The High Commissioner in Haiti ( Russell ) to the Secretary of State
[Received August 12—2:13 p.m.]
90. Following note just received from the Haitian Government:
“I have had the honor to receive Your Excellency’s letters dated July 25th and 27th, last,50 relative to the loan negotiations which are now under discussion. Referring to my note of June 22nd last,50 in response to Your Excellency’s letter of the 19th of the same month,50 I am charged by the Council of Secretaries of State to confirm that the Haitian Government authorizes the Financial Adviser to solicit offers from all the bankers for the $16,000,000 of the bonds of series A, the emission of which has been authorized by the law of June 26th, 1922.51
1. It is understood that this issue will be made according to the following conditions:
Sixteen million dollars of bonds of series A bearing 6 percent interest per year, redeemable in 30 years by annual drawings at par or by purchase on the market below par.[Page 507]
The Haitian Government reserves the right to purchase these obligations at par at any time after the 15th year, provided previous notice is given within a reasonable delay.
2. These obligations will be guaranteed in conformity with article 8 of the protocol and will have a sinking fund such as is stipulated in the note of July 25th.
3. Besides the amortization funds there will be a market fund constituted from the general revenues of the Republic. If during any year of the duration of the series A issue these general revenues exceed $7,000,000, 25 percent of this excess, but not more than $250,000 yearly, will be employed for the purchase in the market of the bonds of this issue at a rate not exceeding par. If by reason of a default in the purchase of the bonds at par or below a balance exists, this balance will be returned to the Public Treasury.
4. The offers of the bankers will be closed, that is to say, that the successful bidder for the loan guarantees the payment of the funds of the loan to the Haitian State on the basis of the rate of issue resulting from the bids.
5. The bids will be received by the Financial Adviser and the Haitian representative duly named at Washington. They will be made above a minimum rate of issue.
6. All expenses whatsoever of issue, publicity and others will be at the expense of the bankers. As soon as the loan contract will have been signed by the Financial Adviser and the successful bidder it will be transmitted to the Haitian Government for submission to the sanction of the legislative power.
[In the meantime it remains recognized as a necessity of the present situation that upon the signature of the loan contract the bankers may proceed to the emission of the loan.]51a
Immediately after the sanction of the contract by the legislative body, the Haitian Government will name the Haitian member of the Claims Commission and will take all other necessary measures with a view to the constitution of said Commission.
It remains understood from this moment that a special law, the dispositions of which will be arrived at in cooperation with the new Financial Adviser, will be proposed to the legislative body with a view to authorizing the Government to issue the interior bonds, 6 percent, series B, of about 5 million dollars for the adjustment, in conformity with the protocol, of the interior debt; these will be payable in Haiti and will have the same guarantees as the bonds of series A of the 40 million dollar loan.”
Sinking fund table referred to in paragraph 2 of my note of July 25,52 was Lee, Higginson sinking fund table contained in annex to letter of Lee, Higginson Company to Mr. McIlhenny dated November 8, 1921.52
Referring to last sentence of paragraph 5, the President informed me that he deemed this action necessary in order to prevent bankers [Page 508] from collusion and that he left minimum price to the discretion of the Department. He informed me this morning that immediately upon signing of loan contract that Haitian member of Claims Commission would be named.
Understand Haitian representative Mr. Dejean will sail from Port au Prince August 22.
Copy of the above will reach the Department by mail August 18.