The Chargé in Haiti (Finley) to the Secretary of State

No. 503

Sir: I have the honor to report that I have only today received from the Fiscal Representative’s Office copies of correspondence which has recently taken place with regard to a case in Paris in which one, Moulin, appointed a sequestrator by a French court has been directed by that court to present five hundred 1910 Haitian bonds to the Banque de I’Union Parisienne for redemption in depreciated francs under a reserve that a future claim may be lodged for the difference between that value and the value of the bonds on a gold basis. The Fiscal Representative’s Office, as the Department will observe from the enclosed copies of the correspondence exchanged,67 brought this matter to the attention of the Secretary of State for Finance who, in his reply of June 7, 1937, reaffirmed the position taken by the Haitian Government in the Cahin case (see this Legation’s telegram 136 of December 9, 12 noon 1933,67 and subsequent correspondence) that: “The Haitian Government perceives no reason to modify the original arrangement made for the advance redemption of the bonds of the 5% 1910 loan of the Republic of Haiti and under which the bonds have been presented for redemption during the last ten years, and continue to be presented …”68 The Secretary of State for Finance has accordingly authorized the Fiscal Representative’s Office to telegraph as follows to Mr. Hartford Beaumont of the firm of Shearman and Sterling in New York, lawyers for the National City Bank:

“Referring to new presentation Haitian 1910 bonds for encashment in depreciated French Francs under reserve of future claim for balance gold Francs Haitian Government does not feel it can depart from position set forth in letters dated July 3, 1933 to City Bank New York and Banque de l’Union Parisienne Paris to wit that Government sees no reason to modify arrangements originally made for redemption stop Accordingly City Bank France should instruct Banque de I’Union Parisienne to refuse payment under such reserve.”

The Department’s particular attention is invited to the statement contained in Mr. Beaumont’s telegram to the Fiscal Representative dated June 5, 1937,67 wherein he gives his opinion that the refusal of the National City Bank in Paris to redeem these bonds under the specified reserve may result in the attachment of the Bank’s account with the Banque of France as happened in the Cahin matter in 1933. [Page 569]Mr. Beaumont goes on, however, to say that he presumes that the National City Bank could have this attachment vacated.

Respectfully yours,

Harold D. Finley
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