838.51/2469: Telegram

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

45. Your 80, July 28, 11 a.m. Department would of course prefer following the procedure set out in its instruction No. 204 of June 27, namely, that the new financial agreement should not enter into force until the expiration on May 3, 1936 of the 1915 treaty. However, if it should appear to you as your negotiations develop, that it would be advisable in our own interests to agree to abrogate the treaty of 1915 and substitute the fiscal representative for the Financial Adviser-General Receiver before 1936, the Department perceives no objection in principle to this, provided that the new agreement which would replace the 1915 treaty embodies the system of financial control set forth in the Department’s instruction above mentioned and affords adequate safeguards for our other interests. The Department is of the opinion that the draft financial agreement attached to its instruction of June 27 confers upon the United States all the essential powers with reference to the supervision over Haiti’s finances and the collection of Haiti’s revenues pledged to the service of its public debt which it possesses under the 1915 treaty as necessary for safeguarding the interests of the bondholders and if it shall ultimately appear advisable to replace the 1915 treaty by a new agreement prior to 1936, it will be necessary that the new agreement confer upon the United States powers at least equal to those contemplated in the proposed draft agreement forwarded with the Department’s instruction of June 27, and that it shall contain [Page 663] satisfactory provisions respecting other important interests of the United States dealt with in existing arrangements with Haiti.

Furthermore, the Department agrees with your view that we should not in any case agree to such a procedure even in principle unless and until the Haitian Government is committed to the acceptance of our views regarding the essential features of the financial control.

For your information and with reference to the third from the last paragraph of instruction No. 204, the Department considers that any agreement which may be entered into along the lines outlined in that instruction should take the form of a convention and not merely that of an executive arrangement.

Castle