Economic Foreign Policy of the United States

By Benjamin H. Williams | Go to book overview

CHAPTER XI
FINANCIAL SUPERVISION: OTHER FORMS OF CONTROL

THE COLLECTION OF INTERNAL REVENUES

The establishment of a foreign-administered internal revenue service in a financially controlled country is in some ways a more serious matter than the setting up of a customs receivership. Customs collections are directly made upon foreign shippers and the indirect consequences upon the people, while highly important, are not so easily traceable. The foreign control of internal tax collections evokes greater popular resentment. Aside from the infringement of national sovereignty, proposals to surrender control of this function of government have sometimes offended native' officials who have derived political benefit and financial gain from the ability to manipulate collections. On the other hand, the American government has not always been satisfied with customs control, but has found that the demands for increased allotments made upon it by the financially supervised government have made desirable control over internal revenues. The possibilities of violent fluctuations in foreign trade have made it precarious to rely entirely upon customs duties as security for loans. A well-developed system of internal taxation greatly supplements the customs revenues and acts as a stabilizer in times of need.1 Furthermore, it is possible for a government whose customs are pledged to the payment of a foreign loan to place internal revenue duties on imported articles and thus sidestep the customs control. The Dominican government2 and the government of Liberia3 have both used this method.

In the Dominican Government .--For a year or so prior to the American intervention of 1916 in the Dominican Republic, the attention of the United States had been called to the deplorable condition of the internal revenue collection service. Revenue stamps had been given away or sold at a heavy discount. Min-

____________________
1
"Inquiry into Occupation and Administration of Haiti and Santo Domingo," Vol. II, p. 1237.
2
See above, p. 191.
3
BUELL, "The Native Problem in Africa," Vol. II, pp. 808-809.

-197-

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