The Vice President of the National City Bank (G. E. Gregory) to the Secretary of State

Sir: We have the honor to acknowledge the receipt of your letter of April 6, 1922, relating to the transfer of the Contract of Concession of the National Bank of the Republic of Haiti.

In regard to this matter we want to make it plain that we were ready to proceed under the modifications to be made in the Contract of Concession agreed to at a conference held in the Latin American Division of the Department of State on February 3, 1920 but were prevented from doing so by the Haitian Government’s refusal to give its consent to the transfer under the proposed modifications and by its persistence in withholding its consent although the State Department assured us that the consent would be forthcoming.

This embarrassing condition continued for more than two years during which time the French Tax Office was pressing us for a decision as to whether or not the National Bank of the Republic of Haiti intended to liquidate or operate under its French Charter, and if the latter, the French Government insisted that we pay the tax assessed upon it for the period in question. This condition, as well as a demand by the Haitian Government for an examination of the Bank, being brought to the attention of the State Department, it was, [Page 527] at a Conference held in the Latin American Division of the Department of State, suggested that someone be sent to Port-au-Prince with plenary power to conclude an agreement satisfactory to the Haitian Government and ourselves. After having concluded such an agreement, on February 20, 1922, with Mr. J. Charles Pressoir, Secretary of State of Finance and Commerce, we were disappointed that it did not meet with the approval of the State Department.

Some of the provisions in that agreement to which the Department of State now takes exception, were insisted upon by the Haitian Government and we feel that there will be difficulty and delays in securing its consent to any change in them. The alterations which the Department of State proposes will, in our opinion, open up the whole subject, and we therefore desire to suggest a few changes which we think will clarify the situation and in part supply an equivalent for the valuable part of the concession which the Bank of Haiti is asked to surrender.

Provided the changes herein suggested to the modifications of February 20, 1922 are made, we will agree:

1. To eliminate from that Agreement the portion relating to the issue of bonds for the stabilization of nickel currencies.

2. To allow interest in accordance with Article 3 of the modifications proposed between the Department and ourselves February 3, 1920, with the understanding that the following clause be added to that Article; “Provided, that the Bank will not be required to allow interest on Government funds on deposit in Haiti or New York when the Government of Haiti is indebted to the Bank for money borrowed”.

3. To include in the Agreement, Article 8 of the modifications proposed between the Department and ourselves on February 3, 1920, which relates to the sale of the stock of the Bank of Haiti provided the following clause is added, viz:—“to be exercised within 30 days from receipt of notice of proposed sale”.

4. We will agree to the interpretation regarding the commission as outlined in your letter of April 6, 1922.

5. In regard to the examinations and reports, we would suggest that the Article relating to this subject be revised as follows:—

“For the general inspection of the Bank the Government of Haiti shall during the life of this Concession have the right, at its own expense, upon eight days’ notice to the Manager of the Bank at Port-au-Prince, to examine semi-annually, by one or more expert accountants to be chosen by the two contracting parties and the Financial Adviser, the books, funds, portfolio, affairs and operations of the Bank, and to call for reports (statements) quarterly, and the Financial Adviser during the life of the Haitian-American Convention have the right personally, or thru his agents, to inspect the operations [Page 528] of all the Government accounts in the Bank and call for monthly reports of such accounts if he deems it necessary to do so.

Copies of the reports of all semi-annual examinations and quarterly statements shall be handed to the Haitian Government and to the Financial Adviser”.

6. In lieu of Article 3 of the original Contract of Concession as amended by the Agreement of February 20, 1922, we suggest that the following be substituted:—

“The Bank shall be organized as a Haitian corporation in conformity with the Haitian Laws regulating such corporations and shall be exempt from all incorporation and registration fees. Its domicile shall be at Port-au-Prince where the annual shareholders’ meeting for the election of Directors shall be held, and where the archives (records) shall be kept. The Directors’ meeting may be held at Port-au-Prince or New York, according to the convenience of a majority of the Board. Copies of the minutes of the Board of Directors shall be kept in the Bank at Port-au-Prince. The Bank, upon agreement with the Government, shall have the right to establish branches and agencies wherever it shall be considered advisable for the needs of the business”.

7. From Article 14 strike out the following phrase:—

“within the limitations mentioned in Article 15 which follows”

This amendment is made necessary by reason of the fact that Article 15 is eliminated by Agreement of February 20, 1922.

8. Add to Article 18 of the original Contract of Concession the following paragraph:—

“The Bank shall hold in its vaults in legal tender money, gourdes or dollars, a reserve of twenty per cent (20%) of its governmental, bank, individual and commercial net demand deposits and five (5%) of its time and savings deposits. The Bank may loan the remainder of its deposits as described above in the ordinary course of its business under rules prescribed by its Board of Directors”.

In view of the fact that the Bank of Haiti is surrendering a valuable part of its concession by agreeing to allow the Government interest, we are justified in asking that the additional expense of examinations, and the incorporation and registration fees, should be borne by the Government of Haiti, and that the principle that the Bank may loan a portion of its deposits should be established.

We appreciate your kind offer to instruct the American High Commissioner at Port-au-Prince to recommend to the Haitian Government the acceptance as amendments to the Bank’s concession of the modifications and if you are in accord with the suggestions herein made and approve them, we would thank you to include these amendments in your instructions.

I am [etc.]

G. E. Gregory