Office of the Historian

811.516 Export-Import Bank/7–2144

The Ambassador in Haiti (Wilson) to the Secretary of State

No. 106
Port-au-Prince, July 21, 1944.
[Received July 24.]

Sir: I have the honor to transmit herewith in original and translation a copy of a note dated July 14, 1944,22 from the Haitian Foreign Office on the subject of the amortization during the fiscal year 1944–45 of the “A” and “C” Loans contracted in 1922–2323 and of the notes owing to the Export-Import Bank in pursuance of the contract for public works entered into between the Haitian Government and the J. G. White Engineering Corporation.24

[Page 1176]

The note states that the Haitian Government plans to pay two notes for $400,000 each held by the Export-Import Bank and $350,000 as amortization of the “A” and “C” bonds. It acknowledges that the financial position of the Haitian Government does not enable it to resume full amortization of these bonds (this would amount to over $950,000) and requests the Department’s assistance in arriving at a new agreement with the Foreign Bondholders Protective Council.

The Embassy is informed by the Co-President and General Manager of the Banque Nationale26 that the unobligated treasury balance at the close of the fiscal year will be between $1,200,000 and $1,400,000 and that it is from this sum that the Haitian Government proposes to make the above-mentioned amortization payments. For the fiscal year 1944–45 an expenditure budget of Gdes. 35,000,000 is anticipated, based on an unofficial estimate of receipts. Obviously the progress of the war and its effect on Haitian economy can occasion modifications upwards or downwards of this estimate.

It seems evident that the holders of the 1922–23 bonds, who enjoy an undisputed first mortgage on the receipts of the Haitian Government available for amortization purposes, should be apprised of the Haitian Government’s plans set forth above.

In the present situation conversations with the Foreign Bondholders Protective Council appear inevitable, as these bondholders have the right to be consulted and to reach a decision on the amount they are willing to accept, before any funds can be applied to the retirement of the notes held by the Export-Import Bank, which are junior to the bonds. It is clearly a matter of importance that the Haitian Government and the National Bank should know whether the bondholders will accept the offer made to them or whether they will insist on larger payments. The latter decision might render it necessary to modify the project for retirement of the J. G. White notes and the Haitian Government’s plans for budgetary expenditures in the coming fiscal year.

I have not been invited by the Haitian Government to discuss the possibility of extending the maturity dates of the “A” and “C” bonds or of refunding at a lower rate of interest. These securities could be retired at maturity, if the unobligated balances of the Haitian Government continue at their present level until 1952 and a drastic reduction is made in the retirement of the J. G. White notes. Obviously, it would be to Haiti’s advantage to retire as soon as possible securities bearing 6% interest, especially if they could be bought in the open market at prices under par. The uncertainties, however, of Haiti’s future economy, dependent as it is on the effects of the war and on judicious control over governmental expenditures, make it problematical whether such a plan could be effectively carried out.

[Page 1177]

As the Department will undoubtedly desire to obtain further information concerning the contemplated receipts and expenditures of the Haitian Government during the coming fiscal year, I shall endeavor to procure these figures for transmission to Washington.

Respectfully yours,

Orme Wilson
  1. Not printed.↩
  2. For terms of the $16,000,000 Series A loan of 1922 and the $4,400,000 Series C loan of 1923, see letter of October 7, 1922, from Port-au-Prince, Foreign Relations, 1922, vol. ii, p. 515, and telegram 86, August 1, 1923, 5 p.m., from Port-au-Prince, ibid., 1923, vol. ii, p. 420, respectively.↩
  3. In 1938 there was set up under an Export-Import Bank credit of $5,500,000 a public works contract with the J. G. White Engineering Corporation.↩
  4. W. H. Williams.↩