Memorandum of Conversation, by Mr. Charles C. Hauch of the Division of Caribbean and Central American Affairs
|Participants:||His Excellency, André Liautaud, Ambassador of Haiti|
|A–R—Assistant Secretary of State Nelson A. Rockefeller|
|CCA—Messrs. Cochran14 and Hauch|
This meeting was arranged at the request of the Haitian Ambassador to discuss amortization payments on Haiti’s foreign debt during the Haitian fiscal year commencing October 1, 1945, as well as the twenty-five year amortization extension schedule for the debt, which had been proposed by the Haitian Government as one means of financing its Five Year Plan.
Mr. Rockefeller stated that the interested officers of the Department had examined with a great deal of care the Five Year Plan and the proposed amortization extension. He emphasized this Government’s [Page 1096] desire to cooperate in such long run economic development of the country as would mutually benefit both the United States and Haiti, and that this Government would be pleased to examine with Haiti means whereby the Plan or a modification thereof might be put into effect. He stated, however, that it was the view of the interested officers of the Department that the present amortization schedules for the repayment of the Haitian foreign debt should stand. For 1945–46, this would mean two payments of $400,000 each to the Export-Import Bank on the Public Works contract of 1938, and $700,000 to the holders of the 1922–23 bonds, with the provision that the last $300,000 of this amount would be payable only if it should appear by the end of the first six months of the fiscal year that the Haitian Government’s revenues for the year would reach 35,000,000 gourdes.
The Ambassador expressed regret that the Department felt unable to agree to the Haitian Government’s proposed readjustment of the debt schedules. Considerable discussion ensued as to the present status of Haiti’s financial obligations and the desirability of maintaining present amortization schedules. The Ambassador emphasized again the points he had brought up during his conversation with officers of the Department on July 5th (see memorandum of conversation entitled “Haitian Finances and the Five Year Plan”15), including the point that it would be to the advantage of all concerned, including the bondholders themselves, if Haiti were to use a considerable portion of its present surplus and its future revenues to help finance the long-run economic betterment of the country. The advantages to Haiti in paying off bonds bearing a high rate of interest as quickly as possible and at a time when the Haitian Government is enjoying the highest revenues in its history were pointed out by the officers of the Department.
The Ambassador agreed that Haitian revenues for 1945–46 would probably continue at a high level, but asserted that the Government felt it essential to use considerable of these funds and of the present surplus to realize at least a portion of the approximately 9,000,000 gourdes originally envisaged as the first year’s expenditures under the Five Year Plan. He said that the Haitian Government would like to allocate 2,000,000 gourdes of the anticipated surplus of 7,000,000 gourdes on October 1st to start the Plan, but that this would be impossible if the 1944–45 amortization arrangement for the 1922–23 bonds were continued for 1945–46, since the Government also wished to retain [Page 1097] a reserve of 2,000,000 gourdes, and at the same time to pay on September 30 the 2,000,000 gourdes ($400,000) due the Export-Import Bank on November 15. (Note: The Ambassador was obviously referring to the fact that under the arrangement proposed by the Department, it would be necessary for Haiti to make a payment of 2,000,000 gourdes, i.e., $400,000, to the 1922–23 bondholders on October 1, whereas the Haitian Government had hoped to pay only 1,000,000 gourdes as of that date. If 4,000,000 gourdes of the surplus were paid to the Export-Import Bank and the private bondholders and 2,000,000 gourdes retained as a reserve, only 1,000,000 gourdes of the surplus could be allocated to the Five Year Plan.)
Ambassador Liautaud said that Haiti’s payments on the 1922–23 loan contracts were already ahead of schedule, since under these contracts, approximately $7,965,000 should still be outstanding at the present time, whereas the actual amount is only about $6,792,000. He implied that a moratorium might, therefore, be in order. It was pointed out to the Ambassador, on the other hand, that if these obligations are to be met by the maturity dates of 1952 and 1953, annual amortization to the amount of approximately $900,000 per year would ordinarily have to be paid, whereas the total amount for 1944–1945 was only $700,000, with the same arrangement now proposed for 1945–1946.
The Ambassador said that he was pleased to learn of the willingness of this Government to consider other ways and means of assisting Haiti with the Plan, but inquired as to how soon such ways and means might be made known. He said that until the Haitian Government had definite information as to this point, it would still remain difficult for it to draw the budget for the fiscal year commencing October 1st, since it would not know how much to allow for the first year’s expenditures under the Plan. It was suggested to the Ambassador that pending possible further consideration and discussion of the Plan by American and Haitian authorities, it might be possible for the Haitian Government to allocate a portion of its surplus as of October 1st, for the more immediately important features of the Plan.
Mr. Rockefeller again emphasized this Government’s desire to lend assistance to Haiti and stated that he felt sure Mr. Bailey, Chief of the OIAA16 Food Production Party in Haiti, would be glad to lend advice and assistance on the agricultural features of the Plan.
The Ambassador stated that he would communicate the views of the Department to his Government and would await further instructions.
- James C. Corliss, Assistant Chief of the Division of Financial Affairs.↩
- William P. Cochran, Jr., Assistant Chief of the Division of Caribbean and Central American Affairs.↩
- Memorandum not printed; the conversation was held in Washington among Ambassador Liautaud and Foreign Minister Gerard Lescot of Haiti; Mr. Rockefeller and his special assistant, John C. McClintock; Avra M. Warren, Director of the Office of American Republic Affairs; and Mr. Cochran.↩
- Office of Inter-American Affairs.↩