File No. 711.38/27.

The Secretary of State to Chargé Davis.

[Telegram.]

Your August 30, 10 p.m. Department has taken careful note of Haitian opinion regarding modified treaty Haitians would agree to sign, and that they are willing to give control, but not administration, of customs, provided the proposed control does not infringe upon existing bank concessions.

This Department, desiring to evidence consideration for contracts which the Haitian Government had made with the National Bank of Haiti, made perfectly clear to the president and manager of the latter and to the French Ambassador that it would probably become necessary for this Government to take charge of the principal Haitian customhouses, so that the proceeds therefrom might be used temporarily to provide sustenance for starving natives; to bring in marauders, who constitute a public menace; to undertake such temporary sanitation and public works as would be necessary to relieve the urgent need for employment; and to cause those engaged in factional strife to lay down their arms. They were informed that Admiral Caperton would be instructed accordingly and that it is the desire of the American Government that such discretionary use of the funds be ended at the earliest possible moment and that at the opportune moment this Government will, by the exchange of notes with the French Government, make clear its intention with respect to the terms of the agreement between the Republic of Haiti and the National Bank of Haiti, in the interpretation of which it is thought that the French and the American Governments can so agree as to avoid any conflict whatsoever with the convention which this Government now presents to the Republic of Haiti for ratification.

All the above, fully understood by the French interests and by the French Ambassador, brought forth from the president of the Bank the expression that,

In case the United States deems it proper to extend its action to all the other customhouses in Haiti, in order that the money may be fully collected and deposited with the desired regularity, the Bank will be quite willing to carry, in a special account, according to the desires of the United States Government, the funds received from this source.

Therefore, from the above the Republic of Haiti may clearly see that no obstacle prevents its full acceptance of the clauses of the convention that relate to the customs. In the administration of the customs control the United States naturally desires to make use of as [Page 441]many competent Haitians as show themselves to be patriotic and desirous of respecting the spirit of the convention.

In connection with the financial control the Department’s recent action in connection with Mole St. Nicholas shows clearly its desire to respect the Constitution and sovereignty of Haiti. There will be, however, no reasonable prospect of relief to the Haitian people or of the rehabilitation of Haitian finances if the funds from customs are to be left as a possible invitation to some ambitious revolutionist to overturn the Government and to reproduce the recent wanton acts, security from which the proposed convention is thought fully to provide. The Financial Adviser will be an officer attached to the Ministry of Finance, of whose recommendations the Minister will be expected to avail himself, which will not affect his constitutional prerogatives.

The Department has no objection to changing the form of Article 13, provided the precise spirit of the language expressed therein is conveyed in other phraseology more pleasing to the Haitians.

If the Haitians object to the renewal clause, Article 15 may read,

The present treaty shall remain in force until the payment or retirement of any and all bonds which have been issued by the Republic of Haiti or which may be issued during the next twenty years.

The United States, compelled by the appalling conditions in Haiti to undertake the establishment of peace in the Republic, is fully convinced that the proposed convention is necessary to make peace permanent and to give Haiti a new basis of credit.

The next concern of the United States is to see prosperity throughout the Republic. Haiti should appreciate that means for economic and industrial development cannot come from within and that foreign capital must be sought and secured, and this cannot be expected unless there is reasonable assurance against internal dissensions. Therefore the period during which peace in Haiti is assured will measure the extent to which foreigners may be expected to invest in the country. Not until the proposed convention is ratified and those in authority manifest a disposition to pursue a progressive policy for the development of Haiti, can foreign capital be expected.

Since submitting the convention it has developed that Haiti cannot be expected to repay an adequate loan within ten years, and a short term for the life of the convention will be disadvantageous to Haiti, in whose interests this Government would prefer to see the proposed convention continue until it had served its full usefulness.

There remains now therefore to be discussed the phrasing of Article 13 and the life of the convention. In all other respects the Department must insist that the treaty stand substantially as submitted. There should be no apprehension that the United States will abandon those who may be instrumental in adopting or carrying out the plan proposed.

The Department approves your action in not making use of its August 28, 8 p.m.,8 which was intended for your information and guidance only.

Lansing.
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