838.51/3705: Telegram
The Secretary of State to the Chargé in Haiti (Finley)59
69. Your 107, August 13, noon. The Embassy in Paris has substantially confirmed60 the French attitude towards the commercial agreement with Haiti and the 1910 loan as reported in your telegrams 104 of August 11, 1 p.m. and subsequent.
At Mr. Welles’ request, the French Chargé d’Affaires61 called Saturday morning and was given the views of this Government on the whole question. He was informed that this Government and the Haitian Government have always maintained that a full and just tender of settlement was offered to the 1910 bondholders in 1923, a tender which has been accepted by approximately half of the bondholders; that this Government feels that irrespective of the juridical aspects of the case, the whole structure of Haitian finance as built up with the assistance of this Government rests on the adequacy of that offer; that the French Government had given assurances in 1937 that the commercial agreement and the 1910 loan settlement would be divorced but that subsequently it appeared that the French Government was proceeding as if that divorce had not taken place; that despite the foregoing, [Page 632] this Government, desirous of seeing normal trade relations between Haiti and France, had not voiced its objections to the arrangements contained in the Protocol of Signature of the recently signed Franco-Haitian Commercial Convention.
The Chargé was informed, however, that this Government, in order to safeguard the rights of the bondholders of the 1922 loan, who had subscribed for that loan on the definite assurances of both this Government and the Haitian Government that a full and just tender of settlement had been made to the 1910 bondholders, had insisted that this Government give assurances which would confirm the 1922 bondholders in their position as holders of a first lien on Haitian revenues.
Specifically this Government had asked that the Haitian Government obtain written assurances from the French Government confirming: (1) the verbal arrangement subsequent to the Protocol of Signature that the funds envisaged in paragraph 4 thereof need not be transferred from the National City Bank in New York except as might be necessary to redeem individual bonds as presented; and (2) that the French Government will not support any further claim beyond that envisaged in the protocol on behalf of any 1910 bondholder.
Mr. Welles then expressed his surprise and concern at the attitude now assumed by the French Foreign Office and particularly at the statement attributed to de la Baume that “refusal now on the part of Haiti to live up to its obligation would give rise to a suspicion that there was some ulterior motive behind such refusal”. Finally the Undersecretary outlined our real interest in the economic rehabilitation of Haiti as evidenced by the recent financial arrangement sponsored by the Export-Import Bank at a time of real crisis when it appeared that interests neither French nor American were actively endeavoring to bring Haiti under their influence.
The Chargé promised to bring the substance of the Undersecretary’s remarks to the attention of his Government.