[Enclosure—Translation]
The Haitian Minister for Foreign Affairs
(
Leger
)
to the American Minister (
Gordon
)
Port-au-Prince
, May 31,
1937.
Mr. Minister: I have the honor to
acknowledge the receipt of your communication dated December 21,
1936, as well as of the memorandum and the six aide-mémoires
31 which accompanied your
despatch.
You have been good enough to note the agreement which exists between
your Government and the Haitian Government with regard to the text
of the proposed protocol transmitted by Your Excellency the 18th of
November, 1936, and to express the sentiment that the several points
with regard to the proposed note which would form part of the
protocol, and concerning which disagreement persists, do not seem to
you to be important points nor to raise difficulties of a kind to
prevent the conclusion of a final agreement. In this connection, you
have gone on to show that when the question of the purchase of the
National Bank of the Republic of Haiti by the Haitian Government and
that of the termination of financial control in Haiti were raised in
1934,32 the tacit or actual intention expressed by the two
Governments, as this is understood by the American Government, was
that the essential services of the office of the Fiscal
Representative should be transferred to the National Bank of the
Republic of Haiti. Your Excellency adds that although there have
been changes in the personnel of those who were the negotiators in
1934, its common intention has remained unchanged and consequently
your Government believes it necessary to record in writing certain
obligations of the Haitian Government which, according to Your
Excellency, although they were assumed verbally are nevertheless in
existence.
It is scarcely necessary to say that the Haitian Government does not
intend to escape from any obligations it has taken, but, since Your
[Page 541] Excellency has wished
to recall from the beginning of your communication of December 21,
1936, the circumstances which surrounded the negotiations of 1934,
and the conditions which, according to what your Government
understands, were determined upon with a view to the purchase of the
National Bank of the Republic of Haiti and of the termination of
American financial control, I take the liberty of setting forth the
viewpoint of the Haitian Government in this regard.
The purchase of the National Bank of the Republic of Haiti was
effected by the Haitian Government at the price of a very great
sacrifice considering the financial resources of the Republic. The
goal which the Haitian Government aimed at in making this purchase
was that it might be enabled to put an end to the financial control
of the American Government in Haiti. The Haitian Government indeed
consented to accord reasonable guarantees to the holders of the loan
of 1922, but it never entered its mind to substitute purely and
simply the control of these bondholders for that of the American
Government. The conversations which took place between the
representatives of the two Governments with regard to the extent of
the new control to be organized in favor of the bondholders in the
National Bank of the Republic of Haiti, ended with the drawing up of
a draft letter and of a memorandum, the text of which was
satisfactory to the two high contracting parties. The signature of
these drafts has been deferred only by reason of the fact that
delays occurred in concluding and putting into force the final
contract of purchase of the National Bank of the Republic of
Haiti.33
The Haitian Government believes and supports the contention that this
proposed letter and proposed memorandum of 1934 are the final
results of the conversations of 1934. Your Excellency, moreover, in
the aide-mémoire which you kindly
communicated to me November 18, 1936, recognized explicitly that the
American Government for the past two years has at all times been
disposed to sign these agreements only with the modifications which
would bring them up to date.
The Haitian Government believes that there should be no question now
of modifying these drafts in the sense of an aggravation of the
conditions of control granted to the bondholders. From May 1934 to
date the debt of the Republic of Haiti has considerably diminished,
the Series B bonds of the loan have been entirely paid off, thus
relieving the budget of the Republic of quite a heavy annual charge
and rendering more certain the situation of the creditors of the
State; it seems therefore that in all logic, if changes have to be
made in the documents of 1934, these should be rather in the sense
of a relief from the proposed control.
[Page 542]
Now it is indisputable that the new texts proposed by Your Excellency
constitute an aggravation and an extension of the rights of control,
already very large, which the Haitian Government has accepted to
give the bondholders, and which had been agreed to by your
Government.
Notably the obligation which your Government desires to impose on the
Haitian Government of obtaining the previous agreement of the Bank
as to the availability of funds before opening supplementary or
extraordinary credits is a new addition to the draft agreement of
1934 and an aggravation of that agreement. Since the Haitian
Government undertakes not to open credits unless funds are
available, it is certain that it will take care to assure itself,
before opening any credits, that funds are available, but it does
not intend to find itself under the obligation of having to obtain
the agreement of the Director of the National Bank of the Republic
of Haiti in such circumstances. Such an obligation, if it were
accepted by the Government, would perpetuate practically the same
situation created by the Agreement of August 7, 1933.
I permit myself once more to remark that the texts of 1934 in no wise
imperil the interests of the bondholders for, if the Government
should forget itself by taking credits when no funds existed, the
Bank could always refuse to issue the checks. Your Excellency has
kindly expressed the satisfaction of the American Government with
the Haitian Government in the counter-project which it has submitted
retaining what Your Excellency denominates the essential phrase of
Article 10 as follows:
“It (the Bank) would also have the duty of
informing the Secretary of State for Finance of any error
which might creep into an order sent to it for payment or in
the documents of justification which accompany this
order.”
Your Excellency thinks that the Ministry of Foreign Relations will
agree that such a stipulation calls for the installation in the
National Bank of a “Service of Prior Examination (Controle) of Government Payments”, of a “Service of Public
Accounting”, as well as of a “Service of Issuance of Checks”, all of
these things which are stipulated in the first phrase of Article 10
of the project proposed by your Government.
I regret that I am not able to give the agreement of my Government in
this matter. The Haitian Government does not believe that in order
to enable the Bank to point out “any error which might creep into an
order for payment”, it ought to be necessary to transfer to the said
Bank the complete financial organization of the Republic of Haiti.
Most of the work, in the opinion of the Haitian Government, should
be performed by the permanent cogs of the machine of the [Page 543] public finance organization in the
Republic of Haiti, such as these cogs are at present organized,
which cogs should be retained in the Service of Receipts and
Disbursements of the Republic to be created in accordance with the
plan which I have had the honor to submit to Your Excellency. The
control which the Bank is called upon to make in the interest of the
bondholders, would be in this case only one of ultimate control as
to the regularity of the documents and would demand only a limited
personnel, this personnel in accordance with the Haitian
Government’s project would always have the right of access to and of
inquiry in the permanent Services created by the Haitian
Government.
Here again I permit myself to insist on the fact that the Haitian
Government proposes to rest upon the text which was agreed upon in
1934, and that it does not seek consequently in any way to modify
the conditions mutually agreed upon between the parties for the
termination of financial control by the American Government in
Haiti.
The Haitian Government willingly gives its consent to the desire of
the American Government to see the laws voted by the Haitian
legislative chambers which would complete the protocol and the
proposed note. The Haitian Government notes with regret that your
Government considers that the three proposals submitted to it are
based on concepts which the American Government considers different
from those which had been envisaged in 1934 and which are those on
which the agreement of the American Government for the termination
of American financial control had been based. I must not fail to
remark, however, that these drafts which I have had the honor to
submit to you are the only ones which permit the strict application
of the texts of the agreement of 1934 as well as the 2% recognized
as due the Bank by the Contract of July 1935. It is evident that the
two Governments were not parties to the Contract of Sale of the
National Bank of the Republic of Haiti signed July 8, 1935, but it
remains true nevertheless that the conditions of this Contract were
determined upon with the approbation and under the good offices of
the American Government. The Haitian Government was therefore right
to think that the precise stipulations in Article 13 of the Contract
of July, 1935, could be considered as definite and all the more so
since these same stipulations were reproduced in the drafts of 1934
decided upon between the Governments. Nevertheless the memorandum
which Your Excellency has kindly submitted and which the Haitian
Government has studied with greatest interest—a memorandum which
shows, as your Government conceives it, the nature and extent of the
control to be granted the Bank—implies necessarily the modification
of the conditions agreed upon in 1934 and which appears in the
Contract of Sale of the National Bank of the Republic of Haiti. The
2% which had [Page 544] been foreseen
as the Bank’s commission is very evidently insufficient to take care
of a budget which would necessitate an organization of the sort
proposed by Your Excellency, and if such a plan were to be adopted
it would be necessary either to increase the 2% directly or, as Your
Excellency suggests, indirectly, by giving the Bank a guaranteed
minimum commission which would greatly exceed the probable yield of
a 2% commission.
The Haitian Government does not deny the friendly spirit with which
the American Government has treated the different problems arising
out of the liquidation of the Treaty of 1915.34 It hopes the American Government on its side
will realize the sincere desire which the Haitian Government
manifests to give all possible appeasement to the bondholders of the
loan of 1922. The Haitian Government believes that it is possible to
guarantee entirely the rights of these bondholders by holding to the
terms of the conditions agreed upon in 1934 and which have been
accepted by the American Government. The proposals which it has
formulated and which I have had the honor to submit to Your
Excellency have as a basis these proposed agreements of 1934. The
Haitian Government, if the American Government has modifications to
propose to these projects, will be happy to examine them in the
highest spirit of conciliation and it remains persuaded that a
common examination of these projects will achieve a solution giving
full satisfaction to both Governments.
Accept [etc.]
