The Chargé in Haiti (McGurk) to the Secretary of State
[Received September 24—6:38 a.m.55]
111. Mr. Pixley informs me that the Minister of Finance has informed him that the Government will not issue an extraordinary credit for the payment of the indemnities to the retiring treaty officials and employees56 before October 1st as they insist that any credit for this purpose shall be issued under the authority of article 22 of the new Law of Expenditures. I believe this is a deliberate attempt of the Government to tie up the payment of the indemnities with the question of balancing the budget, their scheme being that unless we agree to the budget proposed by them there will be no budget and therefore no payment of the indemnities.
Mr. Pixley informs me that an extraordinary credit can be issued under article 21 of the present Law of Expenditures and it has been [Page 520]the expressed intention of the Government all along to issue the extraordinary credit under this article and I believe that the Government is now dragging in the question of the indemnities to force our hand in agreeing to the new finance laws and budget which they propose be fixed at 32,743,000 gourdes with the proviso that it be reduced to 32,000,000 during the coming fiscal year if revenues do not meet the requirements.
Most of the retiring Americans have reservations to sail September 30th and may be unable to do so unless indemnities are paid at that time.
I have been urging the Minister of Foreign Affairs to have the extraordinary credit for payment of the indemnities issued for the past 2 weeks and Mr. Pixley has urged the same thing with the result that the Government has definitely refused to consider it except under a credit to be established in the budget for the next fiscal year in accordance with the provisions of article No. 22 of the new Law of Expenditures.
Mr. Pixley and I feel that our repeated urgings have been of no avail and that the Haitian Government is standing behind the delay which it has deliberately brought about and will so continue until October 1st thereby creating the position of having us oppose something which they consider vitally necessary to them from a political and economic standpoint.
Mr. Pixley has been endeavoring to have the Government bring the budget within the figures provided in the estimates but to date has had no success. The Minister of Finance states that they cannot balance the budget within the estimate, that the law and Constitution do not permit them to reduce salaries or positions and that it is only through such reductions that the budget can be balanced.
It is believed from conversations with the Ministers of Finance and Foreign Affairs that the Government desires to use about 900,000 gourdes additional from the reserve and that if it were not necessary to grant the Garde a further credit of 400,000 gourdes the Government would reduce the budget of expenditures to 32,000,000. The Minister of Finance is aware that the Garde credits must be maintained as proposed but has studiously avoided any commitment on the subject. Mr. Pixley informs me that approximately 800,000 gourdes have already been earmarked from the reserve fund and as Mr. Pixley informs me he has had no cooperation from the Government with a view to reducing the figures proposed by the Government, I cannot recommend that 900,000 gourdes be used from the reserve.