838.51/1035: Telegram
The Minister in Haiti ( Bailly-Blanchard ) to the Acting Secretary of State
[Received December 9—9:30 a.m.]
100. Department’s 108 November 19 [29], 7 p.m. complied with December 2 in an interview with the President. I handed him a verbatim memorandum3 of Department’s instruction and I impressed upon him the urgency of forwarding formal authorization to Financial Adviser for the floating of the loan. The President stated that he would immediately place the matter before the Cabinet and that I would receive a reply as soon as possible thereafter. The reply dated December 4th was delivered yesterday and is as follows (translation):
“According to the instructions of the Haitian Government the Secretary of State for Foreign Relations in reply to the memorandum relative to a loan handed to the President of the Republic December 1, by His Excellency the Minister of the United States, has the honor to inform him of the satisfaction which the Haitian Government feels in seeing the Department of State of the United States agree to the various propositions contained in its memorandum of 22 November,4 notably the study to be made of a new protocol to replace that of October 3rd 1919.
In regard to the 3rd paragraph of the memorandum of December 1st where is said that while the Department of State hopes that the American banks will accept the loan with the propositions of the Haitian Government contained in its memorandum of November 22nd it is not at all certain that the issue of $13,750,000 of authorized bonds will be considered a sufficient guaranty, the Haitian Government persists in believing that these $13,750,000 of 6 per cent bonds destined to guarantee the reimbursement of the loan of $11,000,000 at 7½ per cent, will be sufficient, granted that, as it has been established in the explanatory note attached to the memorandum of [Page 853] November 22nd, this capital of $13,750,000 shall guarantee an amount of interest equivalent to that of the loan of $11,000,000 at 7½ Per cent and which shall have been paid during the first [five] following year[s]. If the Haitian Government accepted the issue of a loan at 6 per cent greater than the amount of $13,750,000 which it proposes it would thereby grant an unjustified advantage to the lending bankers, an advantage for which the Haitian people would demand a reckoning from their Government.
The Haitian Government is the more persuaded that its just and equitable proposition will be agreed to by the American banks because the Department of State has been good enough to inform it that it would make known to the bankers what an interest it attached to the success of this loan and because the Financial Adviser who will be charged with the operations will have the entire support of the Government of the United States.
When, as it earnestly hopes, the issue of the $13,750,000 will have been recognized as sufficient, the Haitian Government will hasten to give with its full approbation of the operation of the loan the official authorization to contract in its name.
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