The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-05-28
The Finances Of santo Domins 90.

The Finances Of Santo Domingo.
1t is doubtful if the history Of the world
shows anywhere a more lamentable rec
ord Of national financing than that OF
Santo Domingo. Perhaps the most re-
markable feature in it is that in all Of this
widest of wildcat financing there was
always some one who was willing or who
could be induced to lend.
The history Of these proceedings is
traced by Professor JACOB H. HoLLANDER
in the May issue Of the Quarterly Journal
of Economics. The record covers about
thirty-ive years. Professor HoLLAN-
DEF divides this into three periods: THE
genesis of the debt, 1857 TO 1887; the dec
ade Of bond issues, 1888 to 1897; and
the period Of floating debt accumula-
ton" At the beginning OF this term the
debt of the country was probably not far
from 81, 500, 900, a large part Of it being
of doubtful character. in 1859 there
appeared a bond issue, known as the
Hartman Loan, to the amount Of some
So, $50, 900 (a757,0 COO OF which 'by reason
of neglect, fraud or deliberate defalcation
less than $500, 900 (f3S, 095) was received
and accounted for by the Dominican
Government" This loan went into de-
fault three years later. During the
years 1872 to 1888 a large floating debt
accumulated. This was represented by
unpaid salaries, admitted claims for dam
ages sustained during days Of revolution,
treasury bills issued for the payment Of
war supplies, and by obligations incurred
through borrowing money for the ordi-
nary current expenses OF the Government.
Rates of interest on these accounts were
anything up to 10 per cent. a month.
In 1888 the bonded debt Of the island
was $S,S5O,Oo0 and the floating debt a
| somewhat indefinite quantity. During
that year the Westendorp Reggie fCaisse
| Generate de la Regial, or Gaia de Recau-
dacion, was organized to clear up and
presumably to pay off the debts Of the
| Dominican Government. In its opera
| ton this was virtually areceivership. In
| 1892 the rights and obligations Of this
concern were transferred to the San
Domingo Improvement Company Of New
| York" although the company was or
gained under the laws Of New Jersey.
Between 1888 and 1898 no less than seven
| bond issues we're emitted. Their aggre-
gate nominal value was nearly 50 600, 900,
This included various refunding opera
tons.
Some of this total represented new
loans obtained for various purposes to
which very little Of the money was ever
applied. A part of the proceeds of the
new loans was used to satisfy clamorous
creditors by "disoharging floating debts
and quieting indemnity claims" An
other and perhaps a very large part OF
it could only be accounted for by a now
impossible statement from the late Mr..
ULYSSES HRUREAUx, whose iron handed
rule began in 1884 and ended with his
assassination in 1899. In 1897 an eighth
and final bond issue was effected. This
also involved -cutthrost terms, prodigal
waste and unchecked procedure The
financial policy of HEUREAux, according
to Professor HoLIAEDER, appears to have
been "a mixture Of & degenerate's Gun.
ming and a bankrupt's reckleesness.
Yet he seems TO have found those who
would lend under such conditions as eI.
listed and were openly known TO exist.
The next FIVE years mark q period Of
disturbance and revolt. Presidents
came and went in quick succession
ousted by the same methods which they
employed in seizing control, Regarding
this period Professor HoLLASDER says:
In nnAneisl matters II meant ths, the wort
features OF HHunIAUxs administration were In
tsnihed. Each successive diets.or inclined q
become a more neeessitous and o more reckless
borrower. and each new advance was obtAinet
upan hArsher terms The nomInAi rate OF IntsreE
was rarsY Ies IMAM q per cent. . month. ana viii
respect 70 funSs OF vhiues actually received, severa
Lmss that rate
The situstlon eliminated in pressur,
being brought 70 bear by the Italian ant
the French Governments in the interes'
Of the claims Of their respective citizens
At this point, early In 1905, the UniteC
States interviewed, The step was takeI
on the premise laid down by Presiden'
RoosEvBDT that those who profit by Oh,
Monroe Doctrine must accept certain re
BponAibilitiet along With the rights which
II conferb'; and ON the around cot fortl
In a protocol Of an agreement aiRned b,