638.5131/37: Telegram

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

13. As a result of insistent demands by the French Government that Haiti do something to concentrate [compensate?] the present unfavorable trade balance (the French [Government?] has even threatened to place a quota on Haitian coffee unless these demands are met), the Haitian Government has agreed to conclude a new commercial convention between the two countries whereby in exchange for a minimum tariff on Haitian coffee and a quota of 30,000,000 kilograms per annum the Haitian Government agrees to apply the rates in effect prior to 1926 on the following importations from France: wines in barrels gourdes .073, wines in bottles gourdes .432, sparkling wines gourdes 1.00, champagne gourdes 1.885, vermouth and aperitifs of specified brands gourdes 1.32, cognacs, armagnacs and liqueurs of specified brands gourdes 2.171. All taxes per liter.

Medicinal and mineral waters are to enter without duty. Perfumes, toilet waters, lotions and dentifrices of specified brands will pay 10 per cent ad valorem. Pharmaceutical products of specified brands 18 per cent ad valorem. The loss in revenue to the Haitian State if these duties had been in effect last year would have been approximately gourdes 140,000. With the view not to affect the mostfavored-nation treatment principle the document has been so worded as to apply only to named specialties of French origin. In view of [Page 337] the fact that Haiti sells practically its entire coffee crop to France and will by the above convention be able to insure this market at such little loss to its customs revenues, which may even be compensated in part by increased importations of the articles affected, I have informed the Fiscal Representative of my approval of the reduced rates. I have done so without referring the matter to the Department. As stated, question is an urgent one and in such talks which only Fiscal Representative and I have had with officials in the Department we have received the distinct impression that the Department was in agreement that Haiti must be prepared to defend itself against this very real threat to its economic existence by making the best bargain it could. All things considered I feel that the terms by which it has been able to secure continuance of its coffee exports to France are reasonable.

There is the further question that the legal adviser to the Fiscal Representative does not consider that this agreement can legally be put into effect until ratified by the Legislature unless an emergency can be shown to exist. The Ministers for Foreign Affairs and Finance, however, insist that it must be made effective immediately, as otherwise there is a grave danger that the French will make further demands or retaliate with a coffee quota. The Fiscal Representative is, however, reluctant to put the new rates into effect without authorization from the Legation. I have told him that I will grant such authorization if or when the Minister for Foreign Affairs informs me that in the opinion of the Haitian Government an emergency exists such as to justify the immediate putting into effect of the tariff reductions pending ratification by the Legislature, and that the Legation will submit the agreement for approval by the Legislature immediately upon its convening in April.