838.51/3543

The American Minister in Haiti (Mayer) to the Haitian Acting Minister for Foreign Affairs (Alfred)20

No. 13

Excellency: I have the honor to acknowledge the receipt of Your Excellency’s note dated January 11, 1938, describing the financial difficulties which are being experienced by the Haitian Government, due, you state, in large part to the abrupt recent decline of coffee prices in the world markets, the measures the Haitian Government has taken in the hope of overcoming these difficulties, and stating that in spite of these efforts the Haitian Government will not be able during the period January 1–September 30, 1938, inclusive to [Page 591]maintain the essential services of the Government and, simultaneously, the full amortization service on the outstanding bonds of the loan of 1922. In brief, the Haitian Government affirms that it cannot expect to receive more than Gdes. 28,690,000 during the balance of the year and must provide for expenditures amounting to Gdes. 34,023,000.

The Government further states that it has desired to put into effect large economies by a radical tightening of the budget, but that 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 economical situation is easily understood.

There only remains, according to Your Excellency’s 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’s note of January 11th further states that having always met all of its international engagements, it desires to renew in this note 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.

The Haitian Government adds that, therefore, in the case that my 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.

Your Excellency’s note of January 11th continues that 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 [Page 592]times and in the manner provided in the loan contracts and in the bonds for the remitting of interest and sinking fund payments.

Furthermore, during the period January 1–September 30, 1938, the Haitian Government, in its note of January 11th under acknowledgment, 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, in the note above referred to, 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, in the note of January 11th, 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.

In its note of January 11th, the Haitian Government further 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 finally 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 moneys 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 the 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 $20,000 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 [Page 593]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 . . . . . . . nineteen hundred and . . . . . . . . .

Your Excellency was good enough to transmit with your note under acknowledgement the following documents:

(1)
A letter from the Fiscal Representative to the President of the Republic, dated January 7, 1938,21 describing the coffee situation.
(2)
A letter of the Fiscal Representative to the Secretary of State for Foreign Affairs and for Finance a. i., dated January 11, 1938,21 describing the financial situation.

Pursuant to instructions which I have received from the Secretary of State, I now have the honor to inform Your Excellency that I am authorized to sign this Accord on behalf of the Government of the United States. I await, therefore, an indication of Your Excellency’s pleasure as to the time and place for signing the proposed Accord.

Accept [etc.]

Ferdinand L. Mayer

[For the text of the agreement between the United States and Haiti modifying the agreement of August 7, 1933, signed at Port-au-Prince on January 13, 1938, see Executive Agreement Series No. 117, or 52 Stat. 1473. The text of the accord as printed in these sources is identical with the draft included in the document printed supra.]

  1. Copy transmitted to the Department by the Minister in Haiti in his despatch No. 37, January 14; received January 15.
  2. Not printed.
  3. Not printed.