The Secretary of State to the Chargé in Haiti (McGrurk)

78. Legation’s 120, October 3, 3 p.m., and 121, October 7, 12 noon. The Department is gratified by the general progress that has been made in the budget discussions, as evidenced by the apparent disposition of the Haitian Government to reach an accord with the Acting Financial Adviser and its apparent readiness to balance the budget at 32,000,000 gourdes as recommended by that official. It does not consider, however, that the letter addressed to Mr. Pixley by the Minister of Finance or the statements made to you by the Minister for Foreign Affairs adequately meet the requirements of the situation. The following is a general exposition of the Department’s views:

As intimated in its instruction No. 68, September 25, 6 p.m., the Department prefers to leave to you and to Mr. Pixley the task of working out the specific technical problems connected with the budget. You are authorized to make such adjustments with respect to budget items as seem feasible and practicable, and to refuse to make such changes as do not seem to you to be advisable. In the latter event the Department will support you fully in whatever stand you may take. Pending the definitive conclusion of your negotiations concerning the budget the Acting Financial Adviser should not of course depart from the present provisional douzième of 2,570,000 gourdes.
The arrangements finally agreed upon should be set down in writing in a formal communication from the Minister of Finance to Mr. Pixley through the intermediary of the Legation. Although the actual phraseology of the communication is to be determined by mutual agreement on the part of the Government and you and Mr. Pixley the [Page 533] Department considers that it should in general modify the budgetary laws to conform to the objections of the Acting Financial Adviser, as authorized by the transitory clause, and give assurances that the Haitian Government considers inoperative and without effect those provisions of the budgetary laws affected and authorize the office of the Financial Adviser to operate in disregard of them.
In as much as two sections of the budgetary legislation have been promulgated and a third apparently is to be promulgated, all of which are inaccurate and improper in form and substance, the Department considers it to be highly desirable that equal publicity be given to the arrangement correcting the defects in that legislation. Nevertheless, in view of the reasons advanced by the Minister for Foreign Affairs in justification of the Government’s reluctance to publish the agreement modifying that legislation, and in the interests of an expeditious and amicable settlement of the question, the Department is willing to accept in lieu of other action the letter from the Finance Minister to the Office of the Financial Adviser as prescribed in section b with respect to the budget legislation in general, and a letter from the Minister for Foreign Affairs to you with respect to the objectionable statements in the preambles to the budgetary legislation. The letter should set forth in appropriate terms the disapproval of the Executive of those preambles.