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<strong>COPY</strong> <strong>»</strong><br />
"<strong>DQH8A*</strong> <strong>FI</strong>_j <strong>fiJ</strong> ;;<strong>TT</strong> S -
Gentlemen,<br />
larch 29, 19hh<br />
The following audit and other matters have received our attention in<br />
the last two days:<br />
1. Completed examination of cancelled checks, and deposits,<br />
and reconciled the bank accounts right through February<br />
29, 19**« Balances were checked against independent confirmations<br />
from the respective banks.<br />
2. Bade substantial test-checks of officially pre-numbered<br />
reoeiving end payment vouohers together with supporting<br />
documents. There were no discrepancies.<br />
3. Examined 19*1^ transactions to date to determine accruals<br />
affecting the year 19^3.<br />
*<strong>»</strong>. Discussed with Mr. Bein, matter of the existence of contingent<br />
liabilities and assets. Mr. Bein advised that there<br />
are no law suits pending against Dorsa and that Dorsa has<br />
no suits pending against others; that no land or other<br />
purchase contracts have been executed by Dorsa; there are<br />
no labor contracts outstanding; and no conveyances of Dorsa<br />
property have as yet been made to homesteaders or others.<br />
Mr. Bein signed our regular contingent asset and liability<br />
statement without noting any exceptions. In connection with<br />
the matter of property conveyances, Mr. Bein stated that he<br />
had discussed this matter with Dr. Hexter and others during<br />
his last visit to New York but because of the many complicated<br />
factors involved, no final deoision could be reached<br />
at that time.<br />
5. To date, several of the independent confirmations have been<br />
signed by homesteaders and others, acknowledging Dorsa properties<br />
in their possession which have been charged to their<br />
individual aocounte. Before leaving here next week, expect<br />
to have most of these confirmations. The confirmations are<br />
in lieu of physical inventories whioh would have had to be<br />
made by Dorsa.<br />
6. Independent confirmations have also been requested on socalled<br />
short term loans receivable from homesteaders and<br />
others. Such loans in the most part are repayable out of<br />
homesteaders 1 inoome or other sources, over a period of from<br />
k to 12 months. However, loans for the purchase of cows<br />
are repayable over a period of 2 to q- years. Formal repayment<br />
agreements have been signed by borrowers.<br />
7. Have examined the detailed schedule of loans to homesteaders<br />
and others, the aggregate of which agrees with the oontrol<br />
account in th° general ledger. The provision for possible<br />
losses on loans to Batey people was reviewec and discussed
"DORA" rmO L'-<strong>TT</strong>^l •;? -2- h&roh ?'?, 19W<br />
with Kr, Bein. By previous official decision no provisions<br />
for possible losses have been t'.ade for loans<br />
to homesteaders and industrialists.<br />
«. Discussed with Mr, Bein the possibility of breaking down<br />
our statement of expenditures for the year 19^3 to show<br />
separately the transactions of the Batey Administration<br />
and General Administration. w"e have come to the conclusion<br />
that this would be an extremely difficult job and that as<br />
far as Mr. Bein understands, the Reparation does not go<br />
into effect until Aoril 1st, 1$W anyhow. Aooorpingly<br />
this statement will be presented for the year 19^3 as<br />
heretofore.<br />
(Signed) Joseph A. Loewenstein<br />
J AT: ea
00 •'• Y<br />
"DOftSA" riILP yC<strong>TT</strong>IR #g<br />
Gentlemen,<br />
Sosua<br />
March 29, 19UU<br />
The following audit and other matters have received our attention in<br />
the lest two days:<br />
1. Completed examination of oancelled cbeoks, and deposits,<br />
and reconciled the bank accounts right through February<br />
29 f i9hh. Balances were checked against independent confirmations<br />
from the respective banks.<br />
2. X'ade substantial test-checks of officially pre-numbered<br />
receiving and payment vouchers together with supporting<br />
documents. There were no discrepancies.<br />
"*. examined 19^ transactions to date to determine accruals<br />
affecting the year 19^3.<br />
i<strong>»</strong>. Discussed with Mr. Bein, matter of the existence of contingent<br />
liabilities and assets, ler. Bein advised that there<br />
are no law suite pending against Dorsa and that Dorsa has<br />
no suits pending against others; that no land or other<br />
purchase contracts have been executed by Dorsa; there are<br />
no labor contracts outstanding; and no conveyances of Dorsa<br />
property have a6 yet been made tc homesteaders ot others.<br />
Mr. Bein signed our regular contingent asset and liability<br />
Statement without noting any exceptions. In connection with<br />
the matter of property conveyances, Mr. Bein stated that he<br />
had disousped this matter with Dr. Hexter and others during<br />
his last visit to New York but because of the many complicated<br />
factors involved, nc final decision could be reached<br />
at that tim«.<br />
5. To date, several of the independent confirmations have been<br />
signed by homesteaders and others, acknowledging Dorsa properties<br />
in their possession which have been charged to their<br />
individual accounts. Before leaving here next week, expect<br />
tc have most of these confirmations. The confirmations are<br />
in lieu of physical Inventories which would have had to be<br />
made by Dorsa.<br />
6. Independent confirmations have also been requested on socalled<br />
short term loans receivable from homesteaders and<br />
others. Such loans In the most part are repayable out of<br />
homesteaders• income or other sources, over a period of from<br />
h to 12 months. However, loans for the purchase of cows<br />
are repayable over a period of 2 to * years, formal repayment<br />
agreements have been sicrned by borrowers.<br />
7. Hav« examined the detailed schedule of loans to homesteaders<br />
and others, the aggregate of which agrees with the oontrol<br />
account in the general ledger. The provision for possible<br />
losses on loans to Batoy people was reviewed and dlecussed
'"•mk* <strong>TT</strong>-;l.i}..lilJ2Ul2 ~ ? - March 29, 19M<br />
with Mr. Bein. By previous official deoislon no provisions<br />
for possible losses have been and* for loans<br />
to homesteaders and industrialists.<br />
.*. Discussed with ? r. B*in the possibility of breaking down<br />
our statement of expenditures for the year 19M3 to show<br />
eeparately the transactions of the Bat^y Administration<br />
and General Administration. Is have come to the conclusion<br />
that this would be en extremely difficult Jou and that as<br />
far as Mr. Bein understands, the separation does not go<br />
into effect until April 1st, 1944 anyhow. Accordingly<br />
this statement will be presented for the year 19^3 as<br />
heretofore.<br />
(Signed) Joseph A. Loewensteln<br />
TAL;8a
1<br />
<strong>COPY</strong><br />
"DORSA" gjgjjg l 8, <strong>TT</strong> y i fc3<br />
So sua, March 31, 1941*.<br />
Accomplished the following in the past 2 days:<br />
1. Examined insuranoe policies and checked saiae against independent<br />
confirmations received from the insuranoe brokers.<br />
Dorsa is oovered by Lloyds of London for fire, cash In<br />
transit, public liability, automobile liability and property<br />
damage. Workmen's compensation insuranoe 1B covered by a<br />
Dominican insuranoe company. Fidelity Insurance for Dominican<br />
and New York employees has not yet been arranged for. We<br />
undersiand that the entire insurance matter "Is "being studied<br />
in New York and there is an inclination to transfer all<br />
insurance matters to American companies.<br />
2. We have made a substantial test-check of the payroll and have<br />
obtained a detailed salary schedule for the entire year of<br />
19^3 which we have re-checked and Is in agreement v-ith the<br />
books and records. Have witnessed payroll, household, and<br />
pocket money distributions and oheeked signatures against<br />
the specimens on file, and against employees' oedulas (Dominican<br />
government identification cards). There were no discrepancies.<br />
Many of the signatures consist of (X) crosses, because of the<br />
illiteracy situation.<br />
3. Examined the new Homestead agreements, signed by very recent<br />
Homesteaders, covering oonditions and regulations of their<br />
Homestead settlements. Previously, Homesteaders signed a<br />
different form of agreement which is expected will be replaced<br />
by the new ones.<br />
h. "Examined the short and medium term repayment agreements signed<br />
by Homesteader8 and others for loans repayaole out of current<br />
inoome, pocket money or other souroes. The schedule of these<br />
loans agrees with the control account in the general ledger.<br />
5. Examined the schedule of payments to settlers' relatives for<br />
the year 19 h 3 and found same in order. A total of a little<br />
over $12,000. was spent by the Dorsa for SI settlers' relatives<br />
for which the J.D.C. reimbursed Dorsa New York office. The<br />
maintenance consists of food, hospitalization, medical supplies,<br />
dental care, clothing and household articles, and payments for<br />
residenoe permits.<br />
6. Examined the budgetary oontrol system and procedures and found<br />
same intelligently and comprehensively maintained, konthly<br />
comparisons with actual experience are being made. Our formal<br />
report will contain a summary of the 19^3 budget for the Dominican
M DP33A" TV LP feHUg yJ -2- March 31, 19^.<br />
Republic activities only. Within the next day or so, we<br />
plan to review the 1944 budget as prepared by Mr. Bein.<br />
This budget will probably be subject to changes resulting<br />
from the separation which goes into effect on April let,<br />
I944.<br />
7. Checked several of the general ledger account analyses<br />
against the books and supporting documents.<br />
S. Have already prepared several of the supporting schedules<br />
for our formal 19^3 report.<br />
Very truly yours,<br />
(Signed) Joseph A. Loewenstein
"ppRBA" <strong>FI</strong>RLD jjrtym/f4-<br />
Sosua, April ?nd, 1J44,<br />
I have the following report for the past 2 days:<br />
1. Examined journal vouchers and supporting documents covering<br />
various year-end and other adjustments. All entries were<br />
officially approved and satisfactorily explained.<br />
2. Test-checked inventory schedules as of Deoeiioer ?1, 19 il 3 as to<br />
priolngs and ooapariaicne with perpetual inventory cook figures.<br />
Inventories were taken by Dorsa personnel, on Dec. ?lst, 19*3 •<br />
of all eoulpment, supplies, rolling stock, iive-stoo*, etc.,<br />
Witb th« exception of the equipment in settlers' a.nz guest<br />
houses and administration buildings. Mr. Bein explained that<br />
this inventory?as not taken then, because of the ponding<br />
'separation' matter. However, this Inventory was taken on<br />
March ?let, 1944, Normal shortages resulting from wear and<br />
tear, etc., ar* indie ted. Book inventories were adjusted to<br />
reflect, the actual physical inventory figures as of December<br />
"'let, 1943. ?ith the exception of the equipment of the<br />
communal kitchen and hospital, variances could be considered<br />
normal, resulting from breakage, wear and tear and "expected"<br />
reasons. The differences in the communal kitchen and hospital<br />
mlstht be considered slightly above normal. Mr. Bein and the<br />
persons ^:ho<br />
took the inventory have ei«ned all of the inventory<br />
sheets which will be checked oe to mathematical accuracy.<br />
^ave made substantial spot-tests of material, supplies, etc.<br />
in th^> various warehouses, commissary, etc All items tested<br />
agreed with the ^roetual inventory records. In this connection,<br />
invoices were tested against perpetual inventory records,<br />
3. rede comprehensive tests of additions to capital sssste during<br />
the ysar lf43 by reference to detailed vouchers, pay rolls, etc.<br />
and by actual physical inspection of the assets.<br />
U. Reviewed the detailed depreciation schedules with <strong>»</strong>,r. Bein; and<br />
also discussed the adeouacy of the reserve for possible losses<br />
against non-homesteaders' accounts. Both appear to be reasonable<br />
5, Spent a considerable amount of time reviewing the statement of<br />
income and expenditures for the year 1943 compared with the year<br />
194? and from inception, Decemcer 1939, through December 194j.<br />
Th*r<strong>»</strong> was a total reduction In expenditures in 1943 ot approximately<br />
*70,000. (*21%000. in 19&3, against $2*5.000. in 1948s<br />
an
,<br />
2 -<br />
"fORSA" FlflP LE<strong>TT</strong>ER ifi 3osua, April 2nd, 19^4.<br />
6. Doraa is the owner of 36 shares of a 120 issueu and outstanding<br />
shares of the Cooperative Industrial Lechers, 0. per<br />
A. Saoh share has a oar v*lue of : 10.00, Dorsa purohaeed<br />
these shares in 19^2 for $360.00. During the year 1943, Dorsa<br />
paid over an additional §540.00 (based on 36 shares at $15.00<br />
per share) to the Cooperative, representing a so-called long<br />
term loan, without interest. All other share-owners participated<br />
likewise. I have physically exasined the 36 shares<br />
which are all in the Sosua safe.<br />
The Cooperative Industrial Leonera, C. per A. is a Dorsa<br />
creation; is owned by 85 settler shareholders, and Dorsa is<br />
owner of 36 shares. The Cooperative is successfully engaged<br />
In the production of butter and cheese.<br />
The following statistic may be of interest (year 19"3):<br />
1,240,196 lbs. milk delivered by members QlJtQixjUl<br />
4-1.161 lbs. butter sold <strong>»</strong>19,394.27<br />
194,45a lbs. fresh milk sold 4,$?2.2S<br />
by-oreducts ,?.741.80<br />
total sales<br />
>2o f o5S.3p-<br />
Total profits<br />
OJJMASS<br />
Total dividends paid | 3.5S5.34<br />
lbs. average dally production of Soaua cows<br />
lbs. country average per day and cow.<br />
I<br />
7. ^orea operates a straw work shop, employing several Batey people.<br />
Straw handbags, luncheon sets, etc. are mads and sold in Ciudad<br />
TrujillQ and elsewhere. Rave examined the products which look<br />
quite good. The industry holds excellent promise for the future,<br />
The total oosts of operation for the year amounted to approximately<br />
#2100.00 with sales of approximately $2,000.00, leaving<br />
a very slleht loss which is considered quite an achievement.<br />
ft. Attended a meeting of the Industrial and Batey people. The<br />
principal speaker of this meetinsr was Dr. Walter 3aum. His<br />
speech was lucid and frank. The reactions, on th* whole, seemed<br />
patisfaotory. As you know Dr. Baum has become director of the<br />
Batey Administration in which capacity he will attempt to make<br />
th
<strong>COPY</strong><br />
"DORSA" <strong>FI</strong>ELD LE<strong>TT</strong>ER jg<br />
April S, 1944.<br />
(<br />
_<br />
Accomplished the following within the past week;<br />
1. Completed examination of account analyses, journal vouchers etc An<br />
discretionary and other payments were approved by Messrs Arons and Bein.<br />
2. Completed trial balanoe and work sheet of Sosua operations which T<br />
consolidated with the New York transactions.<br />
3. Completed our detailed audit report on a cumulative basis, through<br />
S<br />
December 31, 1943. (Reviewed with Mr. Bein). '<br />
4. Completed Federal Income and Exoess Profits Tax Return for the year 1943.<br />
5. Have forwarded under separate cover, via Registered Air Mail the<br />
following:<br />
'<br />
(a) A detailed typewritten audit report through<br />
December 31, 1943.<br />
(b) Pencil copy of the 1943 Federal Inoome Tax Return with<br />
attached supporting data, together with our 1942 Return.<br />
6. Counted and reconciled the #1,020.00 imprest funds in Ciudad.<br />
The financial picture of the Dorsa from inception, December 1939 through<br />
, December 31, 1943 may be summarized in the following manner; '<br />
The total cash and other receipts available from the beginning of work in<br />
the late Autumn of 1939, through the close of the year 1943, for the<br />
preparation and development of settlement activities in Sosua, amounted<br />
to #1,553,653.92 (including land and some buildings acquired from<br />
Generalissimo Trujillo for #100,000 of Dorsa stock). On December 31 1947<br />
Dorsa had a cash balanoe of $37,151.43.<br />
'<br />
J)<br />
r<br />
L<br />
Therefore, Dorsa, for slightly over four years aotually expended a errand<br />
total of $1,516,502.49. Of this, the sura of_$6g5,S95.33 represents<br />
capital investments for establishing and developing the settlement. The<br />
assets representing the same include land (acquired from Generalissimo<br />
dormitories, offices, milking barns and farm structures, were erected.'<br />
Non-recoverable expenses amounting to $g2S,947.51 were found necessary<br />
by Dorsa in maintaining, educating and training settlers, hospitalization<br />
sanitation, and all the many related incidentals required in initial work*<br />
in building up a colony. On December 31, 19^3, Dorsa had other net<br />
recoverable items, consisting mainly of accounts receivable, amountine to<br />
$1,659.65.<br />
Accordingly, as of December 31, 19^3, approximately 45$ of the expenditures<br />
existed in assets represented by capital investments (at partially<br />
depreciated values), and approximately 55$ was used for maintenance of<br />
non-homesteaders and homesteaders, training, medical care, etc. It is
f. . • *<br />
"DORSA" <strong>FI</strong>ELD LE<strong>TT</strong>ER #5 -2- April g, 1944.<br />
c<br />
obvious that because of the almost complete termination of the building program<br />
and the general curtailment of activities, that the ratio of nonreooverable<br />
expenditures to oapital expenditures will steadily increase,<br />
unless of course, more people can be helped to become self-sustaining. The<br />
separation of the Batey group (non-homesteaders) under the leadership of<br />
Dr. Baum, solve a difficult problem. Dr. Baum has good judgment and constructive<br />
ideas.<br />
The total expenditures (non-reooverable) for the year 19^3, approximated<br />
$215,000 as compared with a little over $285,000 for the year 1942, a<br />
decrease of $70,000 in 1943. Slightly over $12,000 was added to oapital<br />
investments during the year 1943. (Our comparative balance sheet for the<br />
years 1943 and 1942 will however indicate a decrease of about $9700 in<br />
capital investments in 1943. This is due to the addition of $21,700 to<br />
the Depreciation Reserves in 1943).<br />
The other night, I attended a meeting of Homesteaders presided over by<br />
Mr. Bein, It was well attended, orderly, and devoted to discussions of<br />
ourrent problems of lively interest. There appeared to be a willingness<br />
to cooperate. One of the topics was the matter of conveyances of homesteads<br />
whioh question was raised by one of the homesteaders. Mr. Bein<br />
explained that this was a rather difficult and complicated problem whioh<br />
was discussed by him during his recent visit to the States, and that it<br />
was still under consideration by officials in New York.<br />
(*<br />
Very truly yours,<br />
(Signed) Joseph A. Loewenstein<br />
/