838.51/3485: Telegram

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

121. During conversation with the Minister for Foreign Affairs this morning I inquired regarding the progress of his loan negotiations. (Department’s 59, November 17, 4 p.m.)

Leger said that he had explained the matter to the Department as fully as he knew at the time. He was glad, however, to give me the following further information which he had written to De la Rue and assumed had been communicated by the latter to you.

This new French loan idea originated in a visit here of a French engineer at the Entreprise Lajoinie who was introduced to Leger in a letter from “his good friend” the French Minister at Ciudad Trujillo recommending this engineer highly and saying that he had the backing of the French Foreign Office. This letter dated October 16 was shown to me by Leger. The matter then proceeded to a point of a firm offer being about to be sent to Leger when difficulties arose, according to him, through French apprehension of the Haitian-Dominican affair. Now, however, as I indicated later in this telegram this obstruction seems to be removed. (There seems to be a certain contradiction in the attitude of the Haitian Government in regard to the Haitian-Dominican affair and the fact that apparently this no longer is considered an obstacle to the French loan.)

The loan in the amount of some $20,000,000 is to come from moneys in the possession of a semi-official French institution which originated after the war as a depository for certain funds. As there is no employment locally for these funds the French Government is glad to have them used for the present purpose and the French Foreign Office has approved the same. The issue price will be around 95 and the interest rate apparently quite satisfactory. Leger said nothing regarding the duration of the loan. As the French authorities do not wish to appear in the matter the money will be loaned in the first [Page 557] instance to Barclays Bank who will in turn loan the money either directly to the Haitian Government or through the Entreprise Lajoinie. Leger was a little vague about this point. There is no question of customs control which apparently had not been requested. The guarantee demanded by the French was a continuation of the National Bank of Haiti’s present position with regard to Government funds. Leger felt that eventually some form of foreign overseeing would be requested in the bank on behalf of the creditors. This Leger hoped could be worked out by appointing an American, preferably De la Rue himself.

Leger added that he had recently received a cablegram from Paris that a firm offer had been mailed to him November 18. Upon its receipt (if it is satisfactory) he will at once fly to New York, meet De la Rue, apparently discuss the matter further with the Department, sail to France accompanied by De la Rue to settle and sign the loan contract.

Leger admitted that the matter seemed to him most extraordinary and miraculous. I indicated discreetly that his own prestige as well as that of his Government was involved in this affair (having in mind the Debalway [Debachy] affair)45 and that I had not previously encountered French, or indeed any other, financiers in the role of Santa Claus. Leger agreed to all of this but still felt that remarkable as it was the loan was assured and that everything would work out beautifully. He thought that a loan at this time would be exceedingly helpful not only for Haitian economy but with regard to the Dominican affair.

Mayer