 
the sum then due, to enter into possession of the 
custom-house at Puerto Plata in the first instance 
and assume charge of the collection of customs 
duties and port dues, and to fix and determine these 
duties and dues and secure their payment; in case 
the sums collected at Puerto Plata should at any 
time be insufficient for the payment of the amounts 
due under the award, or in case of any other mani 
fest necessity, or in case the Dominican Government 
should so request, the financial agent of the United 
States was authorized to have and exercise at any 
and all of the other ports above described all the 
rights and powers vested in him by the award in 
respect of Puerto Plata. Under the award the 
financial agent could only apply the revenues col 
lected toward its payment after he had first paid 
the expenses of collection and certain other obli 
gations styled "aparods," which constituted prior 
charges on the revenues assigned. These prior 
charges are specified in the award. The Dominican 
Government defaulted in their payments; and in 
virtue of the award and the authority conferred by 
the Dominican Government, and at its request, pos 
session was delivered of the custom-house of Puerto 
Plata to the fiscal agent appointed by the United 
States to collect the revenues assigned by the arbi 
trators for the payment of the award ; and in virtue 
of the same authority possession of the custom-house 
of Monte Cristi has also been handed over. 
I submit herewith a report of Mr. John B. Moore, 
agent of the United States in this case, and a copy 
of the award of the arbitrators. 

During the past two years the European claim 
ants except the English, whose interests were em 
braced in those of the American companies, have, 
with the support of their respective Governments, 
been growing more and more importunate in 
pressing their unsatisfied demands. The French 
and the Belgians, in 1901, had entered into a con 
tract with the Dominican Government, but, after 
a few payments were made on account, it fell into 
neglect. Other Governments also obliged the Do 
minican Government to enter into arrangements of 
various kinds by which the revenues of the Re 
public were in large part sequestrated, and under 
one of the agreements, which was concluded with 
Italy in 1903, the minister of that Government was 
empowered directly to collect from the importers 
and exporters that portion of the customs revenues 
assigned to him as security. As the result of 
chronic disorders attended with a constant increase 
of debt, the state of things in Santo Domingo has 
become hopeless, unless the United States or some 
other strong Government shall interpose to bring 
order out of the chaos. The custom-houses, with 
the exception of the two in the possession of the 
financial agent appointed by the United States, have 
become unproductive for the discharge of indebted 
ness, except as to persons making emergency loans 
to the Government or to its enemies for the purpose 
of carrying on political contests by force. They 
have, in fact, become the nuclei of the various revo 
lutions. The first effort of revolutionists is to take 
possession of a custom-house so as to obtain funds, 
which are then disposed of at the absolute discre 
tion of those who are collecting them. The chronic 
disorders prevailing in Santo Domingo have, more 
over, become exceedingly dangerous to the interests 
of Americans holding property in that country. 
Constant complaints have been received of the in 
juries and inconveniences to which they have been 
subjected. As an evidence of the increasing aggra 
vation of conditions, the fact may be mentioned 
that about a year ago the American railway, which 
had previously been exempt from such attacks, was 
seized, its tracks torn up, and a station destroyed 
by revolutionary bands. 

The ordinary resources of diplomacy and inter 
national arbitration are absolutely impotent to deal 
wisely and effectively with the situation in the 
Dominican Republic, which can only be met by 
organizing its finances on a sound basis and by 
placing the custom-houses beyond the temptation 
of insurgent chieftains. Either we must abandon 
our duty under our traditional policy toward the 
Dominican people, who aspire to a republican form 
of government while they are actually drifting into 
a condition of permanent anarchy, in which case 
we must permit some other Government to adopt its 
own measures in order to safeguard its own interests, 
or else we must ourselves take seasonable 
and appropriate action. 

Again and again has the Dominican Government 
invoked on its own behalf the aid of the United 
States. It has repeatedly done so of recent years. 
In 1899 it sought to enter into treaty relations by 
which it would be placed under the protection of 
the United States Government. The request was 
refused. Again in January, 1904, its minister of 
foreign affairs visited Washington and besought 
the help of the United States Government to en 
able it to escape from its financial and social dis 
orders. Compliance with this request was again 
declined, for this Government has been most re 
luctant to interfere in any way, and has finally con 
cluded to take action only because it has become 
evident that failure to do so may result in a situation 
fraught with grave danger to the cause of inter 
national peace. 

In 1903 a representative of a foreign Government 
proposed to the United States the joint fiscal con 
trol of the Dominican Republic by certain creditor 
nations, and that the latter should take charge of 
the custom-houses and revenues and give to the 
Dominican Government a certain percentage and 
apply the residue to the payment ratably of claims 
of foreign creditors. The United States Govern 
ment declined to approve or to enter into such an 
arrangement. But it has now become evident that 
decided action of some kind can not be much longer 
delayed. In view of our past experience and our 
knowledge of the actual situation of the Dominican 
Republic, a definite refusal of the United States 
Government to take any effective action looking to 
the relief of the Dominican Republic and to the 
discharge of its own duty under the Monroe Doctrine 
can only be considered as an acquiescence in some 
such action by another Government. 

That most wise measure of international states 
manship, the Platt amendment, has provided a 
method for preventing such difficulties from arising 
in the new Republic of Cuba. In accordance with 
the terms of this amendment the Republic of Cuba 
can not issue any bonds which can be collected from 
Cuba save as a matter of grace, unless with the con 
sent of the United States, which is at liberty at all 
times to take measures to prevent the violation of 
the letter and spirit of the Platt amendment. If a 
similar plan could now be entered upon by the 
Dominican Republic, it would undoubtedly be of 
great advantage to them and to all other peoples, 
for under such an arrangement no larger debt would 
be incurred than could be honestly paid, and those 
who took debts not thus authorized would, by the 
mere fact of taking them, put themselves in the 
category of speculators or gamblers, who deserved 
no consideration and who would be permitted to 
receive none; so that the honest creditor would on 
the one hand be safe, while on the other hand the 
Republic would be safeguarded against molestation 
in the interest of mere speculators. 

But no such plan at present exists; and under 
existing circumstances, when the condition of af 
fairs becomes such as it has become in Santo Do 
mingo, either we must submit to the likelihood of 
infringement of the Monroe Doctrine or we must 
ourselves agree to some such arrangement as that 
herewith submitted to the Senate. In this case, for 
tunately, the prudent and far-seeing statesmanship 
of the Dominican Government has relieved us of all 
trouble. At their request we have entered into the 
agreement herewith submitted. Under it the cus 
tom-houses will be administered peacefully, honestly, 
and economically, 45 per cent of the proceeds being 
turned over to the Dominican Government and the 
remainder being used by the United States to pay 
what proportion of the debts it is possible to pay 
on an equitable basis. The Republic will be secured 
against over-seas aggression. This in reality en 
tails no new obligation upon us, for the Monroe 
Doctrine means precisely such a guarantee on our 
part. 

It is perhaps unnecessary to state that no step of 
any kind has been taken by the Administration 
under the terms of the protocol which is herewith 
submitted. 

The Republic of Santo Domingo has by this 
protocol wisely and patriotically accepted the re 
sponsibilities as well as the privileges of liberty, 
and is showing with evident good faith its purpose 
to pay all that its resources will permit of its obliga 
tions. More than this it can not do, and when it 
has done this we should not permit it to be molested. 

We on our part are simply performing in peaceful 
manner, not only with the cordial acquiescence, 
but in accordance with the earnest request of the 
Government concerned, part of that international 
duty which is necessarily involved in the assertion 
of the Monroe Doctrine. We are bound to show 
that we perform this duty in good faith and with 
out any intention of aggrandizing ourselves at the 
expense of our weaker neighbors or of conducting 
ourselves otherwise than so as to benefit both these 
weaker neighbors and those European Powers 
which may be brought into contact with them. It 
is in the highest degree necessary that we should 
prove by our action that the world may trust in 
our good faith and may understand that this in 
ternational duty will be performed by us within 
our own sphere, in the interest not merely of our 
selves, but of all other nations, and with strict 
justice toward all. If this is done a general ac 
ceptance of the Monroe Doctrine will in the end 
surely follow; and this will mean an increase of 
the sphere in which peaceful measures for the set 
tlement of international difficulties gradually dis 
place those of a warlike character. 

We can point with just pride to what we have 
clone in Cuba as a guaranty of our good faith. We 
stayed in Cuba only so long as to start her aright 
on the road to self-government, which she has 
since trod with such marked and distinguished 
success; and upon leaving the island we exacted 
no conditions save such as would prevent her from 
ever becoming the prey of the stranger. Our pur 
pose in Santo Domingo is as beneficent. The good 
that this country got from its action in Cuba was 
indirect rather than direct. So it is as regards 
Santo Domingo. The chief material advantage 
that will come from the action proposed to be 
taken will be to Santo Domingo itself and to Santo 
Domingo s creditors. The advantages that will 
come to the United States will be indirect, but 
nevertheless great, for it is supremely to our in 
terest that all the communities immediately south 
of us should be or become prosperous and stable, 
and therefore not merely in name but in fact in 
dependent and self-governing. 

I call attention to the urgent need of prompt 
action on this matter. We now have a great op 
portunity to secure peace and stability in the isl 
and, without friction or bloodshed, by acting in 
accordance with the cordial invitation of the gov 
ernmental authorities themselves. It will be un 
fortunate from every standpoint if we fail to grasp 
this opportunity; for such failure will probably 
mean increasing revolutionary violence in Santo 
Domingo, and very possibly embarrassing foreign 
complications in addition. This protocol affords 
a practical test of the efficiency of the United States 
Government in maintaining the Monroe Doctrine. 

THEODORE ROOSEVELT. 

WHITE HOUSE, 
February 75, 1905.