Fifty Years of Public Service / Personal Recollections of Shelby M. Cullom, Senior United States Senator from Illinois

by Shelby M. Cullom

"(Signed) John Hay."

From 1865, until the time that the United States assumed the collection of customs, conditions in Santo Domingo were about as bad as they could be in every respect. One revolution succeeded another. There had been twenty-six different Administrations since 1865, only one of which was brought about by means of a regular election. Most of the others were caused by revolutions, assassination, forced resignations, and a general condition of anarchy. Debt after debt, bond issue after bond issue, piled up, each Administration seemingly bent only on seeing how much actual cash could be raised, utterly regardless of obligations assumed. None of the principal and only a trifling portion of the interest were paid, and it seems that the different Administrations never had any intention of liquidating the obligations of the Republic. The principal portion of the bonds was held by European creditors.

But finally the Santo Domingo Improvement Company, an American corporation, succeeded as the fiscal agents of the Republic, to float its bond issues. The improvement company was displayed, and its claim was settled for four million, five hundred thousand dollars. Then a protocol was entered into between the United States and Santo Domingo by which the manner of payment was submitted to arbitration, our arbitrators being Judge George Gray and John G. Carlisle. An award was rendered providing that an agent of the United States should take possession of certain custom houses, in order to pay a debt which the Government of Santo Domingo had acknowledged to be due an American corporation.

This did not satisfy foreign creditors, French, Belgian and Italian, who had actually been given, by an agreement with Santo Domingo, the right to collect revenues at certain custom houses. Santo Domingo appealed to the United States and the foreign Governments threatened that if the United States did not enforce some remedial plan, they would be compelled to take action for the relief of their own citizens, whose claims aggregated twenty million dollars. Italian warships were already in Santo Domingo waters ready to enforce their demands. This, briefly, was the condition of affairs when the protocol of 1905 was submitted to the Senate for ratification.

For more than a quarter of a century we have had a peculiar interest in Santo Domingo. As is well known, under the Administration of President Grant a treaty was negotiated and sent to the Senate providing for the annexation of Santo Domingo. Senator Sumner was Chairman of the Committee on Foreign Relations, and as such was able to prevent the consideration of the treaty by the committee, and its ratification by the Senate. Some one said that the only objection that Charles Sumner had to the treaty was that President Grant had suggested it first. This was one of the reasons why Senator Sumner was deposed as chairman of the Foreign Relations Committee. It would probably have been better for the United States, and it certainly would have been better for the Dominican Republic, if the treaty had been ratified.

The protocol submitted to the Senate involved very large responsibilities on the part of the United states. It provided that the United States was to adjust all the obligations of the Republic, the arrangement of the payment, to pass upon all claims of Santo Domingo, determine their amount and validity, take charge of all the custom houses, and collect and disburse the customs receipts, giving to Santo Domingo forty-five per cent of the customs receipts and devoting the balance to the liquidation of her debts.

This protocol had the active opposition of the minority of the committee and in the Senate and, in addition, such conservative members as Senator Hale and other prominent Republicans opposed it. We fought over it in committee month after month; but finally, on March 10, 1905, it was reported by me to the Senate with a large number of amendments. It was considered by the Senate, recommitted at the end of the Congress, and again reported at the following Congress. But those in favor of it became convinced that we did not have the two-thirds necessary to ratify it, and it was never brought to a vote. It was thought that nothing more would be heard of the Santo Domingo protocol; but Senator Root, when Secretary of State, took the subject up de novo, and made a new treaty, in which the United States did not assume the broad obligations it assumed under the first one, and which was not generally of so complicated a character.

It imposed the duty upon the Santo Domingo Republic itself of arriving at an adjustment with its creditors, conditioned only on the administration of the custom houses by the United States.

In the meantime, an arrangement was made by American banking houses to furnish the money to liquidate the debt; the creditors were satisfied; the foreign debt was liquidated on a basis of fifty per cent of the face value, and domestic debts and other claims less than ten per cent. A loan of twenty million dollars was made through Kuhn, Loeb & Company, of which the Dominican Republic received nineteen million dollars for the payment of its debts; seventeen million dollars was used to satisfy thirty-one million, eight thousand dollars worth of bonded debts, and the remaining two million, two thousand dollars were to go for internal improvements.

There was some objection to the ratification of the treaty negotiated by Secretary Root, but not of a very serious character, and the treaty went through, even Senator Morgan not opposing it. I had the honor of reporting it and having charge of it in the Senate.