The Haitian Secretary of State for Foreign
Affairs (
Barau
) to the American
Chargé (
Jordan
)
In the name of the Haitian Government, and in answer first, to the
note verbale dated December 5, 1921,8 by which
the Department [Page 473] of State
makes known that it has already considered with great care the
objection of the Haitian Government on the question of the lapse of
the protocol of October 3, 1919,9 and that it has arrived at the definite
conclusion that the nonperformance by the Haitian Government of its
undertakings does not relieve it of its obligation as long as the
other party opts in favor of the protocol;
Secondly, to the supplementary note handed to His Excellency the
President of the Republic on December 6,10 on the subject of the offer of a loan from
the bank of Messrs. Lee, Higginson & Co., of New York;
Thirdly, to the supplementary memorandum transmitted to the
Government through the intermediary of the Department of Foreign
Affairs December 6,11 concerning the modifications on the loan
propositions presented by the Speyer group and National City
Co.;
The Secretary of State for Foreign Affairs has the honor to declare
that the Haitian Government persists in believing that according to
law the protocol of October 3, 1919, has lapsed, but that the
difficulty can be solved by inserting in the loan law such clauses
as are approved by the Department of State in the note of December
6.
In this law, there shall be enacted the following provisions:
1. The Haitian Government takes the position that the member who is
to be appointed to the Claims Commission12 shall be named by the Government and not by the
Secretary of State for Finance.
2. With regard to the Claims Commission to be instituted by virtue of
the agreement made between the Department of State and the French
and English Governments,13 the Haitian Government proposes the
following provision:
It is, however, understood that during the period during
which the claims shall be examined, the third member,
instead of being designated by the Financial Adviser, may be
named by the government of the claimant, and each government
shall be charged with the payment of the referee named by
it.
Further, claimant governments reserve the absolute right to
submit to an arbitral tribunal composed of two members, one
named by the Haitian Government, the other by the claimant
government, and a third referee who shall be designated by
common agreement of the two Governments, all claims on which
the decision rendered by the Claims Commission may not be
satisfactory to them. The expenses of this tribunal of
appeal shall be paid in equal proportion by the two
interested Governments.
[Page 474]
3. Insofar as it is within the jurisdiction of the Commission to
pronounce on the debt due to the National Bank of the Republic of
Haiti, it shall be stated that the $600,000 statutory loan be
restored and held at the order of the Haitian Government;
4. As to the sum due as interest on the bonds of the National Railway
Co. of Haiti, it shall be stated that the Republic of Haiti reserves
the right to come to an agreement with the holders of the
obligations of the National Railway Co. in order to pay part in
cash, to be drawn from funds from the loan, and part in claims to be
amortized in proportion and to be added to the obligations already
subscribed. It shall be stated further that as to the sum due the
National Railway Co. for interest claims, the Commission shall not
be competent to pass upon it after its verification in accordance
with the contract and its acceptance by the Financial Adviser.
5. As to the sum due the National Company of the Plaine du
Cul-de-Sac, there is no occasion for a provision, as it is
purposeless, the sum of $35,000 gold having been paid to this end by
an extraordinary credit of December 24, 1920;
6. The following clause shall be inscribed by virtue of a memorandum
from the American Minister, November 6, 1920:14
It is understood that the bonds issued in 1912, 1913, and
1914, representing the internal consolidated debt of Haiti,
cannot be considered as pecuniary claims, but are debts
which have been liquidated and consequently must be paid
without the necessity of being submitted to the Claims
Commission.
The same applies to the debts of the Sambour Commission and the
Féquière Commission.15 The
internal debt and the recognized floating debt shall not be verified
anew; their payment shall be subject to an understanding between the
Haitian Government and its creditors.
The nonliquidated and unrejected credits shall be submitted to the
Claims Commission.
7. In regard to the payment of each recognized claim determined by
the Claims Commission, the following arrangement shall be made: The
proportion to be paid in cash shall not exceed one-half of the
award.
8. The amount of the loan must be changed. It must be stated that the
Republic of Haiti engages itself to contract, in accord with the
Financial Adviser, a national loan which shall not exceed
$16,000,000 in nominal bonds payable in 30 years by annual drawings
at par or through purchase on the market below par.
The reasonable time for notice of withdrawal is to be fixed at 3
months, and likewise for the redemption of the loan the term of 15
years must be changed to 10 years.
[Page 475]
9. Holders of the bonds of the loans of 1896 and 1910 not being
obliged to accept bonds in exchange for their claims, it must be
stated that the bonds of the loans of 1896 and 1910 will be redeemed
in accordance with the contract of issue of these said loans (the
total sum owing to be held at their disposal in francs converted at
the most favorable rate by the Haitian Government). The same is to
apply to all the categories of debts to be settled out of the funds
of the loan; they must be paid in American gold unless the parties
consent expressly to settle their claims in part or in whole with
bonds of the loan.
10. It must be stated that all sums not employed after the settlement
of the debts and claims shall be applied to public works, to
agriculture, and to public instruction.
11. The Haitian Government insists that it be clearly understood that
the payment of the interest and amortization of this loan shall be
guaranteed by a monthly levy of one-twelfth of each yearly
installment on the first receipts of import duties of every month,
up to the aforesaid twelfth.
This levy shall be under the control of the General Receiver of
Customs established by the convention of September 15 [16], 1915,16 to the extent
and during the life of the convention; after the expiration of the
convention the sum above mentioned, to be levied from the first
monthly receipts of import duties, shall be kept for the account of
the rightful creditor by the National Bank of the Republic of Haiti
performing the duties of the Treasury, or by any other establishment
performing this service if the contract of the National Bank of the
Republic of Haiti comes to an end before this time.
12. The sums allotted to the members of the Commission appear
excessive; the $8,000 for salary and $2,000 for expenses may be
reduced to a net figure of $6,000.
The expenditures made by the Commission for aides, experts, and
general expenses should not exceed $10,000 per year.
13. It shall be inserted that the Government of Haiti engages itself
to present to the legislative body the measures necessary to give
full effect to these provisions.
These provisions shall be presented for the sanction of the
legislative body in the loan law.
The Secretary of State for Foreign Affairs is commissioned to declare
that of the three groups of lenders, there is no occasion to
consider the propositions made (1) by the Speyer group or (2) by the
National City Co., because propositions providing for two series of
bonds must be abandoned once for all.
The proposition of the banking house of Messrs. Lee, Higginson &
Co. of New York is the one that is to be accepted. It is summarized
as follows:
Direct and immediate issue of $16,000,000 in obligations of 30 years,
6% bonds, at the rate of 85, redeemable by purchase on the [Page 476] market up to par or by
drawings at par if the quoted price is above par; not redeemable
before 15 years, except by gradual amortization necessitating an
annuity of $1,110,000, to be increased by $5,000 a year up to the
29th year (the 30th annuity shall be $833,645), which, with the
yearly appropriation of 25% of all revenues above $7,000,000, up to
$250,000, is the yearly total for amortization.
The Government is disposed to accept a loan offer of this nature, but
with the modifications stated above included in the provisions of
the loan law, and under the reserve of propositions allowing less
unfavorable rates of issue and also a lower rate of interest, as
appears from the explanatory note of the Ministry of Finance17 annexed to this
memorandum.
Port
au Prince
,
December 30,
1921
.
