As in Nicaragua, the Wilson administration inherited a difficult situation in the Dominican Republic. Political instability and nonpayment of debts threatened U.S. business interests and invited European intervention in the country as early as 1904. These problems influenced President Theodore Roosevelt to announce a corollary to the Monroe Doctrine that assumed a unilateral right for the United States to intervene in Latin America. After the Taft administration intervened in a civil war in the Dominican Republic in 1912, Archbishop Adolfo A. Nouel became president; he resigned in late March 1913, however, giving up the almost impossible task of pacifying the various political factions.
The Dominican situation demanded astute action by the Wilson administration; but Secretary of State Bryan replaced a competent minister, William W. Russell, with James M. Sullivan. Sullivan was associated with New York financiers who controlled the National Bank of Santo Domingo, an institution hoping to become the depository of funds collected by the receiver general of Dominican customs. Sullivan later resigned after a State Department investigation disclosed his deficiencies. Another bad appointment was that of Walter C. Vick as receiver general. Bryan's choices inevitably led to inaccurate, biased reports from the Dominican Republic.
In September 1913, when a new revolt broke out against the provisional government in Santo Domingo, Bryan announced that the United States would not recognize any revolutionary regime, thus invoking Wilsonian constitutional legitimacy. After an armistice, the United States supervised elections in December 1913 for a constituent assembly, even though the Dominican government resented the outside pressure. With less than gentle prodding by Minister Sullivan, President José Bordas Valdés agreed to the appointment, in June 1914, of Charles W. Johnston as financial expert, with power to control Dominican expenditures. Following a U.S. electoral plan, the Dominicans held a presidential election in late 1914. The candidates, Juan Isidro Jiménez and Horacio Vásquez, represented the two strongest political factions in the country. Jiménez won and took office on 5 December 1914; the United States immediately pressed for more financial control and intervention privileges. Jiménez resisted these demands, but he could not overcome the continued opposition of his rivals, including Desiderio Arias, whom he dismissed as minister of war in May 1916. After Arias's forces took the city of Santo Domingo and Jiménez resigned, the United States intervened. Admiral William B. Caperton demanded that Arias withdraw and occupied the city. Fearing that Arias would come to power, President Wilson proclaimed full military occupation of the Dominican Republic on 26 November 1916. He cited political and fiscal disorder and the Dominican government's refusal to reform as reasons for the intervention. Undoubtedly, another factor was State Department concern about possible war with Germany and the influence of pro-German elements in the Dominican Republic.
Until 1924 a U.S. military government ruled the Dominican Republic. Although there were noticeable improvements—highway construction, establishment of the constabulary, expansion of the schools, and a better internal revenue collection system—the opposition to U.S. domination steadily increased. When the troops finally left late in 1924, a new treaty continued U.S. financial control.