The Minister in Haiti (Mayer) to the Secretary of State
[Received July 6.]
Sir: I have the honor to refer to my despatch No. 206 of June 20, on the subject of the Franco-Haitian Commercial Agreement. Yesterday a new angle to this matter arose in connection with the question of the deposit of the monies for the reimbursement to the 1910 bondholders.
As I understand it, and as I believe the Department is informed, these monies have remained in New York at the National City Bank against which payment has been made through request of the Banque Parisienne in Paris whenever a bond is presented for redemption. Now, according to the Minister for Foreign Affairs, the French Government appears to make it one of the conditions of the new Franco-Haitian commercial convention that these monies should be transferred from the National City Bank to the Banque Parisienne in Paris. Mr. Pixley, to whom along with myself M. Léger has communicated this statement, feels that this effort on the part of the French Government to have the redemption fund deposited in Paris would not only be most unwise for the Haitian Government, but subject the fund to such pressure in behalf of these 1910 bondholders who are trying to get extra payment on a gold basis that agreement on the part of the Haitian Government to the proposed transfer of the funds would operate disadvantageously for Haiti as well as for the 1922 bondholders. Mr. Pixley has in mind that the Banque Parisienne being in possession of the fund might be “forced” by French Government influence to pay several of the bondholders at the gold franc rate. This, according to Mr. Pixley, would dissipate the entire fund leaving nothing to pay the rest of the 1910 bondholders. Further “squeeze” would result both actually and metaphorically to the end that Haiti’s assets would be diminished by that much to the detriment of the 1922 bondholders. In other words Mr. Pixley is rather suspicious that this new move on the part of the French Government is another flank attack on the 1910 bondholders gold franc payment question and should therefore be prevented. As a matter of fact, the Minister of Foreign Affairs and Finance expressed himself in no uncertain terms to me the other day on this subject, feeling that the French were trying at the last moment to strike an extremely hard bargain both in this relation and in respect to certain other details.[Page 612]
In my conversations with Mr. Pixley on this subject I have kept continually in mind and repeated to him the Department’s telegram No. 45, June 15, 7 p.m. Mr. Pixley is fully aware of this and in entire ageement he has adopted the same position repeatedly with M. Léger and has communicated to him the following letter which he prepared in collaboration with the Legation.
“June 20, 1938.
“Mr. Secretary of State for Finances,
“I have in my possession your letter of June 8, 1938 concerning the project of the Franco-Haitian commercial convention. I note that you have proposed various [modifications?] in this convention, but that these modifications are not considered by you as essential, and that if the French Government refuses to sign unless the original text be accepted you propose to accept this text. These modifications seem very desirable and I hope that you will be able to obtain their acceptance.
“I would add to the projected modifications in the Accord suggesting that Article 10 be eliminated or modified in a manner so that it would become inoperative if sacks come to be made in Haiti with sisal. I am informed officially by a firm established in Haiti that it is carefully considering establishment of a sack factory which would use short fibered native sisal. The information has been given me confidentially but I think that it should be divulged inasmuch as in the Accord it is intended to purchase 200,000 sacks a year in France.
“In discussing this matter with you I believe I understand that no mention is to be made in the Convention or any subsequent Accord of the question of the loan of 1910. If this is the case in the subject of your letter, I take pleasure in informing you that I give my accord to this Convention.
“Agree Mr. Secretary of State, to the assurance of my distinguished consideration,
Deputy Fiscal Representative.”
According to the Minister of Foreign Affairs, on the 22nd instant, the Convention was to be signed that day. It, of course, makes no mention of the 1910 loan question nor of this matter of the deposit of the redemption fund, as this was to be handled we learned, in a supplementary arrangement. The object of Mr. Pixley’s latest representation, as contained in his letter to the Minister of Foreign Affairs and Finance, quoted above, is to take every precaution that the Department’s instruction No. 45 will be carried out, and that in any supplementary arrangement in connection therewith no mention will be made of the 1910 loan which would appear necessary if the redemption fund is to be handed over to the Banque Parisienne as a part of the price of the new Franco-Haitian Commercial Convention.