838.51 Cooperation Program/6–2845

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

No. 860

Sir: I have the honor to invite the Department’s attention to my despatch no. 280 of October 7, 19441 in regard to the intention of the Haitian Government to prepare a plan providing for the improvement of Haitian agriculture and general economy, the expenses of which would be extended over a period of five years.

I now have the honor to report that this plan2 was placed in my hands on June 22 and is now being subjected to a careful study by the appropriate members of the Embassy. It is divided into three sections comprising (1) agriculture, (2) road construction and (3 other public works. The total expenditures contemplated under these three headings amount to 46,385,000 gourdes, of which 19,825,000 are allotted to agriculture, 25,910,000 for the construction of roads and [Page 1091] the small remainder for other improvements, principally the construction of a dock for coastwise shipping at Port-au-Prince. The section devoted to roads provides for the construction of an asphalted highway from Port-au-Prince to Cap Haitien, and for various classes of roads and paths in other parts of the Republic, the purpose of this construction being not only to provide more rapid communication but to facilitate the transport of Haitian products to the seaports. The section devoted to agriculture is most complicated and the one which is probably of major interest to the Department. The largest expenditures would be devoted to irrigation, reforestation and the raising of livestock, smaller amounts being allotted to promoting the cultivation of coffee, cocoa, cotton, etc., and to combating diseases affecting the banana plant. In my opinion it is this section which should receive the most careful attention, as the increase of Haitian production, and consequently an improvement of Haiti’s wealth and standard of living, are intimately connected with these projects. The construction of roads would appear to be a matter of secondary importance in comparison with the former. If possible, I shall forward a copy of this document to Washington for the Department’s perusal. It is, however, voluminous and intricate and a translation would be a difficult and laborious task.

On the same day that I received the copy of the Five Year Plan, President Lescot handed me a memorandum, a copy and translation of which are transmitted herewith,3 which attempts to justify this plan, this justification being based on the contention that if Haiti takes these measures it will put itself in a better position to face its obligations. It then points out that the income of the Haitian Government in post-war years will be uncertain, that it is not desired to request a moratorium on its foreign debt, and that in order to put into effect the contemplated plan of public improvement, it will be necessary to reduce amortization on the 1922–1923 bonds4 and the loan of the Export-Import Bank.5 The good offices of the United States Government are requested with a view to inducing these creditors to accept the terms offered in the memorandum.

The problem, therefore, is to determine whether and to what extent the Department should support the plan of the Haitian Government. [Page 1092] As stated above, I believe that the plan for highway improvement is of secondary importance, compared to the agricultural project. However, even if consideration should be limited to the latter, which amounts to about 20,000,000 gourdes, or $4,000,000, it will be necessary to determine how much of this is practicable, in other words, whether Haiti, with its meager resources of officials and technicians would be able to carry out these projects and to maintain them efficiently after completion, as it would certainly serve no useful purpose to ask Haiti’s creditors to make concessions which would achieve no satisfactory results. Even with the more modest plan which I have just suggested, I do not believe it would be possible for Haiti to incur these increased expenses and at the same time maintain amortization in the same volume as in the fiscal year 1944–45. In addition, it must be recalled that the payments to the Export-Import Bank on the Shada loan6 should commence in 1947.

The matter is further complicated by the fact that agitation continues in the press for the termination of the financial relations established between Haiti and the United States through the Agreement of September 13, 1941.7 As I have stated in previous despatches, this subject has not even been suggested to me by the Haitian Government. However, with the submission of the Five Year Plan and the termination in 1946 of the contracts of Messrs. Williams, Pearson and Roosevelt,8 it is necessary to face this matter. It will undoubtedly be essential to obtain the views of the bondholders, who might be willing to agree to the termination of the present financial relations. On the other hand, it can be argued that if the Haitian Government requests the bondholders to extend maturity of the bonds and incurs additional expenditures at a time when that Government itself confesses that its future income may be harmfully affected by the end of the war, the control and supervision that has existed since 1941 should be maintained. It is hard to predict President [Page 1093] Lescot’s position in this matter. On the one hand he has assured me that all expenditures incurred under the Five Year Plan should be supervised by the Bank.9 On the other, he might easily believe that it would strengthen his political position if he could point out to the Haitian public that he had “liberated” Haitian finances from foreign control.

When the President handed me his memorandum, I again made it clear to him that decision in regard to amortization would rest with Haiti’s creditors. He appears to understand this, but hopes for the Department’s intervention.

Respectfully yours,

Orme Wilson
  1. Not printed.
  2. Not printed; copy transmitted to the Department in despatch 887, infra.
  3. Memorandum dated June 22, signed by President Elie Lescot, not printed.
  4. Series A and Series C bonds of the American loan of 1922: see Foreign Relations, 1922, vol. ii, pp. 515516; ibid., 1923, vol. ii, pp. 420423; and ibid., 1938, vol. v, p. 575, footnote 7. The series B bonds had been retired by mid-1937 ( ibid., 1937, vol. v, pp. 569580, passim).
  5. Contract of 1938 between the J. G. White Engineering Company and the Export-Import Bank, whereby Haitian Government notes of approximately $5,000,000, given in payment for work performed and material furnished for a public works program in Haiti, were to be discounted by the Export-Import Bank. See Department of State Press Releases, July 30, 1938, pp. 64–65.
  6. Shada, the Société Haitienne Americaine de Développement Agricole, a corporate agency of the Haitian Government, received a line of credit of $5,000,000 in August 1941 from the Export-Import Bank to finance the production of sisal and cryptostegia (source of rubber) for the war effort. (810.5018/198; 838.51 Cooperation Program/10–2144: and 839.415/176.)
  7. Agreement signed at Port-au-Prince between the United States and Haiti, which terminated the offices of Fiscal Representative and Deputy Fiscal Representative and modernized the fiscal machinery set up in 1915 while adequately safeguarding the interests of the holders of the 1922 and 1923 Haitian bonds. For summary of the Agreement, see Department of State Bulletin, September 13, 1941, pp. 214–215; for text and related exchange of notes, see Department of State Executive Agreement Series No. 220, or 55 Stat. (pt. 2) 1348. For documentation relating to the Agreement, see Foreign Relations, 1941, vol. vii, pp. 322 ff.
  8. W. H. Williams, Thomas Pearson, and Edward F. Roosevelt were designated as the three United States members of the Board of Directors of the reorganized Bank, the National Bank of Haiti, in the exchange of notes that accompanied the Agreement of September 13, 1941.
  9. National Bank of Haiti.