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

No. 344

Sir: I have the honor to report that the Department’s telegraphic instruction No. 28 of November 11, was not received at this Legation until the morning of November 12. It not only then seemed impracticable to postpone my engagement with the Foreign Minister, but also I did not consider it advisable to do so: both because the main consideration was to forestall any possibility of M. Léger submitting a draft to me prior to my delivering to him our own draft protocol and note, and also because I felt that it would be more salutary to have him know how we felt about President Vincent’s attitude in the premises.

Accordingly, I called upon him at the appointed time yesterday, and again this morning. The enclosed memoranda and Aide Mémoire from the Haitian Foreign Office will, I trust, give a clear picture of what transpired. The difference between today and yesterday in the President’s attitude, as conveyed to me by M. Léger, is very interesting.

I should like to express my appreciation of the Department’s promptitude in sending the telegraphic instruction above referred to in reply to my telegrams No. 51 of November 9, and 52 of November 11; and the same applies to the Department’s telegram No. 29 of [Page 615] November 12, in reply to my despatch No. 339 of November 6.28 They had the desired effect of preventing any precipitate action on the part of the Foreign Minister and of bringing about a reconsideration of the very casual, to put it mildly, attitude taken by the Haitian Government. As indicated in my brief telegram of this date28a I hope to have the draft protocol and note ready for presentation to M. Léger early next week, and at my conference with him today he stated that he would await their receipt before addressing any further communication to me in the premises.

Respectfully yours,

George A. Gordon
[Enclosure 1]

Memorandum by the American Minister (Gordon) of an Interview With the Haitian Minister for Foreign Affairs (Léger), November 12, 1936

I called upon M. Léger this morning by appointment and spent just short of an hour and a half with him. I told him that I had today received instructions from my Government (Department’s telegram No. 28 of November 11), as the result of which it appeared that within a very few days I should be prepared to submit to him a draft protocol and note as a basis to negotiate an agreement to terminate financial control.

I recalled that when I had seen him some two weeks ago I had told him that the agreement to terminate control had been carefully worked out two years ago and embodied in a draft treaty with annexed letters containing undertakings on the part of the Government of Haiti to confer upon the Bank certain powers and to adopt certain measures of fiscal policy for the purpose of insuring adequate protection for the 1922 bondholders. I said that when Mr. Pixley had told me two days ago that M. Léger had informed him that no trace of these documents could be found in the archives of the Foreign Office or of the President’s Office, I was naturally greatly surprised, to say the least; I had necessarily reported this to my Government which had replied expressing similar surprise that the Haitian Government appeared not to be aware of the terms of the agreement so carefully negotiated between the two Governments two years ago. I said that I thought it would be better to read him my instructions on this point textually, and proceeded to read the pertinent portion of the Department’s telegram under reference.

M. Léger said, speaking very frankly, that he had really been somewhat ashamed to ask me for the missing documents himself and [Page 616] therefore had requested Mr. Pixley to ask me for them. Not having seen letters A and B, which had been agreed upon as constituting annexes to the proposed treaty two years ago, he could not speak with properly full knowledge of the facts, but it had been apparent to him as the result of his conversations with Mr. Pixley that there was considerable misunderstanding in the premises. He gathered from Mr. Pixley and from me that it was proposed to transfer to the Bank substantially the entire Fiscal Representative’s service as it now stood, whereas the desire of the Haitian Government was to begin to build up a permanent Haitianized fiscal service which would have an important portion of the functions now exercised by the Fiscal Representative’s Office, notably the Comptroller’s Service.

Léger said that having nothing in his files to indicate what had been discussed and tentatively agreed upon in 1934, and being sincerely desirous of not repudiating any commitments that might have been made, he had asked the President to tell him just what commitments had been entered into, and the President, in reply, told him that while in 1934 there had been a general agreement as to the conditions under which the control was to be terminated, there had been no definite commitments, and that circumstances having changed in the two and a half years which had since elapsed the President did not consider that the termination of control would have to be effected under exactly the same conditions as had been envisaged in 1934.

In reply I said that I must take sharp issue with this. The agreements entered into in 1934 were in no sense tentative, but were the result of careful negotiation. We had at that time only agreed to abrogate existing treaties, under which obligations had been assumed for the protection of 1922 bondholders, under certain specific conditions which were designed to insure the maintenance of the existing security for the 1922 loans. Nor was there merely a general agreement as to these conditions; on the contrary, they were carefully and specifically set forth in the documents agreed upon at that time. When approached by the Haitian Minister in Washington two weeks ago and formally notified that the Haitian Government desired to proceed with the negotiation of an agreement for terminating financial control, my Government in fulfilling the undertaking entered into by it in 1934 and announcing its readiness to proceed with such negotiation, naturally did so upon the understanding that the Haitian Government, in its turn, would fulfill the undertakings it had given in return for our consent to the termination of control. If President Vincent were now to maintain the attitude that the Haitian Government had made no commitments and was under no obligation to do what in 1934 it had said it would do, why of course we would have no option but to withdraw our consent to the abrogation of existing treaties and the termination of financial control.

[Page 617]

If M. Léger should tell me officially that this was the definite attitude of President Vincent, I would of course report it to my Government, but I could tell him right now, and I was sure he would appreciate the point, that my Government’s reaction would necessarily be most unfavorable, and that my Government would undoubtedly have to take the corresponding attitude which I had just indicated. M. Léger then said that he would be sorry to have me send a report of this nature and he asked me if I would consent to hold up making a report until he had been able to discuss with the President our present conversation. As I thought there was everything to be gained by this, I assented, and I am to see him tomorrow at 11 a.m.

Reverting to what he felt was a definite misunderstanding, Léger pointed to Article 13 of the Bank Contract,29 which stipulates that for its treasury and other services the Bank shall only receive 2% of the gross revenues of the government. As, according to him, the government’s gross receipts were now little in excess of Gdes. 32,000,000, i. e., about $6,500,000, 2% thereof would be but about $130,000. The Bank was already receiving 1% of these gross receipts, and it seemed clear to him that for an additional $65,000, it could not have been contemplated that the Bank was to take over substantially the entire functions of the Fiscal Representative’s Office, which he said was now operating on a budget of approximately $160,000 a year.

Léger then said that he hoped I would give earnest consideration to the Haitian Government’s point of view that it desired to build up a permanent and efficient fiscal service. For Haiti’s own protection—with respect to her credit standing, the possibility of future loans, etc.,—the government wished to ensure just as effective service of the 1922 loans, and as adequate protection of the bondholders, as has existed up to now. He felt that the plan of reorganization of the Bank which he had in mind would bring this about, and he hoped that if he presented a plan which insured the attainment of these two objectives we would not refuse to discuss it, even if it was not just what had hitherto been envisaged.

I pointed out to M. Léger that I had recently seen a memorandum, which Mr. de la Rue had prepared just before leaving here in September, in which he referred to a conversation, or conversations, which he had had with the President, in the course of which the latter had agreed with the idea that for treasury and administrative services the Bank should take 2% of the gross receipts of the government plus such an additional sum as might be necessary to constitute a minimum [Page 618] amount of . . . . . gourdes; the same idea to be applied to the operation of the customs service (2% plus such amount as might be necessary to constitute a minimum of . . . . . gourdes), and to the operation of the internal revenue service (12% plus such amount as might be necessary to constitute a minimum of . . . . . gourdes). At this M. Léger smiled rather skeptically and said that he had not seen anything in writing evidencing any such concrete agreement.

In conclusion M. Léger said that he had naturally wanted to give me his general ideas and to get mine, but up to date we were necessarily talking somewhat vaguely; when we had before us the draft documents, which I had said I would submit to him in the near future, we could discuss with more precision. In the meantime he would let me know tomorrow the result of his discussion with the President of the fundamental points above adverted to.

G[eorge] A. G[ordon]
[Enclosure 2]

Memorandum by the American, Minister (Gordon) of am, Interview With the Haitian Minister for Foreign Affairs (Léger), November 13, 1936

As indicated in my memorandum of yesterday’s interview with M. Léger I called upon him by appointment this morning.

M. Léger said he was sure I would be glad to hear that since I had seen him yesterday they had finally found the documents elaborated in 1934. He said that a perusal of letters A and B had given him great satisfaction because he felt now that we were very close together and that there should be little difficulty in negotiating an agreement to bring about the termination of financial control. The Haitian Government was perfectly ready to stand by everything set forth in letters A and B. He wished, however, to point out that most of those provisions were undertakings to do something in the future, but did not specify just how it was to be done. It was this that he had in the forefront of his mind yesterday when he was saying that there were no commitments on the Haitian side. He was afraid that he had expressed himself badly inasmuch as what he meant was that there were no definite commitments as to just how the functions now performed by the Fiscal Representative’s Office were to be transferred to the Bank—which, as he saw it, was the point as to which there existed at present the most misunderstanding and divergence of views.

He then read me an Aide-Mémoire setting forth summarily the point of view of the Haitian Government, copy and translation of which are transmitted to the Department as enclosures to the despatch to which this memorandum is also an enclosure.

[Page 619]

M. Léger said that he still felt that the new set-up now envisaged by him would insure the fullest measure of protection and security to the 1922 bondholders, and he hoped and thought that we also would feel that it did. After receiving the draft protocol and note, which I told him I now would be in a position to submit to him on Monday or Tuesday of next week, M. Léger said that in the near future he would, by way of comment thereon, or reply thereto, submit to me his proposed plan of organization of the fiscal services in question. As I had indicated, when he had roughly outlined his plan to me orally, Léger admitted that there was some duplication of work in his scheme, but that this tended toward greater protection of the bondholders, and also would achieve his other main objective of building up a Haitianized fiscal service which would be able to continue to operate efficiently after the 1922 loans had been fully retired, instead of merely disappearing when the event takes place.

G[eorge] A. G[ordon]
[Enclosure 3—Translation]

The Haitian Ministry for Foreign Affairs to the American Legation


The Haitian State has never contested the fact that there were negotiations in 1934 with the American Government, nor that there was an agreement in principle on the subject of the conditions under which the Office of the Fiscal Representative would be abolished. The substance of the arrangements agreed upon is to be found moreover, together with the limits which they envisage, set forth explicitly in Article 13 of the Contract of July 8, 1935, for the purchase of the Bank.

The Haitian Government does not intend to repudiate in any way this agreement in principle or the measures agreed upon to be taken as a guarantee to the 1922 bondholders. But the Government holds that the arrangements of which it has just spoken have never implied the engagement on the part of the Haitian Government to transfer the organization of the Office of the Fiscal Representative almost in its entirety to the new Services to be organized in the National Bank of the Republic of Haiti.

The Haitian Government recognizes the very useful and beneficial role that the Service of the Fiscal Representative has played in the financial organization of the Republic; it desires to maintain a similar organization as a permanent part of the financial administration. It intends to create a Service of Control of receipts and expenditures of the Republic of Haiti, by preserving the entire Haitian personnel already trained, and to maintain this new organization with the same attributes as those previously exercised by the Office of the Fiscal [Page 620] Representative, at the same time abolishing, naturally, the right of political control.

In so far as the guarantees to be given to the bondholders of the 1922 loan are concerned, the Government will create the necessary services and organization to satisfy the engagements already undertaken by it, as they are set forth in Article 8 (sic) of the Contract of July 8, 1935, while taking into consideration the limits imposed by the total percentage of 2% of the gross revenue of the Government allotted as a remuneration to the National Bank of the Republic of Haiti by agreement between the two Governments.

  1. Latter not printed.
  2. Telegram No. 54 not printed.
  3. For text of bank sale contract, published with the law of sanctions of March 28, 1935, see Bulletin des Lois et Actes, 1935 (Port-au-Prince, Imprimerie de l’Etat, n. d.), p. 164, or Le Moniteur, Journal Officiel de la République d’Haiti, May 6, 1935, p. 284. For correspondence concerning the sale, see Foreign Relations, 1935, vol. iv, pp. 703 ff.