The Acting Secretary of State to the Minister in Haiti (White)

No. 125

Sir: Reference is made to the Department’s telegram no. 127 of June 10, 1941, and previous correspondence regarding the agreement which was reached in principle on April 30, 1941 for a revision of the Accord of August 7, 1933. Subject to the preliminary steps hereinafter mentioned, the Department stands ready to conclude an executive agreement with the Government of Haiti along the lines of that agreement in principle.

There are enclosed for your information and consideration three copies of a draft of a new executive agreement styled “Draft D, July 7, 1941”.33 You are requested to transmit to the Department by air mail as soon as practicable your views on the provisions of this draft agreement together with those of Mr. Williams of the National Bank of the Republic of Haiti. As the enclosed draft does not have the approval of this Department for submission to the Haitian Government for negotiation, you will please make it clear to Mr. Williams that the document is shown to him in strict confidence and its contents should not be divulged to anyone.

You will note that in Articles II and III it is provided that the Haitian Government will enact and maintain legislation and executive and administrative regulations necessary to put the provisions of the new agreement into force. You are requested to submit a statement regarding such legislation and regulations as may, in your opinion and that of Mr. Williams, be appropriate for this purpose. In this connection will you please recommend those measures which you believe to be necessary to be enacted before the signing of the executive agreement, and those which should be enacted simultaneously with or subsequent to the signing of the agreement. However at the present time it is not desired to bring this, or any other aspect of the proposed agreement to the attention of the Haitian Government.

In the enclosed draft additions have been introduced into the “Bases of Discussion” of April 30 in order to clarify certain points, notably the statement in Article VII that the bonds of the 1922 loan constitute an irrevocable first lien upon all Haitian Government revenues, and that until the amortization of the bonds has been completed the public debt of the Republic of Haiti shall not be increased except by previous agreement between the Governments of the United States and Haiti. It is felt that this article should be satisfactory to the Haitian Government in lieu of the several provisions of the accord of August [Page 347] 7, 1933 which tend to limit the freedom of action of the Haitian Government in this regard.

The stipulation in Article VIII to the effect that there shall be applied to the sinking fund for the redemption of bonds for the 1922 loan, 10% of Haitian Government revenues in excess of $7,000,000 is for the purpose of increasing the benefits to the bond holders in the event of improved revenues by the Haitian Government. The benefits which would obviously accrue to the Haitian Government as the amortization payments are increased and the life of the loan is reduced, do not require comment.

The Department is of the opinion that it will not be necessary or desirable to mention in the proposed executive agreement the notes held by the Export-Import Bank of Washington. The guarantee made by the Haitian Government in connection with the notes issued for the J. G. White Engineering Company’s credit, as well as the guarantee by the Haitian Government of the notes which are expected to be issued by the proposed Haitian-American Agricultural Development Corporation constitute a positive pledge of the Haitian Government in respect to such credits.

It is felt that such questions as the amount of Directors’ fees, the names of the members of the Board of Directors and other details of the organization and administration of the National Bank of the Republic of Haiti may appropriately be agreed upon by separate exchanges of notes. Any further observations which you may care to make on these questions in addition to those made in your despatches 115 and 132 of May 20 and 29, 1941,34 respectively, will be given full consideration by the Department.

As the Haitian fiscal year closes on September 30 it is hoped that the preparation of the proposed agreement will be expedited in order that it may be presented to the Haitian Government and be put into effect, and that the Office of the Fiscal Representative be terminated by that date.

Very truly yours,

Sumner Welles
  1. Not printed.
  2. Neither printed.