Foreign Relations of the United States, 1947, The American Republics, Volume VIII

838.51/2–2147

The Acting Secretary of State to the Members of the Haitian Special Mission ²

Washington, March 17, 1947.

Excellencies: I have the honor to refer to Your Excellencies’ notes of February 11 and February 21, 1947³ amplifying the earlier proposals of your Mission with respect to certain financial adjustments as first set forth in the Mission’s note of December 23, 1946,⁴ to which the Department of State made reply in its note of February 13, 1947.⁴ This Government has followed with great care economic and political developments in Haiti and, mindful of the good relations prevailing between our two countries, has endeavored to view in the most sympathetic light possible the Mission’s several requests.

With regard to the request for funds with which to redeem the bonds issued under the private loan contracts of 1922 and 1925, you will recall that in its note of February 13, the Department of State expressed its full concurrence in the position of the Export-Import Bank as stated in the latter’s memorandum of January 27, 1947 presented to the Haitian Mission,⁴ concerning the Bank’s inability to accede to this request. In this connection it may be pointed out that there is no agency of the Government of the United States empowered to effect a refunding loan at a lower rate of interest or to extend the term of amortization and reduce the interest rate of the present bonds.

In its note of February 21 the Mission requested the immediate termination of the Executive Agreement of September 13, 1941.⁵ It alleged intervention of the United States in the internal affairs of Haiti in connection with the terms of payment of 1922–23 bonds envisaged in that Agreement and stated in support of this opinion that the Agreement of September 13, 1941 does not permit the Haitian Government to prepare its budget or to amend its present budgetary laws except to put them in harmony with the Agreement. The Government of the United States has carefully reexamined the provisions of the Agreement and is unable to discover the basis for the statements of the Mission respecting the Haitian budget.

With respect to the allegations of the Mission concerning intervention, it should also be pointed out that the present situation is the result of negotiations freely entered into by both Governments in 1941, and in the opinion of this Government the Executive Agreement of September 13, 1941 is, therefore, not to be considered as an act of intervention.

My Government wishes to emphasize that the Executive Agreement of September 13, 1941 involves the interests not only of the Government of Haiti and the United States but also of Haiti’s private creditors. Consequently, in considering the Mission’s request, this Government must take into account the views of the bondholders, who have not indicated their willingness to approve an abrogation of the Executive Agreement.

Accordingly this Government feels it must advise the Haitian Mission that it is unable to agree to a termination of the Executive Agreement except in conformity with the express terms thereof. Article XI of the Agreement provides in part as follows:

“The present agreement shall continue in full force and effect during the existence of the outstanding external bonds of 1922 and 1923. After the redemption of the said bonds, the provisions of this agreement shall automatically cease to have effect.”

In connection with the foregoing, the Department of State is mindful of the statements made by the Mission’s counsel respecting the possibility of retiring the present bonds through a private refunding loan, and will continue to follow developments in this direction with sympathetic interest.

With regard to the Mission’s request for a readjustment in the interest rate and terms of amortization of the Export-Import Bank public works credit of 1938,⁶ no reason is perceived for modifying the reply to this question previously communicated to the Mission by the Bank and concurred in by the Department of State, to the effect that present circumstances do not justify a second refunding of this credit. It may be pointed out that the interest rate for this loan is exactly the same as has been provided in all similar loans to other governments.

The comments of the Mission regarding the SHADA obligation were considered carefully by the Export-Import Bank in its memorandum of January 27⁸ and the Department of State fully concurs in the views expressed therein.

With respect to the Mission’s remarks regarding the Cryptostegia program, this Government, for reasons set forth in a separate note⁹ being addressed to the Mission, regrets that it is unable to accede to the Mission’s request to reopen the settlement on this subject reached with the Haitian Government in 1944.

The remaining request set forth in the Mission’s notes under reference concerned the desire of the Haitian Government to obtain a new loan from the Export-Import Bank. The Department of State is fully appreciative of the reasons which have been advanced by the Mission in support of its request for this loan and accordingly expresses its concurrence with the position taken by the Bank during conversations on this subject with the Mission on March 7 and confirmed in the Bank’s memorandum of that date,¹⁰ to the effect (1) that the Bank is not in a position to consider the program as a whole, both because of its size and because of the lack of up-to-date or detailed information on individual projects; and (2) that if the Haitian Government wishes to select the most urgent and most desirable project from the Haitian point of view and secure competent engineering and other technical assistance in developing all of the relative information regarding this selected project, the Bank would be prepared to consider it on its merits and in the light of prevailing conditions in Haiti at that time and the status of Haiti’s external indebtedness.

Accept [etc.]

For the Acting Secretary of State:

Spruille Braden

2. The Mission consisted of the Haitian Minister of Foreign Relations (Price-Mars), the Ambassador in the United States (Charles), the Minister of Finance (Margron), and the former Minister of Agriculture and Commerce (Rigaud).
3. Neither printed.
4. Not printed.
4. Not printed.
4. Not printed.
5. Department of State Executive Agreement Series No. 220, or 55 Stat. (pt. 2) 1348; for documentation on this subject, see Foreign Relations, 1941, vol. vii, pp. 322 ff.
6. A loan of $5,500,000 to the Haitian Government by the Bank for public works purposes; the J. G. White Engineering Company was engaged by the Haitian Government to carry out projects which that Government desired and approved, such as roads and water supply for Port-au-Prince.
8. The $5 million loan from the Export-Import Bank, authorized in May 1941 and thereafter extended to Haiti through the medium of the Société Haitiano-Américaine de Développement Agricole (SHADA), had been utilized for the purpose of diversifying and developing profitable Haitian enterprises; in its. January 27 memorandum, not printed, the Bank expressed its inability to find any valid basis on which Haiti could request cancellation of the SHADA credit; the Bank was therefore not disposed to make any readjustment at that time (838.51/1–2747).
9. Infra.
10. Memorandum not printed.