Papers Relating to the Foreign Relations of the United States, With the Address of the President to Congress December 8, 1914
File No. 838.51/381.
Minister Blanchard to the Secretary of State.
Port au Prince, December 24, 1914.
Sir: Referring to my December 2, 10 a.m., and December 12, 11 p.m., I have the honor to forward herewith copy of the note dated December 10 which this Legation addressed to the Department of Foreign Relations in compliance with the cable instructions of the Department of State of December 7, 5 p.m., with reference to the refusal of the United States to regard as legal the proposed issue of paper money, together with a copy and translation of the note verbale received in reply thereto under date of December 15, 1914.
I have, [etc.]
Minister Blanchard to the Foreign Office.
Port au Prince, December 10, 1914.
The American Minister, in accordance with instructions from his Government, has the honor to inform the Department of Foreign Affairs that the United States will refuse to regard as legal the proposed issue of paper money.
The Foreign Office to Minister Blanchard.
Port au Prince, December 15, 1914.
note verbale.
The Department of Foreign Affairs has had the honor to receive the note verbale of December 10 by which the American Minister, in accordance with [Page 374] instructions from his Government, informs the Department that the Government of the United States will refuse to regard as legal the proposed issue of paper money.
The Department of Foreign Affairs begs the American Legation to be good enough to observe that no law, properly speaking, prohibits in Haiti the issue of paper money; that, quite to the contrary, several laws have, in the past, authorized such issues.
It is true that according to the terms of Article 13 of the contract of concession of the National Bank of the Republic of Haiti “from the establishment and during the life of the concession, the Government can neither issue paper money, fiduciary money nor nickel”; but, although the contract has been sanctioned by a law, the conventional character, synallagmatic of the act as found in Article 13, remains without doubt. And this act binds the Government of Haiti as much as it binds the National Bank of the Republic of Haiti. Now, if it can be established that the Bank has openly violated this contract, how can it complain that the Government, on its part, does not believe itself more obligated to it?
Article 23 states thus: “All diplomatic intervention is formally prohibited.”
Article 3 stipulates: The Bank shall be constituted a French Stock Company in accordance with French laws on such companies.” And now the Department finds itself in the presence not only of a diplomatic intervention, but further of an intervention produced by the American Legation to the benefit of a personne morale of French nationality.
The Department is therefore able to estimate, from a double point of view, that the intervention of the Legation of the United States in favor of the Bank is not legal, and, in consequence, begs the Legation to recognize that there is reason for desisting from this intervention. It limits itself, in this respect, to place its reserves [reservations].
And, as a matter of information, by a cordial deference to the Government of the United States—of which the special assistance has always been in the past so highly useful to the Republic of Haiti, so highly appreciated by her, and whose moral support is called to render to this country and to her Government services so eminent—the Department of Foreign Affairs does not hesitate to state here the positive reason, so clear as to be evident, which justifies in law and in fact the eventual issue of paper money.
In accordance with Article 9 of the contract of concession of the National Bank of the Republic of Haiti, the withdrawal of one-half of the paper money ought to be put in execution 15 months, at the latest, after the commencement of operations. And in accordance with Article 12 the law of withdrawal ought to be executory, i. e., promulgated and published, within one year after the commencement of operations.
These delays, thus determined, necessarily suppose the normal continuity of the existing situation. But this continuity has failed. Happenings constituting cases of force majeure have come to impede the strict execution of Articles 9 and 12 as to the time prescribed; they have deeply altered the original situation, and caused to miscarry the attempts made to put them in execution with a view to realize the monetary reform; and today we find ourselves in the presence of economic and financial conditions completely upset less by the political events of the country than by the formidable event of the European war.
Whether it is impossible to execute the last law on the retrait, on account of the grave economic and financial perturbations, is a question already settled, and by the National Bank itself. This is established, in effect, by the terms of its letter of August 1, 1914 to the Secretary of State of Finance (Moniteur of October 21 and 24, 1914):
The perturbations provoked by the international situation in all the foreign markets begin to have their repercussion in Haiti. The demands for gold flow in since this morning and the funds reserved for the retrait threaten to escape from us. It appears to us dangerous that the exchange of gold against notes, prescribed by the law of August 26, 1913, continue in these conditions.
The same case of force majeure is invoked equally by the Bank to suspend the execution of the current Budgetary Convention.
It has taken this measure, it writes on August 27 last, “by reason of the moratorium existing in France and of the impossibility of securing funds for the service of the Budgetary Convention.” It repeats on September 2: “This measure has been imposed upon us by exterior circumstances and the moratoria [Page 375] which they have provoked in all parts of the world.” It has again repeated on September 9: “The serious reasons which you have invoked, in justification of the measures taken by us, exists; no one can doubt it.” And it added: “They have even become stronger during these days by the aggravation of the European crisis and the forced stopping of business which has resulted in the entire world.”
To sum up—and from the acknowledgment of the Bank itself—as consequences produced by the European conflict, not only the law of the retrait of 1913 cannot be executed, but besides it is also impossible to procure funds.
There is evidently a very grave situation. But is it without issue? By no means.
The Republic of Haiti, which possesses on deposit in the vaults of the National Bank more than one and a half million dollars in gold coin and silver ingots, cannot be reduced to fold its arms and perish from hunger. The Republic of Haiti, which gave itself the trouble of founding a State Bank, confided to it the service of the Treasury and endowed it with the considerable privilege of the issue of notes, cannot but find the loyal cooperation of this Bank at the difficult hour where outside circumstances, that we have not created, bind painfully the nation.
It is by this same contract which binds the two parties that this cooperation is imposed upon it. In fact, by Articles 12 and 16 of the contract of the concession, the Bank has formally accepted the following obligations towards the Haitian State:
- 1.
- To give all its assistance for the elaboration of a law relative to the plan of the monetary reform.
- 2.
- To give all its assistance for the application of this law.
- 3.
- To lend its ass stance for the establishment of a budgetary convention.
It is this triple assistance that the Government, in the face of present difficulties which result from a case of force majeure, comes today to claim from the Bank.
To a new situation must correspond new measures. The retrait can no longer be made as has been foreseen; it is necessary to seek another system. The budgetary convention can no longer rely upon exterior funds; it is necessary to find others.
And if it is possible, from a double point of view, to imagine between the State and the Bank a new understanding which may conciliate the parties in the limits of justice to the dignity and respective interest honestly understood, the Bank would have absolute obligation, moral and contractual at the same time, to accept fully. Now, this is possible.
The Secretary of State for Finance has been authorized to present to the Bank the basis of a similar agreement. In case this State institution refuses it its adhesion, it will be definitely and manifestly established that it intends, by a plan of which the future would reveal the purpose, to drive us to the only resource that remains to meet urgent necessities as much of the public administration as of the Haitian people—to the emission of paper money, an emission for which full justification will appear from thence evident.