838.51/1236: Telegram

The High Commissioner in Haiti ( Russell ) to the Secretary of State of State

32. Have had numerous conferences with Ministers Foreign Affairs and Finance considering provisions contained in memorandum submitted by Haitian Government under date of December 30th, 1921 and transmitted to Department of State in despatch number 564;21 each provision considered in sequence with following result:

  • Provision 1 struck out.
  • Provision 2 struck out.
  • Provision 3 struck out.
  • Provision 4 to read as follows: “As an interpretation of article number 3, clause 3, of protocol, Haitian Government reserves the right after verification of debt to come to an agreement through its Financial Adviser with holders of obligations of National Railroad of Haiti regarding method of payment said debt.[”]
  • Provision 5. Haitian Government is of the opinion that article 3, clause 4, of protocol having lapsed, debt having been liquidated, there should be inserted in the law of sanction a clause so stating.
  • Provision 6. Haitian Government agrees to change of word “must” to words “may be” in this clause. Referring to paragraph [Page 485] 2 of this provision, Haitian Government claims that by a careful reading of the protocol last paragraph of article 3 the claims of the Féquière Commission need not be submitted by the Government unless it so [desires?]. Furthermore, that before the Claims Commission begins its work the two Governments must decide by agreement whether the findings of the Féquière Commission should be submitted or not. In addition, Haitian Government claims that report of Sambour Commission has been sanctioned by Haitian law and is, therefore, not a claim but a liquidated debt and should not be placed before the Claims Commission. The Haitian Government, however, reserves the right to scale such claims on payment. Paragraph 3 of this provision struck out.
  • Provision 7. The Haitian Government desires to limit the cash amount to be paid to 50 percent. It states that no one knows what the report of Claims Commission will be and it might make a report that would require payments in cash in an excessive amount which might embarrass Haitian Government.
  • Provision 8. Substitutes for first paragraph the following: “That on the amount of the loan of $40,000,000 the Republic engages itself to contract in accord with the Financial Adviser the amount of $16,000,000.[”] In paragraph 2 the figure “10” to be changed to “13”.
  • Provision 9. Haitian Government states that the Haitian law relative to redemption of bonds conflicts with a part of article 7. In said protocol article 7 should be eliminated after the first sentence thereof and excepting the last sentence, which two sentences should be retained, the last sentence to be changed slightly to include agriculture and public instruction in addition to public works.
  • Provision 10. This provision is cared for under provision 9.
  • Provision 11. First paragraph struck out. Paragraph 2 of this provision to read: “At the expiration of the receivership the debt service shall be transferred to the Haitian Government through the National Bank of Haiti.[”]
  • Provision 12 struck out.
  • Provision 14 [13] struck out.

In addition to requests made in the above-mentioned provisions, the Haitian Government requests that it be permitted the right to purchase bonds under par which are to be retired; also, reserved [regarding?] the clause in Lee, Higginson memorandum where receipts exceeded $7,000,000, 25 percent to be set aside, that said clause shall contain after the word “then” and before the word “twenty-five” the following: “At the option of the Haitian Government and in accord with the Financial Adviser.”

Furthermore, the Haitian Government believes that under present market conditions better valuation should be obtained than 85 and that it should be about 90 if possible.

In this connection Haitian Government states that protocol has never been made a law and must be voted on and sanctioned as a part of the loan law with the changes above indicated.

[Page 486]

My opinion is that Haitian Government is acting in entire good faith in this matter and desires early settlement loan. Ministers stated that if above changes are satisfactory Council of State would be called next week to pass loan law which I hope to receive from the Department by that time.

Contention regarding Féquière Commission not in accord with other idea as my interpretation is that findings must be submitted to the Claims Commission. Haitian Government, I feel sure, will agree to this if Department upholds my opinion. Regarding Sambour Commission contention Haitian Government appears fair and equitable. Findings will be greatly scaled by the Government. Opportunity for graft occurs but the integrity of present Minister of Finance beyond question and he will probably remain in office and be entrusted with settlement of claims. Political effect on country of prompt settlement of Sambour claims would be excellent, these claims being held mostly by Haitians.

Referring to clause regarding transfer of debt service at the expiration of receivership, if, before said expiration necessity arises for continuation of receivership, it can be effected by separate agreement. It is believed bondholders will be amply protected and my understanding similar condition prevails during the existence loan about to be made.

At this critical period Haitian Government desires this action for political effect as extension of control 30 years being much commented on.

My earnest recommendation that agriculture and public instruction be added to last sentence of article 7.

  1. Ante, p. 472.