838.51 Cooperation Program/8–2045
The Ambassador in Haiti ( Wilson ) to the Secretary of State
[Received August 24.]
Sir: With reference to my telegram no. 268 of August 17, 1945, 4:00 p.m.,21 I have the honor to report that on August 14 I called on President Lescot at his request to discuss the Five Year Plan and its effect on the amortization of Haiti’s foreign debt. The Ministers of Foreign Affairs,18 Finance and Commerce,19 Agriculture and Public Works20 were present.
I was informed of Ambassador Liautaud’s conversations with the-Department, to which I replied that my knowledge of these conversations was limited to information given in the Department’s telegram no. 259 of August 6, 6:00 p.m.21 and the Memorandum of Conversation dated August 6, copy of which I had received from Mr. Hauch.
The President and Minister Lacroix then talked with me at some length with the purpose of proving to me the impracticability of the Department’s proposals, as set forth in the above-mentioned memorandum, since in their opinion it is urgently necessary to put the Five Year Plan into operation during the fiscal year 1945–46. The Minister read to me the Haitian Government’s counter proposals and buttressed them by arguments to show the crushing burden which the acceptance of the Department’s proposals would signify. In response to my request, he prepared a memorandum containing the text of these counter proposals, a copy and translation of which are enclosed.22
These proposals comprise two outstanding features: (1) The reduction by about one-half of the proposed expenditures for the first year under the Five Year Plan; and (2) the suspension of amortization of the 1922–23 bonds for the professed reason that the total amortization payments have exceeded the stipulated amount by $1,000,000. I pointed out to Mr. Lacroix that such a suspension would merely make subsequent annual payments higher, to which he retorted that his Government had received no answer to President Lescot’s memorandum proposing a twenty-five year term of amortization in order to give relief to the Haitian Treasury. The Department will note that the Minister refers to conversations said to have taken [Page 1099] place in 1943 between officials of the Department and representatives of the Haitian Government in which the present situation was considered. He also endeavored to impress upon me that Haiti voluntarily increased its amortization payments in 1943, and was not obliged to do so under the agreement with the bondholders in force at that time.
President Lescot, with some show of feeling, supported his Minister by emphasizing his Government’s sense of responsibility for the service of its foreign obligations, some of which were imposed on Haiti by a foreign Government during the Occupation.23 He mentioned the heavy sums ($26,000,000) of interest and amortization already paid on the 1922–23 bonds by a small and poverty stricken land. For the first time in conversation with me he referred rather bitterly to the lavish and wasteful expenditures made by Shada in the rubber plantations at Sources Chaudes, all of which his country would be obliged to bear. It was evident to me that the President and his Minister were trying to impress upon me that any reluctance on the part of the United States Government to give them material assistance would be ungenerous.
I pointed out that a plan as voluminous as that presented by the Haitian Government required of necessity sufficient time to study and consider in Washington before a final answer could be given, and that the Department had received this plan less than two months ago. The Haitians did not contradict this, but intimated that they knew well what their country needed. I asked the President whether due consideration had been given to the necessity of maintaining the contemplated public works and the inevitable expense thereby involved. To this he replied that all public works constructed in his administration had been properly maintained.
I promised to forward to Washington the Haitian counter proposals for next year, and in pursuance of the last paragraph of the memorandum of August 6, consented to arrange a meeting between Minister Dartigue, Mr. Bailey and the appropriate officials of this Embassy in order to consider the advisability of commencing some public works under the provisions of the plan during the next fiscal year.
It now seems quite clear, as intimated in my despatch no. 818 of June 14 24 that no funds will be available immediately for the Five Year Plan if the amortization discussed in the conversation of August 6 should go into effect. The accompanying tabulation, which was seen by Mr. Williams, shows this. It contemplates a surplus of 7,000,000 rather than 6,000,000 gourdes.[Page 1100]
- 7,000,000 gourdes surplus
- 3,500,000 gourdes to amortize 1922–23 Loan
- 3,500,000 gourdes
- 4,000,000 gourdes to amortize Export-Import Bank Loan
- –500,000 gourdes
- +2,500,000 gourdes to be set aside for reserve and amortization from estimated 1945–46 receipts
- 2,000,000 gourdes reserve
- Nothing for Five Year Plan.
Aside, therefore, from the question of whether the bondholders will consent to the abolition next year of amortization on their bonds in the event that the Export-Import Bank obligations are fully honored in this respect, it will be necessary to decide how far to help the Haitian Government in its Five Year Plan. The political aspect of the problem was discussed in my despatch no. 887 of July 14, 1945. I do not believe that this situation has changed materially since then. The intrinsic merits of the plan seem, therefore, to be of real importance, and it is with this idea in mind that the above-mentioned conversation with Minister Dartigue will be held. President Lescot has stated to me that all expenditures should be controlled by the National Bank. Of equal importance, however, is the knowledge that the money is well spent. It is for this reason that the Department might appropriately consider the possibility of suggesting to the Haitian Government at the proper moment that it would be appropriate to appoint American technical experts to assist in supervising the execution of the works contemplated by the plan, for the protection of both Haiti and its creditors.