838.516/343
The Chargé in Haiti ( Chapin ) to the Secretary of State
[Received April 1.]
Sir: I have the honor to refer to my telegram No. 24, 11 a.m., March 29,11 and to my telegrams Nos. 22 and 23 of yesterday; and to give below a brief review of the recent developments with regard to the bank sale contract in Haiti, since the Minister’s despatch No. 563, March 11, 1935.
It will be recalled by the Department that in a final interview with the President before the Minister’s departure, President Vincent informed him that the Haitian Government was proceeding on the basis of the May 12th Contract to secure approval by the Senate and Chamber, and that he hoped very much that the Bank, and later our Government, would be willing to proceed with its part of the bargain. This approval by the legislative bodies has now been secured by what is tantamount to an unanimous vote. As I reported in my telegrams yesterday, although the text of the law of sanction as enacted has not been made public, it is understood not to contain any changes in substance or spirit from the text of the May 12th Contract, The changes are said to be limited only to those aiming at verbal clarification, and stated already to have been accepted by Mr. Lancaster in his letter of July 2nd, 1934, to Mr. de la Rue.
On the occasion of my interview with the President on March 25, he stated that word had been received from Mr. Blanchet to the effect that Mr. Lancaster was to be in Washington that day. I did not have an opportunity to discuss the matter with the President, but I may say that he expressed himself as optimistic with respect to the eventual outcome on the bank contract. This optimism appears to have continued through the week, heightened no doubt by the greatly favorable endorsement which his economic program is being given by the legislature in special session. Mr. de la Rue, who saw him as late as yesterday, informs me that when he put to him the direct question whether he had any news from Blanchet as to any developments with respect to the bank contract after his interview with Lancaster, the President stated that Blanchet had reported that no difficulties were to be anticipated, if the contract in the form as signed May 12, 1934, were passed by both houses of the legislature.
[Page 718]In view of the above, both Mr. de la Rue and I were somewhat surprised this morning when we read Mr. Lancaster’s telegram of March 28 to Mr. Voorhies. (Mr. Voorhies received this telegram yesterday afternoon but did not communicate it to me or to de la Rue until this morning.) For convenience, I am quoting the text in full:
“Your cable of the 28th instant. I am writing fully to you. At my visit State Department last Monday, made at the request Mr. Welles, he stated Department reserves the right to consider later validity plebiscite and reorganization legislative body. My reaction is Bank cannot take risk accepting three years collateral notes assuming consequent credit risk when ultimately enforcement rights to collateral and collection of notes would depend on Haitian courts possibly at that time under interests hostile present régime. Hopeful eventually ironing out other questions in form which would be mutually satisfactory. Find assumption of credit risks in view re-constitution legislative body extremely serious. I advised Blanchet Monday of our position. You may use this cable in your discretion. Regards. Lancaster.”
It will be seen that this cable is at variance with the information apparently received by the President from Blanchet. Mr. de la Rue and I discussed the situation this morning with Mr. Voorhies. We feel that in the circumstances, it would be unwise to have the contents of Mr. Lancaster’s recent cable communicated to the President, who would undoubtedly jump to the conclusion—as he has in the past—that this was another maneuver on the part of the National City Bank to modify its attitude as expressed in the May 12th Contract. We suggested to Mr. Voorhies, and he agreed, to keep the contents of this telegram confidential pending the receipt of further information clarifying the situation. The full details in writing mentioned by Mr. Lancaster will presumably not arrive until Monday, and it is impossible to foretell how these may modify the Bank’s telegram. However, some word as to the Department’s attitude would be greatly appreciated, particularly with respect to the question as to the validity of the endorsement by the Haitian legislature as now constituted. In this connection, I desire to call the Department’s attention to the possibility that the American Trade Agreement, signed yesterday, March 28, will probably be among the first matters on the agenda in the ordinary session of the legislature which is to begin April 1. Presumably, approval of this Trade Agreement might constitute a precedent whose value the Haitian Government would not be slow to seize upon.
Mr. Armour has discussed fully in previous despatches President Vincent’s fondness for his policy of presenting faits accomplis; and the present case is decidedly one in point. However, I may venture the repetition that the President’s position would, it is only too evident, become untenable, if, due to the insistence of the Bank upon a change in substance in the contract of May 12, he should be unable to proceed with the contract after he has secured ratification in both houses of the legislature.
[Page 719]I feel sure that the President would be greatly upset at this recent move of the Bank, if the Bank’s attitude is, indeed, that set forth in the telegram quoted above. Mr. Armour has explained the position of the President in his previous despatches, and will no doubt add to the picture he has already given, in his interviews in the Department.
Respectfully yours,
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