838.51/1019: Telegram

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

90. Department’s 100, November 12 noon.99 Department’s Nov[ember] 1, 7 p.m. submitted to President Saturday, sixth. President [Page 849] expressed himself pleased at decision regarding internal debt and favorable to proposition which he stated he would lay as soon as received before the Council of Secretaries of State. Yesterday evening Minister of Foreign Affairs handed me in person the reply of the Haitian Government in the form of a counter proposition which in substance is as follows:

The Haitian Government suggests a short term loan for $11,000,000 at a rate of 95 bearing 7½ [per cent] interest and guaranteed by a bond issue of [$] 13,750,000 bearing 6 per cent interest to cover the following: exterior debt $6,250,984, bank note principal and two years interest $1,949,799.10, PCS Railway $35,000, National Railroad $1,417,500, total $9,653,283[.10]; proceeds of short term $11,000,000 loan at 95, $10,450,000; balance of $796,716.90 to be applied to the awards of the Claims Commission and urgent improvements. The Government is opposed in principle to the exteriorisation of the interior debt the consolidation of which as well as of the floating debt and of certain other claims forming the global sum of $5[,0]75,470.20 to take place in Haiti under conditions to be later determined between the Government and the interested holders. The Government’s contention is that it is not an economical policy to borrow at an effective interest of 7.895 per cent or 7.9 per cent to consolidate an interior debt bearing between 4 and 6 per cent interest and suggests that this consolidation might be effected in Haiti by bonds bearing 4 to 6 per cent interest to be amortized in 30 or 40 years and intended for the reimbursement at par of the loans of six and six two[-thirds] per cent interest and the floating debt. The amortization to be made by purchase of bonds when under par and by drawings when at par or above.

Finally the Haitian Government suggests that the Department of State might order the payment of the arrear interests of the interior loans of 1912, 1913, 1914, series ABC amounting to $733,600.55 [$733,680.55?] out of the available Government funds.

Blanchard
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