838.51/3516: Telegram

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

161. My 160, December 21, 1 p.m.1 As indicated yesterday an important step forward has been taken in the solution of Haiti’s problems. All of these are inter-related with respect to the stability of the Government and the country. The economic situation is basic here in this regard.

Pixley2 and his colleagues consider this situation to be verging on the desperate. Until it is substantially remedied the local situation would seem precarious. Everything I hear corroborates this. The second export tax reduction on coffee is being unfortunately retarded apparently through Leger’s3 desire not to make any further change in the tax structure during his negotiations for a loan in Paris. His absence at this time is a great handicap. The first tax reduction of one cent per pound was a disappointment because of delay in decision by the Haitian Government. It would be most unfortunate if the same thing occurred again. According to Pixley and others the further reduction seems more hopeful of result if it can be done immediately since the coffee market has been fairly stable for the past 10 days. Indeed local dealers have assured Pixley that a second reduction will begin to move coffee immediately in volume. As the Department realizes this should revitalize trade generally.

Otherwise Pixley and his colleagues see great difficulties if not disaster ahead. This is the period when the Government normally collects the greater part of its revenues for the year. Yet viewing things as optimistically as possible, Pixley believes that revenues for [Page 574]January will not exceed a million and a half gourdes under present conditions when they should be around 3,500,000. The Haitian Government hopes to begin January with a Treasury balance of some 6 to 800,000 gourdes whereas the normal monthly budgetary requirement is 2,800,000 gourdes. Every practicable economy is being sought. Pixley and I feel that it is not politically expedient for the Haitian Government to reduce its expenditures now or in the immediate future commensurate with the great loss in revenue both present and prospective. Pixley requests that this be communicated to De la Rue.4

Pixley and I continue to be concerned about the Paris loan negotiations. We cannot help but feel that their success would likely mean either a scandalous arrangement for the persons involved or the acquisition by France of a position in Haiti which would be disadvantageous to us in the Caribbean zone, or both. At the same time we realize the delicacy of this matter, unless offering financial facilities ourselves. We hope that consideration may again be given to this either in the manner suggested in paragraph 4 of my 152, December 14, 3 p.m.5 or otherwise. Could we use the agreement of August 7, 1933,6 to afford a way to the use of the American public funds for Haiti and as a reason for this special action in her favor vis-à-vis certain other countries in Latin America which may also be in financial difficulties but which are not in the same strategic Caribbean position?

Mayer
  1. Not printed.
  2. Rex A. Pixley, Deputy Fiscal Representative of Haiti.
  3. Georges Léger, Haitian Minister for Foreign Affairs and Finance.
  4. Sidney de la Rue, Fiscal Representative of Haiti.
  5. Not printed; paragraph 4 reads as follows: “Regarding the Haitian economic situation, is there not some governmental agency, for example the Export-Import Bank, or the Army or Navy, which could contract for the purchase of a sizeable portion of the coffee crop as it becomes available? Something of this sort should be of great encouragement here both financially and in support of the general stability. I have discussed this with Pixley who is in hearty accord with the idea. He as well as I are uncertain as to the practicalities. But in hope something of a similar nature may be practical, we suggest discussion with De la Rue.” (838.00/3383)
  6. Foreign Relations, 1933, vol. v, p. 755.