The Financial Adviser of Haiti ( Ruan ) to the Chief of the Division of Latin American Affairs of the Department of State ( Stabler )
[Received April 12.]
Dear Stabler: As indicated in the cablegram sent the Department by the Legation some ten days ago46 our need for currency here is acute. In the first place, the old gourdes of the Government have become so worn and torn as to be largely unfit for circulation, and in the second place, the very marked improvement in our agricultural conditions and the export of corn to Cuba and prospective export of cotton to the United States demand an increase in the circulation heretofore required.
I enclose draft of proposed agreement between the Government and the Banque Nationale de la Republique d’Haiti,47 which is the [Page 353] result of many conferences with Mr. Santallier, representing the Bank, and which, I think, will be acceptable to him. It is acceptable to the Minister of Finance and, to my mind, offers a fair solution of the controversies heretofore existing between the Government and the Bank.
The concession of the Bank gives it the exclusive privilege of issuing notes redeemable in specie, and by the terms of that concession the Government is estopped from issuing further notes of its own. The Bank, by the terms of the proposed agreement, would waive several rights derived from its concession, and further concedes to the Government certain privileges which the concession does not call for. For instance, Article 8 provides an adequate reserve against the notes of the Bank, which the original concession did not do. Article 9 provides that the notes of the Bank shall be a first and preferred lien on all assets of the Bank, which provision was not made in the original contract. Article 10 limits the note circulation to three times the paid in and unimpaired capital of the Bank, whereas the Bank originally was granted the right to issue notes to the maximum of six times its present paid in capital. Article 12 provides that the Bank shall pay a tax of 1% on its circulation in excess of 10,000,000. gourdes, which means a revenue of $20,000. annually to the Government, on a circulation of 20,000,000. gourdes, and a further $20,000. on each additional 10,000,000. gourdes. Further the Bank agrees that the Government shall participate equally with it in the profits that may accrue by reason of notes of the Bank not being presented for redemption. The original concession made no provisions whatever for any participation by the Government in the benefits which the Bank will derive from its note issue privilege, nor for the payment of any tax by the Bank.
Mr. Santallier expects to sail for New York in the latter part of this month for the purpose of securing the approval of the executive committee of the Bank to the execution of this proposed agreement. Pending its approval by the Bank it will not be signed by the Government, so if there should be any reasons for its non-execution, a cablegram to this effect will reach me in due time.
The proposed agreement is much more favorable to the Government in all respects than the one which was approved by the Department’s cablegram of January 9 , 1917.48