838.51/2979: Telegram

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

77. This morning’s Moniteur published the promulgation of the law of sanction of the Debachy loan contract under date of August 30.

Yesterday afternoon through Chapin and the Legation files and last night in conference with Chapin and De la Rue I was apprised of the developments which have taken place with respect to this contract, not only since I was in the Department but also since I telephoned to Edward Wilson54 on August 26.

Accordingly, when I called upon the Foreign Minister this morning to request an appointment for the presentation of my letters of credence (which appointment has been fixed for Friday next) I felt that in view of these developments and of the Department’s instruction No. 31, August 24, 1 p.m. I should lose no time in making certain observations to the Minister. The following is the rough summary of the views I have just expressed to him: I felt sure that the Minister would appreciate not only that I was surprised, but also perplexed at what I had learned since my arrival yesterday afternoon had taken place with respect to the loan contract in the very short time since [Page 675] I had left Washington. At that time my Government had no reason to believe that a far reaching contract involving a fundamental change in the entire governmental financial status of the country was about to be entered into; naturally therefore when I learned upon my arrival yesterday of all that had taken place, of the rapidity with which this important question had been consummated and of the fact that neither the Legation nor the Fiscal Representative had been consulted or even advised of the steps contemplated I could not but—the Minister would understand—be but greatly surprised as well as, I had to confess, considerably concerned.

I had barely had time to read the contract and necessarily was not attempting to discuss it upon its merits. However even the summary reading which I had of it had served immediately to raise several points in my mind that which I thought I should indicate to the Minister as follows:

Firstly, while the contract does not provide for the immission of foreigners in customs or other financial control in Haiti and while I understand that both he and the President had assured the Legation that no such foreign control was desired or contemplated, nevertheless it would appear that the operation of the provision of the contract might open up disturbing possibilities in this connection.

Secondly, there are no precise provisions as to refunding the 1922 loan and although I understood that both the Minister and the President had assured the Legation that the contract necessarily contemplates such a refunding—which of course it necessarily must—the Minister would appreciate that definite and specific provisions as to the exact manner of refunding would be of the greatest interest to my Government. As these provisions are not contained in the contract I assumed they would necessarily form the subject matter of complementary exchange of letters between the Haitian Government and Debachy on this point—my assumption necessarily being fortified by the Minister’s statements to the Legation as reported in paragraph 1 of the Legation’s telegram No. 68, August 23, 2 p.m.

Thirdly, there is a provision for an eventual bond emission which would seem to offer disquieting perspectives.

Aside from the foregoing points which I have thus summarily indicated my first reading of the contract would indicate to me that it would necessarily require a number of interpretive accompanying letters in order to clarify and make more specific many of its terms. The Minister had expressed his intention of furnishing the Legation with further detailed information concerning the transaction; on my part I would at once proceed to study the contract more carefully and I then hoped at the earliest possible moment to have further full discussion with the Minister and with the President in the course of which they could furnish me with such full and complete information as would enable me really to understand this contract with its true [Page 676] bearings and implications so that I might transmit that understanding to my Government.

The Minister stated that he would be glad to have the early full discussion above referred to, and that as soon as I had presented my letters to the President he would make an appointment with him for such a discussion. As to regions [refunds?], he said that both he and the President had made it very clear that they completely realized the necessity of such an operation; upon my again pointing out that very precise provisions as to the manner in which the operations could be carried out were essential he stated that he was even now in consultation with the Fiscal Representative as to how this might best be done. Concluded by saying that he felt confident that he and/or the President could give me such details concerning the transaction as would reassure us that it would in no way operate to the detriment of the interests of the American Government or of American bondholders.

In reply to my question the Minister stated that the official notification of the promulgation of the contract had been given to Debachy as of August 31 so that the 3 months time limit for the first payment set forth in article 1 of the contract had begun to run as of that date. I trust that my action as above set forth was entirely within the spirit of the Department’s instruction above referred to, and meets with the Department’s approval. I should of course greatly appreciate such further instructions as the Department may wish to send me before Friday morning.

In conclusion, may I inquire if the Department has received any answer from the telegraphic instructions which I understand it sent to our Embassy at Paris,55 concerning Mayard’s56 two transactions with the Quai d’Orsay.

  1. Presumably Edwin C. Wilson, Chief of the Division of Latin American Affairs.
  2. No. 349, August 28; not printed.
  3. Constantin Mayard, Haitian Minister in France.