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

No. 8

Sir: With reference to the Legation’s despatch of February 20, 1922,79 transmitting a copy of an agreement between the Minister of Finance of Haiti and Mr. Gregory, of the National City Bank, regarding the proposed modifications in the charter of the Bank, you are informed that this agreement has been the subject of discussion between the Department and officials of the National City Bank and that certain changes in the agreement have been suggested by the Department and accepted by the Bank.

The changes thus agreed upon were desired by the Department in order to make the new provisions of the bank charter consistent with certain provisions agreed upon, in the interest of Haiti, by the Department, the Financial Adviser of Haiti, and the National City Bank, at a conference held in February 1920. The principal modifications which the Department deems advisable in the agreement concluded at Port-au-Prince were as follows:

That the Bank should hold an adequate reserve against deposits. This provision is one which appears in the banking laws of all civilized [Page 533] countries and it is especially necessary to safeguard the interests of depositors in any bank.
A revision of that portion of the concession relating to the issue of new fractional currency. This Government is deeply interested in maintaining the currency system of Haiti upon a sound basis. After careful study by officials of the Department and after obtaining the opinion of high financial authorities, the Department felt that the proposed issue of bonds for the stabilization of the nickel currency was not calculated to produce the results desired and that the stabilization of the fractional currency should be sought rather by providing an adequate reserve fund in cash.
A provision that the National Bank should allow interest to the Government upon its deposits under certain conditions. It is unnecessary to comment upon the value of this provision to the Haitian Government.
A provision giving the Government of Haiti the preferential right to purchase the stock of the National Bank in the event that the present owners should desire to sell it. This provision also is obviously in the best interest of the Haitian Government.

Several other changes of a minor nature have been suggested by the Bank or by the Department, with the hope of making the concession more workable.

For your information, there is transmitted herewith a copy of the proposed agreement in its new form,80 containing the modifications approved by the Department. The Department understands that Mr. W. F. Voorhies, Assistant Vice-President of the National City Bank, will leave for Haiti in the near future, with a view to discussing the proposed modifications of the agreement with the Haitian Government. You are authorized to extend to Mr. Voorhies every proper assistance in obtaining the ratification of the agreement in its present form, and you may inform the Haitian Government that the Government of the United States earnestly hopes that this matter, which has been the subject of prolonged negotiations, will be promptly concluded. You may further state, if it proves necessary, that this Government regards the changes made in the agreement signed at Port-au-Prince on February 20, last, as essential for the protection of the interests of the Haitian Government.

You will note certain pencil changes in the English text of the proposed agreement as submitted by the Bank to the Department. There are apparently typographical errors in this text which do not appear in the French text. It is the understanding of the Department, however, that the French text will be submitted to the Haitian Government and that the English version is to be regarded merely as a translation.

Charles E. Hughes
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