838.51/771

The Acting Secretary of State to the Minister in Haiti (Bailly-Blanchard)

No. 247

Sir: The Department acknowledges receipt of your despatch of December 7, 1918,60 wherewith you transmitted a letter addressed to the Secretary of State by the Financial Adviser of the Haitian Government in respect to questions arising between that Government and the Compagnie Haitienne de Construction from the completion of the paving contract of the Company.

It appears from the letter of the Financial Adviser that, of the bonds issued to the Company for account of the Haitian Government under the terms of the contract of October 24, 1912, series C, amounting to $40,100, dated May 1, 1916, and series D, amounting to $64,700, dated November 1, 1916, both of which series represented payment for work done during the period from January 1st to October 31, 1916, were issued, without agreement with the President of the United States.

The Financial Adviser, therefore, recommends that the Department sanction, on behalf of the President of the United States, the issuance by the Haitian Government of bonds to the amount of $124,000, of which amount $104,800 would replace the said series C and D, and $19,200 would be issued to cover work completed and accepted during the period from November 1, 1917 to November 1, 1918.

After consideration of this matter, the Department is of the opinion that, in view of the Financial Adviser’s statement concerning the status of bonds of series C and series D and concerning the performance by the Construction Company of the work which it obligated itself to do by the contract of October 24, 1912, the Company is entitled to receive from the Government of Haiti bonds to the amount of $124,000. Therefore, you are authorized and directed to state to the appropriate authorities of the Haitian Government that the Government of the United States approves the issuance by the present Government of Haiti to the Compagnie Haitienne de Construction of six per cent, bonds in the amount of $124,000, of which amount $104,800 shall be issued to replace series C and D now outstanding, and $19,200 shall be issued in liquidation of the [Page 372]indebtedness due from the Haitian Government to the Company up to and including November 1, 1918.

If the Government of Haiti by its appropriate authorities shall signify to the Government of the United States its willingness and desire to issue the bonds in question, such indication, taken in connection with the concurrence of this Government to such action as expressed herein, may, it is believed, be taken to constitute the “agreement with the President of the United States “required by Article VIII of the treaty of September 16, 1915, between the United States and Haiti, as a condition precedent to an increase in the public debt of Haiti for the purpose and in the manner set forth.

In his said letter, the Financial Adviser expresses the opinion that to pay interest and amortization on bonds of series A and B as requested by Mr. Marsh, representing the Compagnie Haitienne de Construction, would constitute exceptional and preferential treatment not at this time accorded other creditors of the Government holding obligations of the same class and which it is impossible to extend to all creditors at present.

With respect to the last mentioned matter, the Department after careful consideration has reached the conclusion that the Government of Haiti would be justified in continuing its monthly payments to the Company for interest and amortization on bonds in accordance with the contract, and that such a course would not constitute preferential treatment to which any other creditor of Haiti could justly object, but would merely amount to the continued performance by the Government of Haiti of its obligations under the contract which has apparently been carried out up to the present time by both parties thereto so far as concerns its immediate obligations.

Please inform the Financial Adviser of the foregoing.

I am [etc.]

For the Acting Secretary of State:
Alvey A. Adee
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