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The

laerican Vinister to the Secretary of State.

No. 158.]

AVERICAS LEGATION,

Habane, April 11, 1911. SIR: With reference to the project to enlarge our naral station at Guantánamo, I have the honor to transmit herewith a copy of a confidential memorandum which I read to Sr. Sanguily, the Cuban secretary of state. this afternoon. I have (etc.),

JOHN B. Jacksox.

The American Minister to the Cuban Secretary of State.

Vemorandum.)

1. See Naval station at Guantánamo.
II. See Claim for the cost of intervention in Cuba.

III. The attitude of the American Government with regard to the final settlement of the sovereignty over the Isle of Pines has been made clear in the treaty signed at Washington on March 2, 1904, which was submitted to the Senate for its approval, but on which no action has as yet been taken. It is believed that any effort to procure farorable action of the United States Senate upon this treaty at this time would inevitably result in much adrerse criticism and probably in the loss of the treaty. The American State Department conse quently considers that the wisest course is to allow the matter to remain where it is at present,

HABAXA, April 17, 1911.

i For remainder of this dispatch see Naval Station at Guantánamo, p. 121.

DOMINICAN REPUBLIC.

EXTRACT FROM THE MESSAGE OF THE PRESIDENT, DON RAMÓN CÁCERES, CONCERNING RELATIONS BETWEEN THE DOMINICAN REPUBLIC, HAITI, AND THE UNITED STATES.

Mile No. 839.032/1.

[Translation.) GENTLEMEN OF THE CONGRESS: Our relations with friendly nations have been maintained on a plane of equality and corresponding reciprocity, with nothing to regret in that sense except the difficulty with the Republic of Haiti in December of last year, and the hasty demand made on us by the Government of Italy in regard to the acquisition by the Government of the Santo Domingo dock and wharf concession.

The question with Haiti arose about a road which we ordered to be opened from the mouth of the Pedernales River to the southern bank of the Lake of Fondo, for the purpose of facilitating the transit of the frontier guard in their duty for the prevention of contraband trade on the southern frontier.

When these works had advanced somewhat along the eastern side of the river and near a place called Cabeza de Agua, the Haitian Government protested against the opening of the road and sent troops along the western bank of the Pedernales River to prevent the continuance of the work, alleging that said road was a boundary line which the Dominican Government was making in violation of the territorial rights of the neighboring Republic.

In the face of this threatening attitude of the Government of Haiti, which had even placed guards on our side, the Executive Power decided to dispatch an army corps well provisioned and equipped to the Pedernales frontier in order to be ready for any possible aggression which might impair our sovereignty, until the situation could be cleared up and there could be a definite statement of the right of the Dominican Government to do whatever it pleased on its own soil.

There was no necessity for a rupture, nor was it logical to expect it, since the common interests of both countries demand harmonious and reciprocal relations, and as probably neither the one nor the other would derive from a frontier war any advantage sufficient to compensate for the damages which would result from such a rupture.

At the proposal of Haiti there was named by both Governments a mixed commission to go to the place in question and investigate on the ground whether the Dominican forces sent to Pedernales had really encroached on Haitian territory, and if the road in question was within Dominican jurisdiction; but said commission had to terminate its conferences, scanels begin, on account of a substantial ditierence that had arisen betireen the two commissions as to the scope of the functions that had been given by the respective Gorernments

At this point the Gorernment of Haiti asked us to withdraw the forces which we bad at Pedernales and to submit to arbitration the general question of our frontier boundaries. For this purpose, and at the request of the Haitian Gorernment, the Government of the United States of North America hastened to protfer its good of. fices "in its earnest desire that peace should be preserved and a settlement both just and honorable of the present dispute between the two Republics should be reached."

In the face of this disagreeable incident it seems to me that we should no longer delay a formal and definite settlement of our frontier question with the neighboring Republic of Haiti; and I think the moment is propitious for working to secure once and for all that peace so necessary for the two nations that share the dominion of the island, and whose differences might give rise to very grave conflicts and international complications, which we must foresee and avoid, working for a lofty national interest which we should not disregard nor view with criminal indifference. Our forefathers made the country, employing all their energies and making all the sacrifices which those times and conditions permitted them. We must now try to preserve that work, undertaken with such efforts and sacrifices, and carry it on to a successful end, decorously and triumphantly.

[The remainder of the message pertains to matters irrelevant to this volume.]

TARIFF MODIFICATIONS UNDER THE TREATY OF 1907 BETWEEN

THE DOMINICAN REPUBLIC AND THE UNITED STATES.

File No. 3710/13.

The Minister of the Dominican Republic to the Secretary of State.

[Translation.]

DOMINICAN LEGATION,

Washington, January 4, 1910. EXCELLENCY: I have the honor to forward herewith to your excellency a copy of the tariff just voted by the Dominican Congress modifying that now in existence and which the Government of the Republic wishes to submit to the President of the United States in compliance with the provisions of article 3 of the Dominico-American Convention of May 3, 1907, which requires as an indispensable condition for the modification of the import duties of the Republic an agreement between the Dominican Government and the United States by which the former shall demonstrate and the President of the United States recognize that on the basis of the importations during the two years preceding that in which it is desired to make the modification of the said duties, and on the computation of the

I See Foreign R-lations, 1907, p. 309; Malloy's Treaties I, 420. The treaty was conJoded Feb. 8, 1907; ratifications exchanged July 8, 1907 ; proclaimed July 26, 1907.

amount and class of the imported and exported articles in each of these two years at the rate of the import duties it is proposed to establish, the total net customs receipts would in each of the two years have been in excess of the sum of $2,000,000 American gold.

The customs receipts have greatly increased in the last two years and largely exceeded the $2,000,000 set by the convention as the minimum which the customs receipts must aggregate before any change can be made in the existing duties, and evidence of this is found in the data compiled by the general receiver of customs.

It has also been proved that the modification in the new law will not cause a decrease in the amount of duties even though the Government's expectation that the importation of a considerable number of articles which were subject to prohibitory duties and now are moderately taxed should be disappointed. The new tariff, as aptly stated by Gen. Edward's last year's report of the Bureau of Insular Affairs, “has been carefully prepared with a view to remove many of the oppressive features of the present law, while at the same time it insures the income required to meet the requirements of the convention and the needs of the Dominican Government." Be pleased, etc.,

EMILIO C. JOUBERT.

File No. 3710/13.

The Secretary of State to the Minister of the Dominican Republic.

No. 11.]

DEPARTMENT OF STATE,

Washington, April 2, 1910. Sir: Referring to your note of January 4, 1910, wherewith you transmit a copy of the tariff which the Dominican Congress voted in modification of the former tariff of the Republic, and in which you state that your Government wishes to submit it to the President of the United States in compliance with the provision of article 3 of the American-Dominican Convention of February 7, 1907, I have the honor to inform you that the Dominican Executive has demonstrated and the President of the United States recognizes that on the basis of exportations and importations to the like amount and the like character, during the two years preceding January 1, 1910, the total net customs receipts would, at rates of duties as altered by the proposed new tariff, have been for each of such two years in excess of the sum of $2,000,000 gold.

The Department, therefore, further informs you that the Government of the United States agrees to the proposed modification of the import duties of the Dominican Republic, which modification was put into effect on January 1, 1910, with the understanding that the Government of the United States did not waive its right to subsequently disapprove the tariff if it did not conform to the terms of the convention of February 7,1 1907. Accept, etc.,

P. C. Knox.

1 Should be 8.

File No. 639.003 28

The Secretary of State to the American Vinister.

[Extract.] No. 29.)

. DEPARTMENT OF STATE,

Washington, Jarch 1, 1911, Sir: On August 16, 1910, there appeared published in the Gaceta Oficial of the Dominican Republic a law providing for the imposition of a stamp tax on foreign and domestic letters of exchange, on foreign lottery tickets which might be brought into the Republic, and on certain articles of import as designated in a schedule appearing in article 3 thereof.

On August 6, 1910, there appeared in the Gaceta Oficial a resolution of the Dominican Congress approving and putting into operation a municipal surtax upon articles of import levied by the commune of Santo Domingo.

Both these laws were passed without consultation with the United States, and the consent of this Government was never given to either,

The law creating the stamp tax applies to articles of importation and to that extent is tariff legislation. The municipal surtax is directed solely to articles of importation and is in its entirety tariff legislation.

The convention between the United States and the Dominican Republic of February 8, 1907, provides that the import duties of the Dominican Republic shall not be modified except by previous agreement between the Dominican Government and the United States. In pursuance of this provision the Government of the United States approved the tariff enacted by the Dominican Congress which was put into effect on January 1, 1910. At the time of the approval of the new tariff no change in the municipal or stamp taxes was suggested, and the Government of the United States naturally approved that legislation under the assumption that the taxes then in force which directly affect the importations into the Dominican Republic would remain as theretofore or would not be modified by the Dominican Government without the assent of the Government of the United States. Inasmuch as these taxes imposed by the Dominican Congress apply to imported articles and directly affect import commerce, they are in essence tariff legislation, and the approval of the Government of the United States is necessary to their validity. Their nature is not changed by the mere fact that they are designated as municipal or internal taxes.

As indicated above, these taxes recently levied or authorized by the Dominican Congress, although in form internal and municipal taxes, are in substance and effect additional import duties. It is also clear that in imposing these taxes the Dominican Congress has modified the previously existing import duties without the agreement or consent of the United States, as required by article 3 of the convention of February 8, 1907.

You will discreetly bụt earnestly take up this matter with the Dominican Government. Your representations at this time should be confined, first, to registering the opinion of this Government that the recent tax legislation is a modification of the Dominican import duties in the sense of article 3 of the convention and that the previous

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