838.51/2985: Telegram

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

80. Department’s telegram No. 38, September 5, 4 p.m. I have just had an hour’s conference with the President during which I set forth the views contained in your instruction and discussed them in detail.

First, as regards the redemption of the 1922 loan, the President repeated his assurances that he had always recognized his obligation to redeem this loan in order to liberate the security thereof so that it might be applied to the new loan; as an evidence of his recognition of this obligation he referred to article 2 of the law of sanction.

I observed that this was only a general authorization and that in view of the complete silence of the contract on the point we desired the definite and specific statements and proposals set forth in the Department’s instruction. In reply the President assured me categorically that the Government intends to set aside out of the first funds available from the new loan sums sufficient to redeem in satisfactory manner the outstanding bonds of the 1922 loan and in reply to my further request he promised that he would confirm this assurance in writing next week.

As to definite and specific proposals concerning the exact manner in which the Haitian Government proposes to carry out this redemption the President stated that as I was aware (see section 3 of my No. 77, September 3, 3 p.m.) he was awaiting recommendations from de la Rue, that he was formally entrusting him with the preparation of these proposals and that as soon as de la Rue should be able to prepare and present them the President would immediately undertake their studying; as soon as the final form of these proposals had been determined upon they would be transmitted to us in writing in definite and specific form. I have had several conferences with de la Rue concerning the preparation of these proposals upon which [Page 680] he is now actively working; they will probably be ready for presentation to the Haitian Government early next week.

Second, as to the view that the loan may prove to be onerous and disadvantageous to Haiti I pointed out to the President some of the considerations fortifying this view which occurred to me as a result of my conferences with de la Rue and Chapin, and especially the apparently excessive fee to be given the entrepreneur. Unfortunately but rather naturally the President was not very responsive on this point and instead sought to emphasize not only the hopes he had as to the increased productivity of the country which would result from the operation of this loan but also the necessity he felt of securing such a loan in order to provide immediate employment on public works for the large number of unemployed. Parenthetically and without getting involved in any side issue I pointed out that all the information I had received prior to coming here was to the effect that there was no real unemployment whatsoever in Haiti.

I also asked the President if it was true—as I had heard—that the first project to be undertaken would be the construction of a road to Kenscoff; he seemed slightly taken aback by this but eventually said that this was so and that he felt that this was entirely justified in that it would be most useful in stimulating the tourist trade which latter was a definite and important aim which he intended unremittingly to pursue.

Third, with respect to the deposit of the sums to be received under the loan the President stated that by a letter supplementary to the contract it was stipulated that the funds in question would be deposited in a New York bank and in response to my request he promised to send me a copy of this letter next week. I took this occasion to point out that even a summary study of the contract indicated clearly that it necessarily required a number of interpretative accompanying letters and the President said that this was so. I then stated that the sooner we were furnished copies of all interpretative and explanatory documents in connection with this contract so that we would have a really clear picture of the whole transaction the more desirable it would be all around. The President assented and said that he intended to furnish us the complementary documents.

The deposit of the sums to be received by the Haitian Government opened up the whole question of the 1910 loan. Unfortunately the communication from the Paris Embassy referred to in last paragraph of the Department’s instruction under reference apparently missed September 4 airmail and will therefore not reach here until tomorrow afternoon. However, preserving the fiction that de la Rue had told the Legation nothing of what he had learned from the President in the premises, I said that advices just received from our Embassy in Paris had given me considerable concern as to just what Mayard [Page 681] might or might not have done in Paris and that I felt it essential that we should have a precise statement as to his activities and of just how the matter stood at the earliest possible moment. I then called the President’s attention to the following paragraph in yesterday’s Matin:

“It is towards October 15 that in conformity with arrangements arrived at between the French and Haitian Governments as a result of their recent commercial differences that there will be begun in Paris negotiations relative to the question of the 1910 loan or more exactly the question of the gold franc.”

The President dismissed this as irresponsible newspaper gossip and said that he would be glad to have me furnished with fuller details concerning the transactions between Mayard and the Quai d’Orsay; he could state now that all that had been agreed to was that in October the Haitian Government would present to the French bondholders a statement of its views. In further response to my categorical question the President said that I could assure you that the Haitian Government had no intention of abandoning the position it had heretofore taken in this respect and that in the coming negotiations it would not depart from the principle that the bonds are not payable in gold.

Fourth, I thought it well also to express to the President the hope and the assumption as to a thorough investigation by the Haitian Government of the standing and responsibilities of the financial interest back of this proposed new loan set forth in the penultimate paragraph of your instruction under reference. To this, specifically, the President was unresponsive but as this came just before the end of my exposition of your views he may in his mind have included it in his initial reply (before we entered into detailed discussion) that after studying another aide-mémoire which I would leave with him he would answer it point by point and felt confident that he could give my Government satisfactory assurances on every point.

Fifth, I have noted and will bear in mind the general instruction as to the manner of conducting discussions of this general question.

  1. Telegram in three sections.