American commerce with Santo Domingo would be further stimulated and strengthened by a tariff reciprocity agreement similar to the customs convention between the United States and Cuba. The mutual advantages of such an agreement would be enormous and the development of Santo Domingo would be effectively promoted. Closer relations would also be fostered by a postal convention applying the domestic rates of postage to all mail between the two countries, a good beginning having been made by a recent arrangement applying the domestic postage rate to letters between the United States and the Dominican Republic.
The Dominican Republic has twelve ports of entry, but nine-tenths of the foreign commerce goes through the ports of Macoris, Santo Domingo, Sanchez and Puerto Plata. The first two supply the import and export requirements of the southern portion of the Republic, the other two those of the Cibao. The other eight custom-houses exist for local convenience and for the prevention of smuggling. This is especially true of the three along the Haitian frontier. In former years there was considerable smuggling across the border, as the import duties on certain articles in Haiti are much lower than in the Dominican Republic. Although the profitable smuggling business demoralized trade in those regions, the government did not interfere with it owing to the difficulty of policing the wild and sparsely populated border district. The American general receiver determined that the back door should be guarded as well as the front entrance, and formed a frontier guard which stopped contraband traffic, though at a heavy cost, for two brave American officials have been killed and three wounded by smugglers and outlaws, while fourteen Dominican guardsmen and inspectors have been killed and twenty-three wounded. The expense of the three frontier custom-houses is greater than the revenue they produce, but entries in Azua, Monte Cristi and Puerto Plata increased significantly after the frontier guard began its patrolling. Incidentally the guard has helped to keep the boundary line in place.
In the seaports most of the loading and unloading is done by lighters, the wharves generally being small affairs. Only in Puerto Plata (where extensive harbor improvements are now under way), Macoris and Santo Domingo can larger vessels approach the wharves. All the wharves were built under concessions from the government, which, in the impossibility to provide them itself on account of its perpetual lack of funds, was obliged to procure their construction by granting the right to collect a specified wharf tax, more or less onerous, for a period of years. The Santo Domingo City wharf concession provided that everything exported from and imported into this city or any other coast point in the province must pay the tax, whether the wharf was used or not. The Samana wharf concession; as amended, gave the right to collect certain high wharf taxes for fifty years, from 1875 to 1925, in return for the building of a diminutive dock. One of the important objects accomplished through the 1907 bond issue was the redemption by the government of the monopolistic wharf concessions.
A peculiar feature of the country's domestic trade is that almost fifty per cent of it is in the hands of Syrians. These people are found in a number of the West India Islands, but nowhere have they gained such a foothold as in Santo Domingo. They appeared in the nineties, and for a number of years confined their activities to peddling goods about the country, both men and women traveling around with great bundles of merchandise which they spread out wherever they met prospective purchasers. Their next step was to establish retail stores and crowd the native Dominican storekeeper out, and of late years they have opened large business houses. They are not regarded as a desirable element, as they do not amalgamate or mingle with the Dominican population, but seem possessed of the single idea to make a fortune and return with it to their country.
Such part of the retail trade as is not controlled by Syrians, is mostly in the hands of Dominicans. The stores are generally small, with a limited stock of goods; they have no show-windows, but are arranged on the style of bazars. Fixed prices are rare and most sales become negotiations with the polite shopkeeper. In the country it is customary for the storekeeper to make advances of merchandise to the smaller farmers until crop time; they then pay him in cacao, coffee, tobacco or other farm products, which he remits to the seaport to the wholesale merchant with whom he deals.
The larger business houses are in a majority of cases owned by foreigners, principally of Italian, German, Spanish, American and Cuban citizenship, and now also including numerous Syrian firms. A majority of those classed as Americans are natives of Porto Rico. A number of these merchants arrived in Santo Domingo as poor men and by hard work and shrewd investment built up respectable firms. They carefully preserved their foreign nationality as a valuable asset which protected them from undue interference on the part of the government. One of the most prominent and successful merchants of Santo Domingo was the late J.B. Vicini, an Italian who came to the country penniless, but with his energy and sagacity amassed the largest fortune of the island. His business is now managed by his sons.
The larger merchants combine a banking business with their export and import business. The foremost of these private bankers of late years was Santiago Michelena, a Porto Rican. Less than ten years ago there was not a single bank in the Republic, but there are now three well equipped banking institutions, all of them with their local headquarters in the capital. One of these is the International Banking Corporation, which is connected with the National City Bank of New York; it entered the Dominican Republic in April, 1917, by taking over Michelena's banking business. It has a branch in Macoris and Puerto Plata and agencies and correspondents throughout the country. Another bank is the Royal Bank of Canada, which does a flourishing business in a number of the West India Islands; it has branches in five cities of the Dominican Republic. The third bank is the Banco Nacional de Santo Domingo, incorporated by Americans under the Dominican banking law of 1909, with a capital of $500,000. Although it has several branches, its business is not so active as that of the other banks, since it has lent most of its capital to the government. Under the banking law this institution has the right to issue bank notes, but it has not attempted to use the privilege.
Slowly the establishment of small factories has proceeded, for the partial provision of local needs. The principal cities have ice plants, of which some are subject to annoying interruptions. In the Cibao there are several sawmills. Further there are, in the larger cities, small establishments for the manufacture of cigars, cigarettes, matches, rum, straw hats, shoes, chocolate, soap and a few other articles. These are financed by Dominican capital and are not able to supply the local demand. In Santo Domingo City are the remains of a costly brewery erected by Americans with a view to supplying the West Indies; it was ruined, so local reports say, by bad management and has been idle for fifteen years. If the amount of soap used by a people is really an index of its degree of civilization, then the Dominicans can claim to be far advanced, for the consumption of soap manufactured in the country and imported, is very considerable. The government has encouraged manufacturing enterprises and repeatedly granted concessions exempting their machinery and raw material from import duties for specified periods. The number of manufacturing plants will doubtless increase, but agriculture is bound to remain the mainstay of the country.