838.51/3543

The Haitian Acting Minister for Foreign Affairs (Alfred) to the American Minister in Haiti (Mayer)14

[Translation]

Mr. Minister: My Government desires to submit to the kind attention of your Government the following facts:

Because of the recent measures taken by the Brazilian Government, reducing the export duties on coffee and decreeing freedom of exchange with regard to the sales of this product, such a weakening in the price of coffee in world markets has been produced that the Haitian economy, strictly dependent upon outlets for this article has been profoundly affected.

The exporters, in view of the low level of the price of coffee, have not been able to offer to the producers a sufficiently attractive price in order to get them to sell their product; the purchasing power of the Haitian people which is based on foreign money coming into the country through the sale of coffee, has been reduced to such a point that the [Page 583]national commerce is languishing in the most distressing stagnation we have ever known, and imports have diminished in considerable proportion.

In order to meet this disastrous situation and create an outlet for coffee, the Government under date of November 27, 1937, issued an order taking off ten centimes of customs duties from exported coffee. Unhappily, despite this sacrifice to which the Government consented, a new variation in price frustrating our efforts has not permitted exporters to offer the peasant fifteen centimes of the gourde per pound, which the peasant considers the minimum required in order that he may undertake to deliver his product, and although small quantities have been shipped, it nevertheless remains that coffee is not being marketed in a manner which can, in any way, be considered as normal.

Meanwhile the receipts have turned almost vertically downward. The Government in order to meet its obligations has had to make use of available resources in the Treasury. Besides, after a careful examination of the situation of the market the Government has come to the conclusion that only an additional detax of five centimes of the Gourde per kilo will enable the marketing of our principal product, and in consequence has decided to issue a decree to this end.

Moreover, the last reports that have been received indicate that by reason of excessive rain during the last three months, the volume of the coffee crop will be considerably less than had been estimated when the ways and means for the fiscal year had been evaluated.

As a consequence of what has preceded, the Office of the Fiscal Representative estimates that export customs duties taking into consideration the detax of 15 cents per kilo mentioned above will be Gdes. 4,129,000.00 less than the amount the ways and means of which had been foreseen in the budget of 1937–38.

The Government on November 11, 1937, increased by ten per cent the amount of its import duties. But even this measure has not had the effect of permitting the treasury to cover its losses resulting from the decrease in coffee prices and the impossibility of finding a market for it. The Bureau of the Fiscal Representative estimates that both because of the decrease in revenues derived from export taxes and because of the smaller value of imports due to the diminishing of the purchasing power of the Haitian people the total revenues of the Government in 1937–1938 will amount to Gdes. 28,690,000.

On the other hand, the budgetary credit opened to the different ministerial departments amounts to Gdes. 32,936,000. The Government by reason of exceptional and urgent circumstances such as the recent international incidents between the Dominican Government and the Republic of Haiti,15 has had to use special credits amounting [Page 584]to Gdes. 127,000, and has authorized an over expenditure of Gdes. 80,000 per month for the Haitian Guard.

To sum up, the Government cannot look forward to obtaining in the course of the present year more than Gdes. 28,690,000 and it has to face expenditures amounting to Gdes. 34,023,000. The Government has desired to put into effect large economies by a radical tightening of the budget, but unhappily even these restrictions will not permit the public treasury to cover the deficit mentioned above and maintain the essential service of the Government of which the importance for the preservation of a stable political and economic situation is easily understood.

There only remains to the Government in these circumstances the alternative of suppressing administrative services essential to public order and economic stability or of asking the American Government to be good enough once more to prove the friendly spirit which it has always shown toward the Republic of Haiti and not to oppose a partial suspension of the amortization of the loan of 1922 during the present fiscal year.

The Haitian Government which has always met all of its international engagements desires here to renew in the most formal manner its most firm decision to honor its signature to satisfy all of its financial obligations and to preserve its credit intact.

Therefore, in the case that your Government, taking into account the good faith of the Haitian Government and the difficult circumstances which put it under the necessity of making this démarche, would be good enough to acquiesce in the above request, the Haitian Government even under the pressure of the great present difficulties agrees to pay regularly the interest on all the outstanding bonds, and as a token of its firm will to honor its signature agrees to make a payment of Gdes. 9.555.55 per month on account of the amortization of the bonds of Series A and Gdes. 1.555.55 on account of the amortization of the loan of Series C during the rest of the present fiscal year.

Inasmuch as certain duties and obligations of the Fiscal Representative are fixed by the provisions of Articles VI and IX of the loan contracts, the Haitian Government obligates itself to bring about the suspension, for the balance of the current fiscal year, of the obligations of the Fiscal Representative under said articles, to the extent necessary, and instead thereof, will authorize for the corresponding period the Fiscal Representative to set aside from the hypothecated revenues the sums required to be remitted for the payment of interest on the said outstanding bonds, as well as for the small token payment into the sinking fund, and to remit the same to the Fiscal Agent at the times and in the manner provided in the loan contracts and in the bonds for the remitting of interest and sinking fund payments.

[Page 585]

During the period January 1–September 30, 1938, the Haitian Government undertakes also to guarantee that there shall be no increase in salaries or allowances paid to Haitian Government officials and employees.

The Haitian Government further undertakes that in the event of a substantial increase of revenues, no increase in the ordinary or general budget will be made until the contractual amortization payment service has been resumed in full.

The Haitian Government further undertakes that extraordinary appropriations outside of the general budget would be restricted to emergencies, duly recognized as such in accord with the Fiscal Representative, during the period of the default.

The Haitian Government agrees that the balance foreseen by the provisions of Article XVI of the Accord of August 7, 1933, to be apportioned by the Haitian Government between the budgets of the various departments, shall be so apportioned between the various departments of the Government as to assure the maintenance of the essential services of the Government.

The Haitian Government declares by these presents its readiness to sign an accord with the American Government as follows:

Accord

The undersigned plenipotentiaries, duly authorized by their respective governments, have agreed upon the following Accord:

Article I

On and after January 1, 1938, and until and including September 30, 1938, all monies received by or for the Haitian Government shall be deposited in the National Bank of the Republic of Haiti to the credit of the Haitian Government with the exception of the five per centum of customs revenues foreseen in Article IX of the Accord of August 7, 1933, and the amounts needed for payments connected with execution of Loan Contracts which payments during the period mentioned shall consist of the amounts necessary to pay the interest on all outstanding bonds issued under the Loan Contracts of October 6, 1922, and May 26, 1925, and $ . . . . . . on account of the amounts required to be paid under such Loan Contracts for the amortization of the bonds, which amounts shall be credited to the Fiscal Representative.

Article II

The provisions of the first sentence of Article XI and the first and last sentences of Article XVI of the Accord of August 7, 1933, to the extent and only to the extent that they may be inconsistent with the provisions of Article I of this Accord, shall be suspended so long as this Accord remains in effect.

Signed at Port-au-Prince, in duplicate, in the English and French languages, this . . . . . day of . . . . . . . . . 1938.

Léon Alfred
  1. Transmitted to the Department by the Minister in Haiti in his despatch No. 37, January 14; received January 15. Also read over the telephone to the Department on the morning of January 12.
  2. See pp. 178 ff.