Memorandum of Conversation, by Mr. Willard F. Barber of the Division of the American Republics

Participants: Mr. Francis White of the Foreign Bondholders’ Protective Council, Incorporated;
Mr. Duggan;
Mr. Bursley;
Mr. Finley;
Mr. Collado;
Mr. Barber.

At Mr. Duggan’s request Mr. Finley outlined the points which had been discussed in the Department with President-elect Lescot and Foreign Minister Dennis during their recent conversations in Washington. During and following this explanation Mr. White asked the following questions:

Would the Board of Directors of the Bank have control over customs?
Would all decisions of the Board of Directors be by vote of five members?
Would the Accord of 1933 be changed by an executive agreement or by a treaty?
Would the appointment of the Board of Directors be by joint accord of the two Governments?
Who would be the personnel of the Board of Directors and who would be the Co-Presidents of the Bank?
Would the new accord lapse with the retirement of the bonds?

Mr. White was informed that the Board of Directors would exercise supervision over customs matters and that decisions of the Board would be taken with the approval of five members. He was also told that it was not yet known whether the new agreement would have to take the form of a treaty. It was also stated that the appointment of the American members of the Board of Directors was to be by the joint accord of the two Governments. Mr. Duggan was certain that there would be no difficulty in reaching agreement on the designation of the American members. Regarding the personnel of the Directorate, several names were mentioned but it was stated that no definite arrangements had yet been made. It was also expected that the new agreement would terminate upon the retirement of the bonds.

Mr. Finley also pointed out that under the new plan, it was felt that there would be a more efficient handling of communal budgets which would be under the supervision of the Bank, and that in this way as well as in the expected impetus to Haiti’s economy arising out of the new agricultural plan, it was felt that the bondholders’ prospects were favorable. Mr. White said that his chief request, which if accepted would bring about the approval of the Bondholders’ Council, would be a provision to the effect that if the new system broke down and interest payments to the bondholders were not made, that there should be a reversion to the status quo ante. Mr. Barber inquired if Mr. White meant by this a reestablishment of the Office of the Fiscal Representative. Mr. White replied in the affirmative. Mr. Collado inquired if Mr. White had in mind a reversion to the previous system in case (a) the administration of the new plan were ineffective, or if (b) the general economic situation or the Haitian fiscal situation did not permit bond payments to be met. Mr. White intimated that he was really aiming at point (a).

Mr. White also raised the question, although he apparently considered it as of secondary importance, as to whether or not bonds now held by the Haitian Government could be disposed of in order to make up for the amortization payments which had not been made in the last two or three years. He also expressed the hope that means would soon be found to restore the amortization payments.

In conclusion Mr. Duggan and Mr. Collado said that careful consideration would be given to Mr. White’s suggestion. It was [Page 345] thought that with President Lescot just being inaugurated and as the new Haitian Minister had not yet arrived in Washington a month’s time might elapse before serious conversations would again be held.