838.51/2102
The Secretary of State to the French Ambassador (Claudel)
Excellency: I have the honor to refer to your note of May 3, and my preliminary reply of May 20,35a concerning the question of the exchange of certain bonds of the National Railroad of Haiti for bonds of the Series C after April 1, 1926.
[Page 219]A reply has now been received from the Financial Adviser of Haiti36 setting forth fully the status of this matter.
From the statement of the Financial Adviser it appears that the agreement concluded September 13, 1923, provided for the deposit of National Railroad bonds within ninety days from that date. The plan of the Receiver had been previously agreed to by the Government and this was intended to be carried out by the provisions of the law of December 27, 1923. In Article 4 of this law the Government extended the period for deposit to February 1, 1924. The conditions subsequently imposed by the Haitian Government in providing a further period for the exchange after February 1, 1924, are indicated in the preamble of the Series C loan contract, sanctioned by the law of June 17, 1925. The relevant portion of the preamble reads as follows:
“… and in pursuance of an agreement entered into between the Republic of Haiti and the said Receiver whereby the Metropolitan Trust Company of the City of New York with offices at 120 Broadway, City of New York, State of New York, United States of America, has been designated as the bank for the deposit of the said Six Per Cent Gold Sinking Fund Bonds and for the deposit by the Republic of Haiti of the said Temporary and definitive Bonds, Series C, to be issued and deposited by the Republic of Haiti in respect of the exchange for the said deposited Six Per Cent Gold Sinking Fund Bonds, and whereby and whereunder Certificates of Interest in the said temporary bond have been or are about to be issued by the said Trust Company to depositors of the said Six Per Cent Gold Sinking Fund Bonds which are presented for exchange on or before March 31, 1926. …”
The Six Per Cent Gold Sinking Fund Bonds mentioned in the quotation are those of the National Railroad. Under this wording only the depositors of those National Railroad bonds presented for exchange on or before March 31, 1926, are entitled to the certificates of interest appurtenant to the above mentioned temporary bond, which in turn was replaced by definitive Series C bonds. In other words, the Series C contract as sanctioned and given the effect of law, limited the period for exchange in that the Series C bonds were to be exchanged for only those National Railroad bonds deposited on or prior to March 31, 1926.
From the above it would appear, therefore, that the Financial Adviser under the Series C loan contract had no authority to approve the exchange of Series C bonds of the National Railroad deposited subsequent to March 31, 1926. In point of fact, however, the period for the exchange was, at the instance of the Haitian Government, extended from the original ninety days agreed to by the bond holders for more than two years.
With a view to a final satisfactory settlement of this matter, however, the Financial Adviser states that a definite settlement of the [Page 220] problem which obtains in virtue of the nonpresentation of a portion of the National Railroad bonds for an exchange within the prescribed period remains to be accomplished. It is trusted that this result will be achieved through a proposed new contract which it is anticipated will be entered into between the Haitian Government and the National Railroad.
I trust that the explanation submitted by the Financial Adviser covers fully the questions on which you desire information.
Accept [etc.]