838.51/3516: Telegram

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

82. Your 161, December 22, 1 p.m. The Department can well appreciate your concern and that of Pixley at the serious condition of Haitian finances aggravated by the delay in the authorization of a further detax on coffee exports pending the final outcome of Léger’s negotiations in Paris.

The Department’s reluctance to take any steps which might be interpreted as intervention in the domestic affairs of another American [Page 575]Republic is strengthened in this case by its desire to avoid any action which might later be seized upon as an excuse for the allegation that the attitude or acts of this Government were responsible for the collapse of negotiations for a foreign loan for Haiti.

Nevertheless, having in mind its responsibilities towards the bondholders of the 1922 loan7 and more specifically the terms of Article XV of the accord of August 7, 1933, the Department believes that the Acting Fiscal Representative may wish in his own capacity to seek an immediate interview with President Vincent and lay before him as forcefully and clearly as possible the facts and figures of the existing financial situation and the immediate implications thereof.

He may also wish to urge upon the President the necessity for taking the initiative in an immediate general survey of the general tax and budgetary situation with a view to providing additional revenues to replace the yield lost from such detax as may be necessary to start coffee moving and to effecting such economies as may be possible in the more unessential governmental services. In this connection the Department understands that de la Rue, who believes that there is slight possibility of Léger obtaining a loan in Paris, feels that he now should be instructed by the President to return to Haiti to undertake the necessary studies in connection with financial readjustment.

De la Rue is apprehensive that if the situation is allowed to drift, the financial structure of Haiti may be so badly damaged as to result in a complete moratorium. On the other hand, he feels that if salutary measures could be inaugurated immediately it might be possible for Haiti to maintain its debt service as to interest but with a retarded schedule of amortization which would liquidate the loan by its original contract debt of 1952–53.

While the Department shares de la Rue’s views, it obviously cannot suggest to the President any course of action, although it would appear proper for you, in response to an inquiry from the President with regard to financial policy to reinforce such observations as Pixley may make to President Vincent.

If the President desires de la Rue to return, he should be informed at once by telegraph. If he is notified by tomorrow it will be possible for him to reach Port-au-Prince by Sunday by plane.

  1. Loan contract of October 6, 1922, between the Republic of Haiti and the National City Company and the National City Bank, both of New York; for text, see Le Moniteur, Journal Officiel de la République d’Haiti, October 30, 1922; for correspondence relating to the loan, see Foreign Relations, 1922, vol. ii, pp. 472 ff.