File No. 838.516/80.

Minister Blanchard to the Secretary of State.

No. 33.]

Sir: Referring to the Department’s cable of January 26, 6 p.m., and my February 1, with reference to the removal of the funds from the Bank, I have the honor to report that on the 23rd of January the Foreign Office addressed a note to the Legation, a copy and translation of which is herewith enclosed, stating that on the 15th of January Mr. Williams, director ad interim of the Bank, had forwarded a letter to the juge d’instruction stating that contrary to what Mr. Desrue had declared there was no longer any portion of the retrait fund at the Bank, and further that the funds under seal there belonged to the Bank. In presence of this attitude of the Bank the Haitian Government had determined that justice should follow its course.

I acknowledged receipt of this note and contented myself with saying that the matter would be brought to the attention of the Department, as I did not consider that the Legation should intervene in a difference between the Haitian Government and its Treasury.

Upon investigation it was ascertained that the director of the Bank, Mr. Williams, had, as stated on the 15th of January, addressed a letter to the juge d’instruction which, up to my enquiry, I had neither seen nor been apprized of. In the letter Mr. Williams states that Mr. Desrue, the former director of the Bank, could only make suppositions as to the identity of the funds at the Bank but that subsequent to the time of Mr. Desrue’s declaration to the juge d’instruction a telegram had been received from, the New York office of the Bank,” stating that the funds of the retrait were fully and well conserved by the council of administration. In this letter he requests that the seals be lifted from the funds in the Bank’s vaults since they were the private property of the Bank and of private individuals.

Whereupon the Haitian judicial authorities called at the Bank to execute a judicial order which provided for the lifting of the seals of the funds in question but which also contemplated the removal of these funds to another banking house to be placed there under seal. This latter part of the order Mr. Williams reported was not read to him, and it was only on his demand to see the order that he became acquainted with its full contents.

Meanwhile, Mr. Williams had locked his safe and after reading the order refused to allow it to be executed in any particular, and upon advice of the counsel of the Bank declined to sign the procès verbal of the proceedings.

Mr. Williams at once reported to the Legation the above and stated that in his opinion based on all that he had heard with regard to the matter, the Haitian Government would attempt to remove the funds by means of force. He said that in such case it would take at the shortest five or six days to break open the vault. I advised him to let the Government use force effectively inasmuch as the time which would necessarily be required to force open the safe would enable the Legation to take necessary steps to prevent any actual removal of the Bank funds by force.

[Page 508]

This attempted removal was reported by Mr. Williams in a telegram which passed through this Legation and the Department.

On receipt of the Department’s January 26, 6 p.m., I reported, complied verbally with the instructions therein contained and at the request of the Minister of Foreign Affairs, corroborated the same in a note.

On February 3 the Minister of Foreign Affairs replied and stated that the Haitian Government had never had the intention of using forcible means to remove the amounts under seal at the Bank. Copy of this note is enclosed.

As you will observe in the note from the Foreign Office above referred to, the Minister states that his Department does not intend to renounce its contractual right already affirmed to reject diplomatic intervention, and is ready to submit to arbitration as provided for by the contract of the Bank all differences raised between the parties.

He further states that the Haitian Government in the presence of a profound and general emotion produced by the open hostility, by the unheard-of conduct of the Bank, sees itself constrained to submit to the country, without delay, all the documents, diplomatic or otherwise, which bear on the subject.

This announcement was rendered immediately effective by the publication in Le Moniteur of this note and also of the note dated January 12, 1915, which was enclosed in my No. 29 of January 15, 1915, an unheard-of proceeding and contrary to all diplomatic usage but one which the Haitian Government has of late made constant use of. A communication addressed to the French Minister with reference to the Bank was also published in the same issue.

I have [etc.,]

A. Bailly-Blanchard.
[Inclosure 1—Translation.]

The Minister for Foreign Affairs to Minister Blanchard.

Mr. Minister: The National Bank of the Republic of Haiti has exceeded all bounds. It was not enough to have, disregarding the express terms of its contract, refused all assistance to the Government; to have, on December 17 last, taken from the Public Treasury the sum of $500,000; and finally, to have lured the Government with vain promises of agreement with the sole idea of gaining time, thus further to starve the impoverished people and to augment the embarrassments of the administration. It now makes known to the juge d’instruction, through a letter dated January 15 signed by Mr. Williams, that contrary to the formal declarations of its director, Mr. H. Desrue, there no longer remains in the Public Treasury one single centime of the sum of about $1,000,000 which had been deposited for the service of the withdrawal of the paper money in circulation. It clearly admits, therefore, that this considerable sum, which belongs not to its private funds but to the distinct funds of the National Treasury, has been removed in toto and exported to a foreign country. This removal has been perpetrated secretly, unknown to the Government, in contravention to the rights of the State, in violation of the penal law and the contract which binds the two parties.

But this does not appear to have been sufficient. It dares to pretend that the value which, on the word of its director Desrue, has recently been put under seal as funds of the State, a value which its director himself has represented to the juge d’instruction as a part of the funds of the retrait, is the private property [Page 509]of the National Bank! The vault of the Public Treasury would therefore be empty! The funds deposited in this vault as guaranties of public contracts and special functions, the sums of which the presence in this safe is established by the two laws of the 18th and 23rd of December last and by other official documents, all these sums would therefore have vanished.

An attitude so violent on the part of the Bank does not permit the Government to remain for a longer time inactive. Before the admitted criminal act of the complete taking of the funds of the retrait and in the presence of the disguised menace to seize (accaparer) the funds of the State recognized as such by Director Desrue, a measure imposes itself, that of safeguarding the funds of the Republic by taking them from a dishonest Treasury, unworthy of the confidence of the country. The Government could not hesitate. Respectful of the law, it has requested justice to act.

In bringing these facts to your knowledge, the Department of Foreign Relations does not intend to renounce its contractual right, already several times affirmed, to reject diplomatic intervention. It intends simply to fulfill a duty of courtesy towards your Government in declaring its firm determination to submit to arbitration, provided for by the contract with the Bank, all the differences raised by the parties.

Moreover, I advise your excellency that the Haitian Government, in the presence of a profound and general emotion produced by the open hostility, by the unheard-of conduct of the National Bank, sees itself constrained to submit to the country, without delay, all the documents, diplomatic and otherwise, which bear on the subject.

It is of importance to the Republic that the public be informed. It is of the highest importance that it be known that this country, which scrupulously pays its exterior debt, is not, as an interested press pretends, a country in bankruptcy; that the financial difficulties of the present situation arise primarily from the European war and that the campaign of calumnies carried on against us by certain subsidized or deceived newspapers, is the odious work of the bankers without conscience, without honor, whose principal object is to injure our national independence.

To defeat this maneuver the Government of the Republic firmly counts upon the cooperation of your Legation and upon the cooperation of your Government fully and loyally informed.

I beg [etc.]

Louis Borno.
[Inclosure 2—Translation.]

The Minister for Foreign Affairs to Minister Blanchard.

Mr. Minister: By a note dated January 29 last,8 the Legation of the United States notifies my Department that

the American Minister has been instructed to say that the Government of the United States cannot consent to the removal of funds belonging to the Bank without which it is impossible for it to live up to its contractual obligations, and to advise the Haitian Government that any attempt to remove the funds of the Bank will compel him to consider means of preventing any such violation of the rights of foreign stockholders.

This note is the exact repetition of the verbal statement which your excellency had made to me the same day, of which I had had the honor to request of you written confirmation.

It referred to the amounts placed under seal on December 28, 1914, by the juge d’instruction by virtue of the affirmation by the Bank itself that the said amounts belong to the Haitian Treasury as representing a portion of the funds of the retrait. The Bank had affirmed at the same time, by word of mouth and over the signature of its director, that there was held in addition, in its branches, the sum of $221,180 belonging to the same fund of the retrait, i. e., to the Haitian State. The Bank, in defiance of all these affirmations, later believed it had discovered that the amounts belonged to its private funds and, so that they might be used, demanded the lifting of the seals; the Haitian Government, which affirms and has irrefutable reasons to affirm its right of [Page 510]ownership of the funds, hastened to approve of lifting the seals, but demanded that the amount seized be deposited in the hands of third parties instead of being in possession of the Treasury, whose conduct had removed all right to the confidence of the State. The Bank refused to allow the lifting of the seals.

The amount seized is therefore up to this hour on deposit at the National Bank, where the Government has never had intention to go to take it by violence.

When a judicial decision, regularly obtained, shall have recognized the evident rights of the State, the National Bank, then brought back, it is hoped, to the normal conviction as to its duties and to a more just appreciation of its interests, will voluntarily submit itself thereto and thus avoid the forcible execution which the law sanctions in every country.

I have [etc.],

Louis Borno.
  1. Not printed.