It further took from
the Republic at rates very favorable to the Company a fifth, sixth and
seventh bond issue, in 1893, 1894 and 1895 respectively, aggregating
$4,250,000, for the payment of government indebtedness. The
obligations paid by the first two of these issues were in considerable
part inflated claims against the government, capitalized at excessive
interest rates, those satisfied by the 1895 issue arose principally
out of indemnity claims made by France for mistreatment of French
citizens and for debts due them.
The Dominican government took no warning from previous disasters but
continued in its course of reckless debt contraction. In order to
equip warships and arsenals it borrowed money right and left at rates
of interest which ranged anywhere from 18 to 30 per cent per annum.
The loans were guaranteed by customs revenues which the creditors were
authorized to collect direct from the importer. Thus the amount
collected by the "regie" was not sufficient to provide for the service
of the ever increasing bonded debt and in 1897 there was
another default.
Pages:
527
528
529
530
531
532
533
534
535
536
537
538
539
540
541
542
543
544
545
546
547
548
549
550
551