Memorandum by the Assistant Chief of the Division of the American Republics (Finley)

It did not appear quite clear from telegram no. 14 from Port-au-Prince that the Haitian Government was aware of the Department’s [Page 324] point of view respecting the reduction of the interest rate on Haitian bonds as expressed in the Department’s telegram no. 24. I telephoned Mr. Sparks at Port-au-Prince who assured me that he had made known the Department’s viewpoint to President Vincent, the Minister for Foreign Affairs, and the Fiscal Representative yesterday.

I said that that being the case we could not understand why Mr. de la Rue was not forging ahead with the negotiations with the Bondholders Council. We were still in the dark as to what was going on although we continued to receive requests for the use of our good offices vis-à-vis the Council and in behalf of Haiti. Mr. Sparks agreed that the Department had instructed Mr. de la Rue last August to broach the question of the interest rate on Haitian bonds to Mr. White. He said Mr. de la Rue had done this and had then returned to Haiti. Later, when Mr. de la Rue proposed to come to the United States to discuss this question further with the Bondholders Council, he was informed that the Department desired him to remain in Haiti and that it felt M. Lescot could carry on the negotiations. I judge that thereafter, Mr. de la Rue has washed his hands of the whole question, although he has from time to time invited the attention of the Legation at Port-au-Prince to interest payment due on February 1. It was only yesterday, January 29, that Mr. de la Rue had again been requested by the Haitian Government to resume negotiations with the Council. Mr. Sparks did not know what Mr. de la Rue had done since yesterday, nor whether he had telephoned to Mr. White, or written, or anything. He said he would get in touch with Mr. de la Rue and find out.

I told Mr. Sparks that some of us here felt that it would be better from every point of view if the Haitian Government or Mr. de la Rue could persuade the Bondholders Council not to oppose a reduction in the interest rate rather than have the Department intervene at this time. Mr. Sparks said however that, as always, the Haitian Government depended on us to pull their chestnuts out of the fire, to which I replied that, in my opinion, there is far too much call on the Department for services which could be as well performed by the Haitian Government itself or by Mr. de la Rue.

Mr. Sparks then inquired whether we could not merely instruct Mr. de la Rue not to make the interest payment due February 1. I said that it seemed to me that Mr. de la Rue’s duty of making the payment arose from the Accord of 193313 which accord could not be unilaterally altered by us. Mr. Sparks then added that he hoped we might authorize Mr. de la Rue to defer making the interest payment due February 1 until February 15 since he understood that the Fiscal Agents would not consider that a default had occurred until that date. [Page 325] I replied that Mr. de la Rue was well aware of his responsibility vis-à-vis the Fiscal Agents and I felt sure that nobody in the Department would feel at this time that they could relieve him of these responsibilities, and that Mr. de la Rue would therefore have to use his own judgment.

Mr. Sparks went on to add that M. Lescot has been ill for the last two days and that he had not therefore been able to get in touch with him to understand more clearly how far Lescot’s negotiations with the Bondholders Council had gone. He said, however, that M. Lescot was going to the Senate this morning and that he would try to get in touch with him this afternoon.

He said he would also appeal to Mr. de la Rue to hasten his negotiations with the Council.

Harold D. Finley