838.516/119
Memorandum of the Office of the Foreign Trade
Adviser, Department of State
[Washington,] February 4, 1920.
A conference was held in the Latin American Division of the
Department of State on February 3, 1920, to discuss modifications
which should be made in the present concession of the National Bank
of Haiti in the event that the stock and the assets of this Bank
should be purchased by the National City Bank of New York.
There were present Mr. Lay, Acting Foreign Trade Adviser of the
Department of State, Dr. Rowe, Chief of the Division of Latin
American Affairs, Mr. McIlhenny, Financial Adviser to Haiti, Mr.
John H. Allen, Vice President of the National City Bank of New York,
and Mr. Dunn and Mr. Munro of the Department of State.
At this conference it was agreed that the following modifications
should be made in order that the proposed transactions might meet
with the approval of the Department of State and of the Haitian
Government.
[Annex]
Modifications to be Made in the Concession
to the National Bank of Haiti52
- I.
- The Commissions collected by the National Bank for the
treasury service, as provided in Article 17 of the
Concession and Article 4 of the Agreement of July 10, 1916,
shall be abolished.
- II.
- In lieu of these commissions, the Bank shall receive
payment on account of the treasury service at the following
rate: When the total receipts of the Government in a given
fiscal year amount to six million dollars, the Bank shall
receive a commission of sixty-eight thousand dollars. For
each additional one million dollars of the Government’s
income the bank shall receive an additional ten thousand
dollars, and when the income of the Government is less than
six million dollars, the commission received by the Bank
shall be decreased at the rate of ten thousand dollars for
each million dollars by which the Government’s income is
less than six million dollars. In no fiscal year, however,
shall the payment to the Bank on account of the treasury
service exceed the sum of one hundred thousand
dollars.
- III.
- The National Bank of Haiti agrees to allow the Government
interest on its credit balances, whether in gold or in
gourdes, at the current rate allowed by said Bank on demand
deposits. Should it happen at any time that the Bank is
unable to allow interest on gold deposits, it shall transfer
the funds to New York, allowing interest thereon at the rate
allowed by the National City Bank of New York for foreign
demand deposits. The cost of transferring the gold to and
from New York, if any, shall be for the account of the
Government.
- IV.
- When the Government shall decide to issue through the Bank
new fractional currency, as provided in Article 12 of the
Concession, the profits arising from the coinage of this
currency shall be credited to the Government by the Bank.
These profits shall be deposited with the Bank in a reserve
fund in legal tender money of the United States of America,
to be held in the vaults of the Bank, and to be used only
for the purpose of redeeming the fractional currency of the
new issue in American money on demand. This fund shall at
all times be equal to thirty-three and one third per cent of
the total amount of fractional currency of the new issue in
circulation, and the Government shall make such additions to
the fund from time to time as may be necessary to maintain
this proportion. If the profits arising from the coinage of
the fractional currency should increase this fund to more
than thirty-three and one third per cent of the amount of
fractional currency of the new
[Page 818]
issue in circulation, the excess shall
continue to form part of the reserve fund: but it may be
used by the Bank like other deposits of Government funds and
the Bank shall pay interest to the Government upon this
excess as upon other Government deposits. If the profits
from the coinage of fractional currency should increase the
reserve fund to more than fifty per cent of the total amount
of fractional currency of the new issue in circulation, the
amount by which the reserve fund exceeds fifty per cent of
the total amount of fractional currency of the new issue in
circulation shall be paid by the Bank to the Government and
may be used by the Government for other purposes.
- V.
- The Bank shall at all times exchange its own notes for
fractional currency of the new issue and the new fractional
currency for its own notes on demand when presented in
amounts of not less than fifty gourdes and not more than one
thousand gourdes.
- VI.
- The Bank shall at no time invest a sum larger than its
paid-up capital stock and surplus in mortgages or in loans
having a longer maturity than nine months.
- VII.
- The Financial Adviser shall at all times have the right to
inspect all of the operations of the Bank and to call for
such reports from the Bank as he may deem necessary.
- VIII.
- If the stock of the National Bank of Haiti should at any
time be sold by the National City Bank, the National City
Bank agrees that the Government of Haiti shall have a
preferential right to purchase the stock of the National
Bank of Haiti at the same price which may be offered by any
other bona fide purchaser.
- IX.
- The above provisions supercede all contrary provisions in
the contract, and it is understood that the prohibitions of
Article 13 of the contract relating to the issue by the
Government of fiduciary and nickel money shall not apply to
fractional currency issued in accordance with the provisions
herein contained.
ad
referendumJohn A.
McIlhenny
Financial
Advisorad referendumJulius G. Lay
Acting Foreign Trade Advisor
