The Minister in Panama (Price) to the Acting Secretary of State
[Received 9.45 p.m.]
“Department’s number 244, of January 6, 191935 received by me February 20th. The condition of the Haitien finances in September [Page 341]1915, when taken in charge by American naval authorities, was such as to render it impossible to provide for the absolutely necessary expenses of Government and at the same time meet the fixed charges on the public debt. For example, the interest and amortization on the three loans, which are the subject of the note from the French Ambassador,37 alone amounted to francs 8,517,500 annually while other loans and contracts similarly guaranteed by the allocation of specific revenue brought the total of such allocations to approximately 75 per cent of the entire revenue of the Government. To end this situation, the Haitian Government early in 1917 requested the good offices of the Government of the United States to assist it in securing a loan of $30,000,000 with which to refund its existing debt and negotiations were commenced in Washington, D.C. with the French Government with the view of ascertaining the terms on which the Haitian bonds held by French nationals might be repurchased. These negotiations were progressing favorably until the entry of the United States into the war compelled the bankers who were considering the loans to defer their participations therein. Again in 1918 an effort was made by the undersigned on behalf of the Haitian Government to secure the loan necessary to adjust the debt of Haiti, but conditions then existing prevented the matter being brought to a successful termination.
For the three years subsequent to September 1915 the finances of Haiti have been very adversely affected by conditions due to the war, the lack of adequate shipping facilities, and the embargo placed by the French Government on importations of coffee caused a large curtailment in coffee shipments which yield three cents gold per pound to the Haitian treasury so that notwithstanding economies effected in public services, the income has been insufficient after defraying necessary expenses of operation to meet the heavy charges entailed by the public debt. However, there has been realized a fund of more than $1,000,000 which is held by the General Receiver of Customs for the debt. Adjustment, since October 1918, of revenues of Haiti have shown a most gratifying increase due principally [to] the success of arrangements effected for the movement of the coffee and in view of the termination of the war a continued improvement may be anticipated. Thus it would appear possible at a near date to effect an adjustment of the Haitian debt preferably by negotiating a refunding loan or failing in this by resuming payments on account of existing loans.
In respect to the National Bank of Haiti, negotiations conducted in January last between Minister of Finance of Haitian Government and manager of the bank resulted in a tentative basis of agreement [Page 342]being reached which manager of bank cabled to Paris with recommendation that he be authorized to sign on behalf of bank. At the time of my leaving Haiti no reply had been received but if manager’s recommendation is accepted by his board of directors no obstacle to a settlement of all differences between bank and Government is apparent. The demand upon the bank for $500,000 referred to in the note of French Ambassador was without my knowledge or approval and I assume was during the period that Minister Borno held the portfolio of finance. Ruan.”