The situation immediately changed as if by
magic. The imports and exports, and with them the income of the
government, quickly reached higher figures than the country had ever
seen, the national debt was scaled down by almost one-half and the new
Dominican bonds issued in 1907 to convert the old debt went nearly to
par in the markets of the world.
(a) Periodic accumulation of floating debt, owing to:
1. Political instability, requiring large outlays for soldiery,
for bribery of potential revolutionists, and for suppression
of actual revolutions.
2. Corruption of officials.
3. "Asignaciones" or pensions to mollify enemies and to reward
friends of the existing regime.
(b) Usurious interest computations, on account of:
1. "Bonus" in principal,
2. Extravagant interest rates.
(c) Interest default and compounding accumulations.
(d) Recognition and liquidation of excessive or illegal claims as a
condition of further advances.
In order to obtain more positive information with reference to
outstanding Dominican indebtedness, for use in connection with the
pending fiscal treaty, the American government in the early part of
1905 commissioned a financial expert, Prof.
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