838.51/3537: Telegram

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

7. From the Under Secretary. Please inform Mr. de la Rue that I am appreciative of his desire that a law be voted as soon as possible by the permanent legislative committee authorizing his office not to transfer the contractual sinking fund payment already set aside for January 15. It has seemed to me desirable however that the Foreign Bondholders Protective Council be advised in advance of signature of the accord of the proposal to suspend sinking fund payments except for the token payments. This organization was established on the initiative of this Government in order to be helpful in situations similar to that now confronting Haiti.18 The Department upon learning of prospective defaults either in whole or in part on debt service by foreign governmental entities has, since the formation of the Council, expressed the hope to these governmental entities that they will discuss their proposals with the Council prior to taking action in order that the Council may give such advice as it sees fit in the interest of bondholders. Moreover, in the case of Haiti this Department has particular responsibilities to the bondholders which makes it particularly desirable that the Council be consulted in advance of the prospective action that the Haitian Government desires to take.

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I am advised that the Minister of Finance will consult with the Council tomorrow, and, I am hopeful that by tomorrow afternoon I shall be in a position to authorize the exchange of notes and the signature of the new accord. [Welles.]