HISTORICAL SKETCH.--AMERICAN INFLUENCE.--1904 TO DATE (1918)
Financial difficulties.--Fiscal convention with the United States.--Caceres' administration.-Provisional presidents.--Civil disturbances.--Jimenez' second administration.--American intervention.
The enormous foreign and internal debt left by the Heureaux administration had been constantly increased by ruinous loans to which the succeeding governments were obliged to resort during the years of civil warfare, until the country was in a condition of hopeless bankruptcy. In the beginning of 1904 every item of the debt had been in default for months.
Under pressure from foreign governments, the principal debt items due foreign citizens had been recognized in international protocols and the income from each of the more important custom-houses was specifically pledged for their payment, but in no case was payment made. One of these protocols, signed with the American chargé d'affaires, liquidated the government's accounts with the San Domingo Improvement Company, which had been turned out from the administration of custom-houses by President Jimenez, and provided for a board of arbitration to settle the manner of payment. The arbitrators determined the instalments payable and specified the custom-house of Puerto Plata and certain others as security, which were to be turned over to an American agent in case of failure to pay. No payment being made, the American agent demanded compliance with the arbitral award and on October 20, 1904, was placed in possession of the custom-house at Puerto Plata.
The other foreign creditors, principally French, Belgian, and Italian, naturally began to clamor for the payment of their credits and for the delivery of the custom-houses pledged to them. To have done so would have meant absolute ruin, as the government would have been entirely deprived of means of subsistence. In face of the imminent likelihood of foreign intervention the Dominican government applied to the United States for assistance, and in February, 1905, the protocol of an agreement between the Dominican Republic and the United States was approved, providing for the collection of Dominican customs revenues under the direction of the United States, and the segregation of a specified portion toward the ultimate payment of the debt. The treaty was submitted to the United States Senate, but that body adjourned in March, 1905, without final action. The creditors again became importunate and an interim modus vivendi was therefore arranged, under which the Dominican customs were to be collected by a receiver designated by the President of the United States, and the proportion mentioned in the pending treaty was reserved as a creditors' fund. The temporary arrangement went into effect on April 1, 1905, and the effect was immediately apparent. Confidence was restored, the customs receipts rose to higher figures than ever before, and the prospects of peace became brighter as revolutionists could no longer count on captured customhouses to replenish their exchequer.