838.51/1944

The Secretary of State to the French Chargé (Sartiges)

Sir: I have received your note of December 23, concerning the differences between the Haitian Government and the Bank of the Parisian Union with regard to the service of the five per cent gold loan of 1910. You say, with reference to the Department’s note of July 31, last, that your Government can only adhere to its former statements, and you add that it does not appear for the present that the question to be determined is whether the Haitian Government is in the right when it refuses to effect the service of its loan in gold but rather to indicate what judicial authority should be appealed to for a decision on this question. You say further that your Government has instructed you to propose that the previous question as to whether under the loan contract there is occasion for arbitration be referred to an arbitrator and that only if that arbitrator should answer this question in the affirmative would there be occasion to refer the case to arbitration.

In reply I can only refer you again to the Department’s note of March 26, 1926, in which the Department set forth at length the reasons [Page 434] which impelled it to decide that it could not properly advise the Government of Haiti to agree to submit to arbitration the pending difference of opinion between it and the Bank of the Parisian Union. This decision was reached by the Department after a very careful examination of the questions involved and was based upon the Department’s conclusion that the Bank of the Parisian Union is not entitled to invoke the arbitration provisions of the 1910 loan contract in respect of the subject matter of the present dispute. The matter has been re-examined by the Department in the light of your suggestion of December 23, 1926, and I regret to inform you that the Department cannot see its way under the circumstances to advise the Government of Haiti to submit to arbitration the question whether its dispute with the Bank of the Parisian Union should be submitted to arbitration.

Accept [etc.]

Frank B. Kellogg