838.516/280: Telegram

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

25. Your 42 [41], May 5, 1 p.m. and letter with enclosures to Wilson dated May 5.71 We explained carefully to Hibbert that the American Government could not base a treaty with the Haitian Government upon a contract between the latter Government and an American banking house. We thought it was clearly understood by Hibbert and De la Rue that the procedure should be as set out in our 21, April 28, 3 p.m., and we feel it important that this procedure be followed.

Letter “A” from the Haitian Government should set out in detail the four measures of security for the bondholders mentioned in paragraph numbered 2 of our 21, April 28, 3 p.m., with the statement that [Page 355] such measures will be maintained in force without modification until the bonds of the 1922 loan are paid or retired; measure (a) should recite the provisions regarding designation and appointment of members of the Board of Directors in much the same terms as those employed in the Sales Contract; measures (b) and (c) should comprise the pertinent provisions of Article XV of the Sales Contract and of the penultimate paragraph of the draft letter marked “B” enclosed with your letter under acknowledgment; measure (d) should contain provisions which in your judgment and that of De la Rue are satisfactory as to the necessary authority to the Bank to control and inspect the application of the customs law and customs regulations; apparently such provisions are suggested in the third and fifth paragraphs of the letter marked “B” enclosed with your letter under acknowledgment.

The definitive letter “B” from the Haitian Government should comprise the second, fourth, sixth and eighth paragraphs of the draft letter “B” enclosed with your letter under acknowledgment (De la Rue should be consulted as to the satisfactory form of these paragraphs) as well as the statement of financial policy embodied in the memorandum enclosed with your letter under acknowledgment. There would seem to be no reason for sending a separate memorandum to this Government, although we agree that the separate memorandum should be transmitted by the Haitian Government to the Fiscal Agents and to the Foreign Bondholders Protective Council.

We do not desire any phraseology used in letter “B” such as is contained in the Haitian draft with reference to “permitting the United States Government to be relieved of obligations assumed towards the bondholders” nor any reference to the prospectus of the loan.

  1. Letter of May 5 with its enclosures not found in Department files.