The Chargé in Haiti (Finley) to the Secretary of State

No. 231

Sir: I have the honor to refer to the Department’s telegram No. 60, July 8, 7 p.m. (1938), concerning the recently concluded Franco-Haitian Commercial Convention and its annexed Protocol of Signature, and to transmit a copy of the aide-mémoire I left with Secretary for Foreign Affairs Léger on July 9, as well as a copy and translation of an aide-mémoire which he handed me on July 11, 1938, concerning this subject. My telegram No. 81 of July 9, 1 p.m.,45 reported the conversation of July 9. The text of the Convention and Protocol as published in the French Journal Officiel on June 26, 1938, has been received under cover of a letter from Mr. Chapin.46

. . . . . . . . . . . . . .

The Legation believes that M. Léger is truthful when he stated that he did not know, until after the convention had been signed, that it would be accompanied by any document so formal and so closely linked to the convention as the protocol of signature. As soon as he heard this, he recalled Chatelain. He then devoted all his energies to keeping the protocol secret.

Either the French would not listen to Chatelain—or Chatelain, angry at his recall, may have failed to carry out the instructions which were given him in this sense. The Quai d’Orsay may have wished to disturb Haitian-American negotiations for a public works contract. M. Léger and the French Government may still have some scheme in mind for the entry of French interests into the Haitian public works field. In any event, the protocol was published in Paris.

In spite of M. Léger’s seeming embarrassment at the denouement, … his local position was not as bad as could have been expected. [Page 617] He could point to the fact that almost simultaneously, he had been able to settle the French commercial question and obtain $5,000,000 for Haiti from the United States. The Legation’s feeling is that M. Léger believed he was playing a very astute game and that in spite of difficulties which have arisen or may arise, he has won the game.

It was inevitable, therefore, that M. Léger’s aide-mémoire in reply to the observations of the Department (Department’s telegram No. 60, July 8, 7 p.m.) would be casuistic and specious. I venture to think the Department will share our view that it is that.

First, it hardly seems that, in the protocol, the Haitian Government has only assumed the two obligations which M. Léger specifies; it would seem that in addition the Haitian Government has formally accepted the scheme whereby the proceeds of the surtax are to be distributed to the 1910 bondholders. The acceptance of such a scheme seems to us to imply that the Haitian Government recognizes that something is due the bondholders. It also seems evident that this can be and will be construed as a recognition of the 1910 gold claim.

The Legation does not venture to guess how serious this tacit admission of the 1910 claim may be, but it supposes that it will be of consequence to the 1922 bondholders as well as to the Export-Import Bank.

With regard to the provision in the protocol that the 1910 redemption fund be transferred from New York to Paris, it is supposed that appropriate steps can be taken to prevent this transfer—the more particularly since we are now assured by M. Léger that the transfer is not contemplated.

Mr. Léger’s argument that no declaration of the final settlement of the 1910 matter could be included, and still satisfy the desires of the American Government, seems specious to a degree. Our desire was that the 1910 claim should not be recognized by Haiti. Haiti seems in the protocol to have done so, against our wishes. If the claim was to be recognized in spite of our objection, it would certainly have been desirable to have included a final declaration of clearance.

In view of this, there would seem to be no definite assurance that “legally and in fact, the 1910 matter has disappeared from the Haitian financial horizon”, or that the French Government will not continue to support the 1910 holders as opportunity presents. Will not the holders who have already redeemed their bonds press for a share in the distribution of the surtax?

The Department may wish, in its reply, to take note of Léger’s profession to me that the Fiscal Representative had no right under the 1933 Agreement47 to grant or withhold his approval of the Convention [Page 618] on any other grounds than the reduction in customs duties (see my telegram No. 81, July 9, 1 p.m.48).

The text of the new Convention was published in Haiti-Journal yesterday afternoon. M. Léger informed me that the protocol would not be published. It appears, however, that the contents of the protocol are substantially known here for in Le Matin of July 11 there appeared the following article:

[Here follows translation of article.]

With reference to the telephone conversation on July 12 between Mr. Duggan49 and the Legation, Minister Lescot50 was found almost immediately and agreed to return to Washington at once. He then went to the Palace to report his intention to President Vincent. It is believed that a long conversation between the President, M. Léger and M. Lescot ensued. Several hours later, M. Léger called on Mr. de la Rue.51 According to the latter, M. Léger stated that he had tendered his resignation to the President. The President, however, stated that, through M. Lescot, he had given assurances to Mr. Welles that the 1910 matter would not be mentioned in the French Convention. The President, according also to the same source, felt that he was equally to blame with Léger, and begged Léger not to resign.

Meanwhile, the Haitian Legislature has been called into special session on July 25, 1938. According to newspaper comment, it will take up the revised budget and ratify the Franco-Haitian Commercial Convention. M. Léger informed de la Rue (according to the latter) that he had no intention of submitting the protocol for ratification. He had informed the French Government of this intention, and has thus far received no expression of objection.

Respectfully yours,

Harold D. Finley
[Enclosure 1]

The American Legation to the Haitian Ministry for Foreign Affairs


From the text of the Franco-Haitian Commercial Convention published in the French Journal Officiel of June 26, 1938, it is clear that the financial clauses relating to the 1910 loan controversy—contrary to the expectations of the United States—are embodied in a Protocol of Signature forming, apparently, an annexed document to the Convention if not, in fact, an integral part thereof.

[Page 619]

The United States Government has been disappointed that, despite assurances to the contrary, mention has been made of the 1910 loan claims in the Protocol of Signature, and it has been somewhat disturbed at the situation thus brought about, particularly since the financial clauses referred to stipulate the transfer to a bank in France, where they are apparently subject to French jurisdiction, of funds which the United States Government and the Haitian Government have always considered formed a just and full tender of settlement to the outstanding holders of the 1910 bonds.

Irrespective of the implied renunciation of this principle that the original tender was a just one, the United States Government notes that the new convention does not appear to contain any guarantees either to the effect that the funds to be transferred will not be impounded or even that the payment of 500 francs per bond plus the scrip for $26.00 will constitute a definite and final settlement of the claims of the 1910 bondholders.

Attention is also invited to the fact that the position occupied by the 1922 loans, whose issuance was originally made contingent on assurance that full and equitable tender of settlement had commenced for the outstanding bonds of the 1910 loan, may possibly be impaired by the operation envisaged.

The United States Government will be pleased to receive at an early date from the Haitian Government an indication as to the policy it intends to pursue with respect to the above observations.

[Enclosure 2—Translation]

The Haitian Ministry for Foreign Affairs to the American Legation


The Protocol of Signature published in the French Journal Officiel of June 26, 1938, charges the Haitian Government with two obligations:

The agreement to accept, in spite of the terms of the Commercial Convention, the imposition of a surtax of 22 francs (which eventually may be raised to 24 francs) per quintal of Haitian coffee imported during a period of not to exceed 15 years.
The engagement of the Haitian Government to transfer to the Banque de l’Union Parisienne the necessary funds to permit the reimbursement of the 1910 bonds in circulation at the rate of Frs. 500 per bond.

The other provisions of the Protocol interest only the French Government and the Banque de l’Union Parisienne.

[Page 620]

The Haitian Government had not failed to inform the American Government of the arrangement in course of negotiation between the French Government and itself, relative to the surtax of Frs. 22., and had let it be understood very clearly that from all the evidence this arrangement will have to be consecrated by a written document of some sort, an exchange of letters, or otherwise.

Desirous of meeting the points of view of the American Government on this subject, the Haitian Government had given precise instructions to its Minister in Paris that in no case was there to be recognized or mentioned the gold claim produced by the French Government in the name of the bearers of the 1910.

The Haitian Government recognizes without difficulty—in regretting it—that there would have been more conformity in the assurances it had given if the arrangement in question had not been the object of so formal a document and one so intimately linked to the convention as the Protocol of Signature, but it hopes that the American Government will agree with it with respect to the happy results of the efforts exerted by the Haitian Government in order to give satisfaction to the Department of State in the essence of the matter because not only does no clause of the Protocol imply the recognition of the French gold thesis but also there is no specific allusion made to the existence of this claim.

In so far as concerns the obligation to transfer to the Banque de l’Union Parisienne the sums necessary to redeem the 1910 bonds at the rate of Frs. 500 per bond, at bottom no new obligation is assumed by the Haitian Government, and it is only the logical consequence of the decision to redeem the 1910 loan.

The American Government expresses its anxiety with regard to the subject of the possibility of seeing opposition practised with respect to the funds which might have been deposited in France by the bearers who might not be satisfied with the arrangement concluded between the French and Haitian Governments. The Haitian Government is happy to be able to give the necessary appeasements to the American Government. In fact, following démarches made to the French Government by the Haitian Minister at Paris, the French Government has indeed declared that it does not insist essentially on the material transfer of funds—that the remittance foreseen in paragraph 4 of the protocol may be considered theoretic; that it will suffice that the Banque de l’Union Parisienne is, if that is necessary, able to effect redemptions in mass, something that could be regulated by an agreement from bank to bank by means of the opening of a credit or otherwise. It therefore remains understood that the funds will not be transferred to France in advance of the redemption of the bonds. The Haitian Government, as soon as the publication of the Franco-Haitian commercial [Page 621] convention in the Moniteur has occurred, will give precise instructions in this sense to the National City Bank.

The American Government notes that the Protocol of Signature contains no declaration that the arrangement arrived at constitutes a final liquidation of the claim of the holders of the 1910. The Haitian Government, in its desire to meet the views of the American Government, having refused in the course of the negotiations to take into consideration any explicit recognition of the existence of the claim of the 1910 holders, it was difficult to have included a declaration of the definitive liquidation of this controversy. However, legally and in fact, the arrangement makes the claim completely disappear—a claim, moreover, which was not annoying except in so far as it received the support of the French Government.

In so far as concerns the position of the holders of the loan of 1922, the Haitian Government thinks that far from being weakened by the arrangement mentioned in the Protocol, it has, on the contrary, been fortified. In fact, the menace which the claim of the 1910 holders constituted—supported by the French Government—disappears from the Haitian financial horizon. The American Government will understand that it would have been impossible indefinitely to resist the demand of the French Government to submit the controversy which existed between the two Governments with respect to the 1910 loan to an international jurisdiction; it is scarcely necessary to underline the expenses, the risks and the publicity which would have resulted from this procedure. This menace has definitively disappeared.

Moreover, this arrangement has permitted the conclusion of the Franco-Haitian convention whose tonic effect on coffee prices in Haiti has been immediate. Whatever enriches the Haitian national economy can only render more certain the guarantee of the holders of the 1922 loan.

  1. Not printed.
  2. Selden Chapin, of the Division of the American Republics.
  3. Signed August 7, 1933, Foreign Relations, 1933, vol. v, p. 755.
  4. Not printed.
  5. Laurence Duggan, Chief of the Division of the American Republics.
  6. Elie Lescot, Haitian Minister to the United States.
  7. Sidney de la Rue, Fiscal Representative of Haiti.