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

No. 482

Sir: I have the honor to amplify as follows my telegram No. 14 of this date.

I called upon the Foreign Minister this morning to inquire concerning Franco-Haitian commercial treaty negotiations, stating that I had been informed that more conciliatory instructions had lately been received by the French Minister, and that consequently negotiations were now going ahead on a basis more favorable to Haiti; that I had also been informed that a modus vivendi pending the consumption of these negotiations would probably be signed today.

M. Léger confirmed this information and stated that as a result of an instruction received yesterday by the French Minister clearing [Page 564]up the last point at issue, an exchange of notes had been signed today effecting the modus vivendi in question, according to the terms of which France gives Haiti a quota of approximately 37,000 sacks of coffee to be shipped from here between now and September 1,—the original French proposal for a Haitian coffee quota was predicated upon Haitian coffee stocks in Havre, which of course was not of much interest to the Haitian government. The French receive straight minimum tariff treatment, and in the exchange of notes there is no mention of an avenant or of specific tariff reductions for additional non-specialty articles (see my despatches Nos. 447 of March 16 and 453 of March 2463).

The terms of the modus vivendi will be published in an official communiqué to be issued this afternoon.

M. Leger further informed me that the Haitian and French governments are now quite close together on all important points of the forthcoming commercial agreement, though he anticipates that the treaty will not actually be signed for a month or more because, he said, if he might speak confidentially, “the French are such terrible skinflints (grippe-sous)”.

The basis of the new treaty will be a Haitian coffee quota of some 150,000 sacks, with an additional approximately 6,250 sacks for every one million francs worth of French imports into Haiti above a minimum importation by Haiti of ten million francs worth of French goods annually. In this connection Léger said that as Haiti had practically never imported less than ten million francs worth of French goods annually, even when the franc was around 15 to the dollar, he thought there was little chance of this amount of imports proving artificial—i. e., more than the Haitians needed to, or normally would, import—now that the franc was getting nearer to 25 to the dollar.

Another point on which he had had trouble with the French was with respect to Haiti’s purchases in France of material for public services. In the earlier stages of the negotiations the French had tried to obligate Haiti to purchase nearly ten million francs of such material annually, which Léger had flatly refused; negotiations now concern a figure of below two million francs annually.

In reply to my question as to what he proposed to do concerning the percentage of coffee to be shipped to France in French bottoms, Leger replied that in this connection, as well as with respect to the question of Haitian purchases of French coffee sacks, he did not feel that he could insist on less than the French had had by the exchange of notes and so called gentlemen’s agreement of 1935 (restoring the lapsed treaty of 1930 and avenant of 1934), but that he had not agreed to anything above those quantities, and he felt that the French would [Page 565]be satisfied therewith. I may parenthetically observe here that I do not see why M. Léger should not attempt to get better terms at least with respect to the purchase of French coffee sacks, inasmuch as I understand that the local coffee merchants have been very dissatisfied with this provision of the 1935 exchange of notes, feeling that the price of French jute coffee sacks is much too high.

Turning to the question of the French 1910 loan claim, Leger recalled that in one of our first conversations after he came into office he had told me that while he would not consent to submit this claim to arbitration or to the Permanent Court, or to make any substantial compromise payment, he would make a “symbolical” payment if that would dispose of the matter (see my telegram No. 46 of October 27, 193664). He said he wished now to tell me a little more fully what he had had in mind. The interest collected on 1910 loan bonds of holders who had refused to take paper francs for their holdings amounted to some $521,000. Léger’s idea was to pay ten million francs—approximately $448,000 at present rates of exchange—out of this fund to French claimants if this would dispose of the case once and for all. He felt that a settlement of this nature would be the only kind of an arrangement which would not admit the principle that the Haitians were obligated to pay the 1910 loan in gold.

He had not made such a proposal to the French Minister here, but he had let him know that certain Frenchmen interested in the claim had proposed such a scheme and that he, Léger, did not disapprove thereof, so that if the French Government wished to propose such a measure to him as a way of settling the 1910 claim he would be disposed to agree thereto; the French Government, through its Minister here, had replied that any such idea was entirely unacceptable. However, said Léger, the French had abandoned their last year’s position that they would refuse to proceed with negotiations for a new treaty until the Haitian Government had made a concrete step toward settlement of the 1910 claim, and had proceeded with negotiations which now were nearing consummation; consequently Léger said that he wouldn’t be surprised if eventually the French did agree to such a proposition. Even if they did, Léger concluded, he said he had made it clear that the Haitian treasury at present had no cash to pay even this relatively small amount, and he did not intend to do more by way of covering this obligation, if it were incurred, than to give five or ten year bonds carrying 4% interest.

My final comment on the above would be, first that I do not consider that Leger’s argument that a settlement of this nature would not constitute an admission of the claim of principle that the 1910 bonds are payable in gold, is at all convincing; and, secondly, that Léger’s [Page 566]other argument stops far short of its logical conclusion: i. e., if the French, after very categorically stating that they would not, have proceeded with negotiations for a commercial treaty without the Haitians taking any steps whatsoever towards settling the 1910 claim, it seems clearly to mean that the French made their bluff and it was called, and that therefore all the Haitians have to do is sit tight in confident expectation that the French will not be likely to venture the same bluff a second time. I understand that the 1910 bonds continue to come in steadily so that in the near future those still outstanding and represented by active claimants of gold payment will total a relatively small amount. M. Léger of course is equally aware of this, so that it would appear that he is prepared to give away something for nothing—at least as far as the Haitian Government is concerned.

Respectfully yours,

George A. Gordon