838.51/2580

The Minister in Haiti (Armour) to the Secretary of State

No. 32

Sir: With reference to my telegram No. 136 of December 21, 3 p.m., and previous correspondence, I have the honor to transmit to the Department copies of a memorandum20 prepared and signed by the Minister for Foreign Relations, of a proposal made to me in the course of a conversation with the President on December 22nd, together with my own minutes of the conversation in question.20

[Page 707]

As will be noted from my minutes of the interview it was proposed that, in return for the Department’s approval of a bankers short-term advance of $400,000 to start work on the Artibonite project and anticipating that later, the bankers will consent to a larger term loan of about $2,000,000.00 as requested in the Haitian note of November 18, the President would submit to the Legislative Body a treaty along the same general lines (with certain amendments as to form) as the rejected convention of September 3, 1932. He proposed further that, as soon as such a treaty was ratified, the Department give its consent to the expenditure of $200,000.00 from the cash reserves of the treasury for the execution of a part of the program of public works set forth in the note of November 18.

The President assured me that with the Artibonite development actually under way and in view of the evident necessity of a loan to complete this project and the other public works planned, he would have sufficient backing of public opinion to force ratification of a treaty by the Legislature.

The written memorandum prepared by the Minister for Foreign Relations does not contain a definite engagement to obtain the ratification of a treaty covering the pending issues and differs from the oral proposals made in that it asks that $200,000 be made available immediately for public works other than the Artibonite project instead of after ratification of the proposed treaty.

I feel, however, that the Foreign Minister’s memorandum is as definite and satisfactory a written assurance with respect to the Treaty as we can expect. I am not inclined to believe that the request for approval of an immediate advance of $200,000 from reserves to construct roads and other public works was made with much expectation that it would be granted. It is very possible, however (see final paragraphs of the enclosed memorandum by de la Rue21) that some funds could be made available to start certain road projects before the Legislature convenes next April.

The precise terms of the proposed revolving fund credit have not yet been received either by the Haitian Government or the Financial Adviser, but it is assumed that, by this time, they have been communicated to the Department by the National City Bank. Presumably they are in substance as described in the enclosed memorandum prepared by the Financial Adviser.

Personally I feel that we should comply with the Haitian request for approval of the short-term, bankers loan of $400,000.00 and I believe that we can place considerable reliance on the President’s oral assurance that, under the conditions as proposed he will be able [Page 708] to obtain ratification of a treaty of substantially the same provisions as that of September 3, 1932.

There is no question that the President, if he wishes to exert the necessary influence and authority, can convince the Legislature of the necessity of an agreement on the pending issues. According to reports received by the Legation the nationalist opponents of the Treaty and the Government were astonished and shaken by the firm action of the President in returning to the defense of the Treaty in his Aux Cayes speech.22 There are certain irreconciliable opponents in the Senate but the entire membership of the Chamber of Deputies obtained its election as a result of the support of the Government, and despite the change in salary and extension of their term of office which they decreed themselves in the new Constitution voted last August, they do not feel themselves sufficiently sure of their present scale of pay nor their tenure of office to oppose a really determined insistence by the President. As reported in despatches at the time the initial reaction in both branches of the Legislature to the introduction of the treaty of September 3, 1932 was not unfavorable. It was the weak defense of this treaty by the Government and the practically unopposed attack of the opposition press and certain senatorial leaders that caused its rejection.

The President has now taken a strong stand on the treaty and a second defeat on this issue would be unwelcome to him as it would be to us. I was much impressed by the change in his attitude since his return from Aux Cayes undoubtedly accounted for by the really enthusiastic reception accorded him there as well as the favorable comment on his speech. The confidence in himself before lacking seemed to have returned, and if only he can be helped to continue in his present mood, I cannot believe that the Legislature would dare to block him particularly if public opinion can be properly prepared between now and April in support of his projects envisaged and the Legislature made to feel it.

Even though we may have to discourage any advance from the cash reserves at the present time (it will be noted that in my talk it was proposed that this advance should be made only after ratification of the Treaty and pending the conclusion of the larger, long term loan, while in the written memorandum of the Foreign Minister it is suggested that this advance take place at once) approval of the $400,000.00 revolving credit followed perhaps in February by permission for a smaller advance of say $50,000.00 from the cash reserves, if conditions appear to warrant it, would permit work on certain roads in the South to be begun and thus enable the President to say to the Southern Senators [Page 709] and Deputies that the continuation and completion of the projects would depend upon ratification of the Treaty. As to the feasibility of the project on which the money is proposed to be spent, as shown by the enclosed memorandum of the Financial Adviser the two leading American banana companies are evidencing real interest in Haitian banana growing. The expert of the Standard Fruit Company, now studying conditions on the ground is of the opinion that within a year after irrigation and drainage of the Artibonite is started the section could be exporting bananas at the rate of 1,000,000 stems per annum and that with completion of the irrigation this figure could easily be raised to 4,000,000 stems which, according to the expert, is the amount desired by his company. If the development proceeds as satisfactorily as hoped and world financial conditions improve it should certainly be possible for Haiti to obtain additional funds necessary to complete the project.

To sum up the foregoing discussion I believe that the Department should approve the short-term loan of $400,000.00 which I understand the National City Bank is prepared to grant and I am of the opinion that considerable reliance can be placed upon the assurance of the President that the Legislature will ratify a satisfactory agreement on the question of financial administration after 1936. It is possible that, if the Department decides to approve the new proposals it will wish to have such approval signified perhaps in the form of a reply to the Haitian Government’s note of November 18, last. However, no official notification, (the Foreign Minister’s memorandum to me is of a strictly unofficial nature) of the change in the plan as set forth in the note has as yet been addressed to our Government and for the completion of the records the Department may wish to have some such official notification. It may be that if the Department approves the $400,000.00 credit on the condition that the President will attempt to secure ratification of the treaty, it will wish so to inform me and I could then notify the Haitian Government that we are prepared to give our approval upon the receipt of a note setting forth the new proposals. As to what written assurances we can expect from the Haitian Government regarding the treaty, it is hard to say. Even though they may be, and rightly so, optimistic as to their ability to secure ratification they may be reluctant to place themselves on written record to that effect. Furthermore, it is a question in my mind how far we should insist on such written assurances. Once assured that there will be no approval on our part to a further increase in the public debt unless or until the treaty is ratified, I feel that we have here an assurance far stronger perhaps than an official promise in writing which latter, if its existence became known, might greatly embarrass the President in his relations with the Legislature, [Page 710] even giving them a weapon, if used as they would be capable of using it to defeat the treaty.

Perhaps, therefore, the Department would be willing to grant me discretionary powers as to how far we should insist upon written guarantees in return for our approval of the new proposal.

We are still studying the matter here and, as stated, the final proposition of the bank has not yet reached Port-au-Prince.

I will report by telegraph any new developments and any suggestions which may occur to me as of possible use to the Department in the new phase of the situation.

Respectfully yours,

Norman Armour
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  4. For text of the speech, delivered December 10, 1932, see Le Moniteur, December 29, 1932.