838.516/278a: Telegram

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

21. Hibbert left here this morning by airplane for Miami and Port au Prince.

We understand that agreement has practically been reached on the terms of the contract for purchase of Bank satisfactory to the Haitian Government.

The procedure contemplated at the time you left Washington has been modified in view of Hibbert’s opinion that it would run counter [Page 353]to Haitian constitutional provisions, which Hibbert will doubtless explain to you.

The procedure now tentatively contemplated is the following:

1)
Passage by Haitian legislature of a Law of Sanctions approving the contract under which the Haitian Government acquires ownership of the Bank;
2)
Letter from Haitian Government to American Legation reciting passage of this Law of Sanctions; that it is intention of Haitian Government to confer upon the Bank following powers and duties in order to insure service of 1922 loan and to maintain in force without modification these measures of security until the bonds of the 1922 loan are paid or retired; that in view of the foregoing the Haitian Government proposes the conclusion of a treaty, a draft of which would be enclosed, to which treaty this letter would be annexed as a part thereof. The measures of security described in appropriate language in the letter would be: (a) provisions regarding designation of members of the Board of Directors of the Bank; (b) that all revenues and receipts of the Haitian Government shall be deposited in the Bank; (c) irrevocable instructions as to prior payment out of such revenues and receipts in favor of the service of the loan contracts; (d) authority to the Bank to control and inspect the application of the customs law and customs regulations.
3)
The proposed treaty would make reference to the purchase of the Bank by the Haitian Government and to the annexed letter as described above, and would then provide simply that upon notification from the Haitian Government to the American Legation of the enactment of whatever legislative or executive measures might be required to place in effect the provisions set out in the letter of the Haitian Government, the treaty of 191567 would cease to have effect.

The Haitian Government would also address a second letter to the American Legation, which would not be annexed to the treaty or referred to in the treaty, which would constitute a unilateral declaration of the Haitian Government regarding the financial policy which it proposes to follow in order further to insure the service of the 1922 loan, and would cover such matters as maintenance of a balanced budget, the douzième system, and other matters mentioned in Hibbert’s memorandum.

Hull