Upon the resignation of Morales the vice-president, General Ramon Caceres, assumed the presidency. Caceres was born in Moca on December 15, 1867, and was a prominent cacao-planter. It was he who killed Heureaux in 1899, after which he entered public life, being governor of Santiago and delegate of the government in the Cibao during the administrations of Jimenez and Vasquez, an exile in Cuba during the administration of Woss y Gil, and vice-president and governmental delegate during the administration of Morales. He had the appearance of an honest country squire, large of body and great of heart.
During the years 1906 and 1907 special attention was given to the settlement of the debts of the republic. A new bond issue of $20,000,000 was made for the purpose of converting the old debts, and an arrangement was effected with the principal creditors, by which the amounts due were reduced by about one-half. Instead of the still pending convention of February, 1905, with the United States, a new fiscal treaty was agreed upon, and approved by the United States Senate and the Dominican Congress, taking effect on August 1, 1907. In similarity with the provisions of the modus vivendi, the customs income of the Republic is collected by a General Receiver of Dominican Customs, appointed by the President of the United States, and a portion of the income is set aside by him for the service of the loan.
For years the various governments had been planning to revise the constitution of 1896, Vasquez even calling a constitutional convention; but the political kaleidoscope turned before such intentions could be realized. Conditions becoming sufficiently stable, a new constitution was promulgated on September 9, 1907. It was found unsatisfactory and a constitutional convention met in Santiago and on February 22, 1908, promulgated the present constitution, by which the presidential term was lengthened to six years and the office of vice-president abolished. An election was held and General Ramon Caceres was chosen president, entering upon his new term on July 1, 1908.
As a result of the Dominican-American fiscal arrangement the old debt was practically all canceled, burdensome concessions were redeemed, and a large portion of the surplus from the new bond issue was set aside for public works, of which several were undertaken. A few uprisings by dissatisfied chiefs remained local and unsuccessful. A border clash with Haiti, which in January, 1911, caused the dispatch of troops to the frontier, was settled by diplomacy. The hope of continued peaceful conditions gave a new impulse to agriculture, industry and commerce, and the exports and imports increased year by year.