Financial problems developed for the new country as a result of non development, a growing population, and fiscal mismanagement. The combined effect of these financial pro blems, together with domestic political turbulence, created a "state near anarchy" by 1899 (Fagg, 1965, 152). In 1900, "foreign interests, particularly the U. S., moved in to . . . control the economy" (Wheaton, 1984, 420). As a part of this external control, President Theodore Roosevelt devised the
so called "Roosevelt Corollary" to the "Monroe Doctrine," "by which the United States sought to prevent" the development of conditions "in the Caribbean that might provoke intervention" by European powers (Fagg, 1965, 152). Among the more sig nificant of the actions imposed under the policy prior to 1916 were (1) an American takeover of the customs houses in the 3Dominican Republic in 1905, in an arrangement whereby the United States retained 55.0 percent of the collections for the servicing of the Dominican Republic's international debts (Fagg, 1965,), (2) the imposition of the United States dollar as the national currency of the Dominican Republic in 1905, and (3) the establishment of the United States National Bank in the Dominican Republic in 1912 (Wheaton, 1984).
In 1916, the President of the United States claimed that civil war had broken out in the Dominican Republic, and said that he feared that Germany might be contemplating aggressive actions with respect to the country (Wheaton, 1984; Fagg, 1965). As a result, he ordered an American occupation of the Dominican Republic in 1916 (Paxton, 1989). In his proclama tion, he "informed the Dominican congress that he would recog nize no president who was not sympathetic to the customs con trols and a constabulary directed by the Americans" (Fagg, 1965, 154).
Within weeks of the American invasion of the Dominican Republic in 1916, the Central Romana Sugar Refinery (under the control and owners...