838.51/2287: Telegram

The Minister in Haiti (Munro) to the Acting Secretary of State

81. The Government presented the budget to Congress this morning without the accord of the Financial Adviser and presumably, although we have not obtained the final text, with many objectionable provisions.

We have feared for some months that the Government would refuse to recognize the right of the Financial Adviser to be consulted on the budget. Our suspicion was increased when the President repudiated his agreement with de la Rue46 regarding the extra pay for Congressmen.47 After our refusal to give effect to the law regarding congressional expense allowances, however, and probably because of my insistence that we would not change our position until there was an accord on the budget, the Minister of Finance finally submitted estimates of ways and means to the Financial Adviser on June 10th and estimates of expenditures on June 23rd.

Despite repeated requests, however, the very important laws of ways and means and expenditures which are an essential part of the budget were not received until after the budget was deposited this morning.

The Financial Adviser promptly furnished his views in writing regarding the budget estimates and indicated his willingness to discuss the matter fully with the Minister of Finance. The latter, however, showed evident reluctance to undertake any detailed discussion of the budget or to make any serious effort to reach an accord. Last Saturday the Minister for Foreign Affairs told me that in view of the Financial Adviser’s failure to give his accord to the budget as proposed [Page 511]by the Haitian Government the latter might be obliged to present the budget without accord. I impressed upon him the fact that this would create an exceedingly serious conflict between the two Governments and insisted that the Minister of Finance should at once begin active discussions with Pixley48 who has been handling the matter because of de la Rue’s illness this week. Pixley had several long conferences with the Minister of Finance. Aside from such questions as,

1.
The Government’s reduction of essential items in the Garde budget.
2.
Its proposal for impractical changes in the budget of the Public Health Service.
3.
Its elimination of charges paid by the Government services for telephones without making corresponding changes in the estimate of revenue and,
4.
Its demand that detailed inflexible budgets be included for the Customs and Internal Revenue Services

the principal difference of opinion has been the Government’s insistence upon a budget of over 32,700,000 gourdes as compared with the Financial Adviser’s estimate of revenues at 31,625,000 gourdes. The budget prepared by the Government, despite the great present and prospective decrease in revenues, called for increased expenditures in practically all departments under Haitian control. Pixley assumed a very reasonable and conciliatory attitude regarding the question of the total amount of the budget. The Government has been insisting upon taking a million gourdes from the reserve to prevent any reduction in expenses in the Haitian Departments, whereas our belief has been that we would find means to cover a portion of the deficit either by new taxation or, as a last resort, by drawing on the surplus if the Haitian Government would make a genuine effort to make reduction comparable to, though not so great as, those accepted by the American Treaty Service. There was no indication until this morning that these discussions were not proceeding to the satisfaction of all concerned.

The Minister of Finance advised the Financial Adviser this morning by letter that he was presenting the budget to Congress and that he would be glad to transmit to the Congressional Committees any further views which the Financial Adviser might have to express. I at once called on the President and made an emphatic protest. He replied that the budget had already gone to Congress and that the Haitian Government had felt compelled to take the action which it did because of Congressional pressure and because of the length of time which had already elapsed since the budget should have been presented according to the Constitution. I have said that I felt [Page 512]that the Government’s action had created a very grave situation and that I would not attempt to discuss it further until I had received instructions from the Department.

The Government’s action is the most serious effort which has yet been made to evade the financial control established by the Treaty. I do not see how we can continue the Haitianization negotiations49 in the face of so flagrant a violation of rights which, as we have continually informed the Haitian Government, we feel we must retain intact. The incident clearly shows how useless a Haitianization agreement will be as a means of establishing satisfactory special relations or at least respect for any treaty rights which we shall still be compelled to exercise.

I had been planning to go on leave next Wednesday. I should like to carry out this plan, visiting Washington immediately upon my arrival for a full discussion of the whole situation here. I should of course be prepared to return to Haiti immediately thereafter if the Department desired although I feel that McGurk can handle any situation which may arise. I can come sooner by air plane if the Department wishes, meanwhile I think that I should be instructed to deliver a strong written protest based on the provisions of the treaty and the agreement of August 24th, 1918,50 coupled with a demand that the budget be withdrawn at once for further consideration between the Financial Adviser and the Minister of Finance.

Please inform me immediately if the Department does not wish me to sail on Wednesday.

Munro
  1. Sidney de la Rue, Financial Adviser-General Receiver of Haiti.
  2. See telegram No. 53, June 4, 10 a.m., from the Minister in Haiti, p. 478.
  3. Deputy Financial Adviser.
  4. See pp. 403 ff.
  5. Foreign Relations, 1919, vol. ii, p. 309.