File No. 838.516/64.

Minister Blanchard to the Secretary of State.

No. 29.]

Sir: In compliance with the Department’s cable instructions of December 31,17 received January 2, regarding interference by the Haitian Government in the affairs of the National Bank of Haiti, [Page 503]this Legation addressed under date of January 5, 1915, a note to the Foreign Office, copy of which is herewith enclosed, together with copy and translation of the note, dated January 12, received in reply.

As you will observe, the Minister of Foreign Relations states that just previous to the time of the receipt of the above-mentioned note from this Legation, the Haitian Government, by reason of its sincere desire to arrive at a final conciliation with the Bank, had suspended all prosecutions against it; and through the good offices of the Department of State had exchanged propositions of agreement.

After enumerating the several points of this Legation’s note of January 5 and before answering the same, the Minister of Foreign Relations declares his reply to be made under the express reserves of the declarations relative to Articles 3 and 24 of the contract of the Bank, made in preceding notes, which articles, as the Department is aware, are the two which establish the identity of the Bank as a French corporation and prohibit all diplomatic intervention.

It will be further observed that after setting forth the functions and identity of the Bank, the Minister of Foreign Relations declares that since certain obligations to the Haitian Government have been created both by its contract and by the laws of Haiti, the Bank for any infraction thereof is amenable to all legal means capable of compelling it to comply with the terms of its contract of concession.

The Minister of Foreign Relations further states that the Government has never intended, and does not intend, “to interfere with the Bank”, and only asks to live in harmony with its Treasury; but that if in the course of proceedings begun, or to be begun, for any violation of the penal code, the Bank, with a view to escaping the consequences of its acts, should close its doors, the Haitian Government will be guided in its action by the terms of the contract binding the parties and by the civil code of Haiti which, being the same as that of France, is consequently the civil code of the Bank, a French corporation.

Regarding that portion of this Legation’s note relative to “the arbitrary conduct of the authorities with regard to foreign interests”, the Minister of Foreign Relations states that he regrets that no specific charge was mentioned, and adds that foreign interests in Haiti are represented by seven legations and a large number of consulates, from none of which has a complaint been received.

On the day after the delivery of the above protest at the Foreign Office, Mr. Williams, the acting manager of the Bank, called at this Legation and stated that there was a very marked change in the attitude of the Government officials toward the Bank; and further stated that every facility had been afforded him to have the money in the different branch offices of the Bank, situated at different towns around the coast, brought to the Bank here at Port au Prince, a measure which he deemed absolutely necessary to enable the Bank to meet the demands for cash which its ordinary transactions required.

Up to the time of this writing the Government has continued in this attitude, and has done nothing further to hinder the operations of the Bank.

I have [etc.]

A. Bailly-Blanciiard.
[Page 504]
[Inclosure 1.]

Minister Blanchard to the Minister for Foreign Affairs.

memorandum.

In pursuance of instructions from the Department of State, the Legation of the United States protests against any interference with the Bank of Haiti in view of the fact that it is owned and operated by Americans and other foreigners.

In case the Bank is forced to close and cease operations by the present Haitian Government, the Government of the United States will not recognize any forfeiture of the charter of the Bank resulting from such forced closure.

The Legation is further instructed to add that the United States Government is deeply concerned over the reports which have reached it as to the arbitrary conduct of the authorities in dealing with foreign interests in the Republic.

[Inclosure 2–—Translation.]

The Minister for Foreign Affairs to Minister Blanchard.

Mr. Minister: Through the good offices of the Department of State, propositions of agreement have for some days been exchanged between the Haitian Government and the National Bank of the Republic of Haiti. In its sincere desire to facilitate this agreement, in its clear wish to come to a final conciliation of mutual interests, the Government has suspended all prosecution against the Bank and withholds the acts which it was about to notify to this State’s Treasury both in view of the arbitration provided for by the contract and by reason of the charges of guilt raised against it. And it is just at this moment, when it seems that the conflict created by the illegal attitude of the Bank seems to be calmed, that the Legation of the United States, upon instructions of the Department of State, communicated to my Department a memorandum dated January 5th and forwarded to my office on the 7th, which comprises:

1.
A protest against any interference with the Bank of Haiti.
2.
The declaration that “if the Bank is forced to close and cease operations by the present Haitian Government, the Government of the United States will not recognize any forfeiture of the charter of the Bank resulting from such forced closure.”
3.
The advice that reports have reached the Government of the United States relative to “the arbitrary conduct of the authorities in dealing with foreign interests in the Republic.”

It is, Mr. Minister, under the express reserves of the declarations made in my preceding notes relative to Articles 3 and 24 of the contract of concession of the Bank, that I today reply to the memorandum of January 5.

The National Bank of the Republic of Haiti is bound to the Haitian State by a formal contract which charges it with the service of the Treasury, with the collection of our revenues, with the execution of our budgets, which gives it the formal quality of a functionary responsible for the public moneys, dependent, consequently, upon the Government of the Republic. Hence there exist between this Government and the Bank necessary, obligatory, indispensable relations created as much by the contract itself and natural consequences, as by the laws of the Republic.

Each time that the Bank of Haiti violates the texts which regulate these relations, as it violated them when it refused the Government the assistance which it had pledged itself to furnish it in return for considerable privileges which have been accorded it; each time it violates, as it did on December 17 last in withdrawing and exporting the funds of the Haitian Treasury, the penal law which protects the State against the infidelity of its accountants and depositaries of public moneys; each time it refuses obedience to legislative measures which dispose of the amounts belonging not at all to the cash of a private bank, but to the cash of the National Treasury—under all these circumstances, [Page 505]the Haitian Government will have the right and the duty to employ against it all legal means to compel it to respect its contract and the laws of the nation.

The Government has never intended and by no means does it intend “to interfere with the Bank”; but it will not tolerate that the Bank, on its side, interfere with the rights and interests of the State. It only asks to live in perfect harmony with its Treasury; it claims from it but one thing; i. e., that it execute loyally its obligations towards the Republic.

If in the course of the just prosecutions which have been commenced or which may tomorrow be exercised against it or its responsible agents—whether for the violations of its obligations, for the criminal act of December 17, or any other infraction of the penal law—the Bank, with a view to escaping from the consequence of the eventual condemnations, thinks that it may close its doors and cease operations, the Haitian Government, to determine its attitude towards it, will be guided by the terms of the contract which bind the two parties and the dispositions of the Civil Code of Haiti which is none other than the Civil Code of France and consequently the civil code of the Bank, a French company.

In that which concerns the reports which have reached the Government Of the United States “as to the arbitrary conduct of the authorities in dealing with foreign interests in the Republic,” the Department of Foreign Affairs can not but regret that, on a question of such great importance, the memorandum of January 5 did not mention anything precise and confined itself to a vague incrimination.

Foreign interests are represented in Haiti by seven legations and by a large number of consulates. Yet from not one of these various representatives, and not even from the American Legation, has the Department of Foreign Affairs received a complaint against the Haitian authorities. This is a fact absolutely conclusive, which can not fail to attract the attention of the Government at Washington, the vigilant guardian of American interests.

I beg [etc.]

Louis Borno.