This temporary arrangement went
into effect on April 1, 1905. The new controller and general receiver
of Dominican customs arrived with several American assistants and soon
had the receivership service admirably organized. The effect was
immediate. The creditors ceased their pressure, confidence returned,
interior trade revived, smuggling was eliminated, the exports and
imports increased and the customs receipts took a leap upwards.
It was believed that the opposition in the United States Senate would
be diminished, if, instead of the United States both adjusting the
debt and collecting the money for its payment, the Dominican Republic
should make a direct settlement with the creditors, and the United
States merely undertake to administer the customs for the service of
the debt as adjusted. Accordingly the Dominican government appointed
the minister of finance, Federico Velazquez, as special commissioner
to adjust the Republic's financial difficulties. After long and
tedious negotiations, Minister Velazquez and his able adviser Dr.
Hollander evolved three conditional agreements:
(1) An agreement with the banking firm of Kuhn, Loeb & Co.
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