The Minister in Haiti ( Gordon ) to the Secretary of State
[Received 3:40 p.m.24]
52. My telegram No. 51, November 9, 7 p.m. Léger has now approached Pixley asking him to expedite the plan of organization requested in his letter to the board of directors of the bank. In the ensuing conversation Pixley pointed out that the agreement to terminate financial control had been carefully worked out two years ago and embodied in a draft treaty with two letters to be annexed thereto containing certain undertakings on the part of the Government of Haiti to confer upon the bank certain powers and to adopt measures of fiscal policy for the purpose of assuring adequate service for the 1926  loans.
Incredible as it may seem, Léger replied that he knew of no such undertakings and that he could find no trace of any such letters in the archives of the Foreign Office though the President had told him that he remembered having seen such letters: however, the President appears further, to have told him that there were no commitments and that Léger should proceed to negotiate with me an agreement for terminating financial control; pursuant to such instructions Léger stated that he was drafting for submission to me a plan for transferring certain of the functions of the fiscal representative’s office to the bank (which was why he had approached the board of directors) and hoped to submit it to me in the immediate future.
All of the foregoing unfortunately confirms the penultimate paragraph of my telegram under reference.
Obviously if Léger prepares a plan as a basis of negotiation and submits it to me before I receive the Department’s instruction to submit to him our draft protocol and accompanying note it may only tend to create confusion in points where his draft will differ from ours but will make the Haitians less inclined to accede to our proposals and more disposed to insist on their own. Accordingly I think it will be well when I see Léger who has just asked me to call upon him tomorrow morning to press upon him the fact that the agreement to terminate control was subject to certain conditions embodied in documents carefully negotiated by our two Governments; that as that agreement is now over two years old it was necessary that the draft documents evidencing it be brought up-to-date; that our Government is now engaged in doing this and that in the immediate future I shall submit to him a draft protocol with annexed note (which contains no major changes of substance from the original documents) as the [Page 612] basis for negotiating the formal agreement to terminate control. He probably will then ask me to let him see letters A and B and I see no reason why I should not do so if he does make this request.
I think action of this nature is essential to prevent his submitting a draft to me before I receive the Department’s instructions to submit our draft to him.
It follows from the foregoing that the sooner the Department can reply to my despatch 339 of November 625 and to the further suggested change in article 10 of our note mentioned in my telegram under reference and explicitly set forth in the letter from Pixley enclosed in my despatch No. 342 of November 9,25 so that I can submit our drafts to Léger, the better it will be.
With regard to the point of our satisfying ourselves as to the adequacy of the Haitian legislation to be enacted (covered in the last paragraph of my despatch 339) if the Department concurs in my opinion that we should prepare this legislation it would seem to me that without waiting for this to be physically accomplished the Department could instruct me to submit our draft protocol and note to Léger and to tell him that we propose at the earliest possible moment further to submit to him draft legislation for carrying out the undertakings set forth in this draft note.
I consider it extremely important that we forestall the submission to me by Léger of a draft. It is now apparent that the Haitians will be surprised or at least profess to be by some of the terms of our proposed draft, and we will unquestionably be in a better position to obtain acceptance thereof if they have not already formulated conflicting provisions. For instance the Department’s instruction No. 42326 states that the provisions in articles 2 and 11 of the note concerning percentages plus a minimum were inserted at the request of de la Rue who informed the Department that they are acceptable to the Haitian Government. As far as I know there is nothing in writing to substantiate this and my telegram under reference shows that the Haitians do not appear to be actuated by any such understandings. In fact I am informed that when Léger showed the draft of his letter to the board of directors to empower, the only change the latter made was to insert the following sentence in the paragraph stating that the bank would be allotted 2 per cent of the gross revenues of the republic for its treasury service: “However the Government hopes that the bank will be able to function in such fashion as not to utilize for its expenses the total amount of its treasury commission.” My telegram under reference and the enclosure to my despatch 342 show that the understandings of de la Rue and of the Haitians as to what is meant by the service of the issue of checks are contradictory. Furthermore [Page 613] to all appearances the point of a minimum 60 day period after the signature of the protocol before it becomes effective, although of elemental necessity for making proper transfer arrangements, will come as a surprise to the Haitians.
I think these various considerations clearly show the necessity of the action I have indicated and of submitting our draft protocol and note to Léger at the earliest possible moment.