838.51/8–248: Airgram

The Secretary of State to the Embassy in Haiti


A–156. Reference is made to Embassy’s despatch No. 195 of May 4, 1948,1 with regard to the Haitian’s desire to submit a separate application to Export-Import Bank for a $4,000,000 credit for improvement of the water supply system in Port-au-Prince and Cape Haitian and a housing project in Port-au-Prince. This despatch, together with a copy of President Estimé’s note of May 4, 1948 was referred to Export-Import Bank by the Department for its consideration. The following memorandum has been received from Export-Import Bank:

“The Export-Import Bank has considered the note presented to Ambassador Tittmann by President Estimé on May 4 and Embassy despatch No. 195 commenting thereon. As indicated in the Bank’s memorandum of April 30, the Bank believes that it would be wise from the points of view of both the Haitian Government and the Bank to concentrate attention and effort at this time upon a single large undertaking. Consequently, the Bank is not prepared to consider applications for credits to improve the water supply systems in Port-au-Prince and Cap Haitian or to undertake the low-cost housing in Port-au-Prince until plans for the Artibonite Valley project have been completed and a decision has been reached with regard to Export-Import Bank assistance in the financing of that project. If a credit should be extended for that purpose and if progress should be made [Page 597] in the execution of the Artibonite Valley project, it might be appropriate to consider applications to finance additional undertakings.

The Bank is sympathetic to the need of Haiti for a considerable number and variety of developments including some in the field of health and sanitation, but believes that it would be unwise to attempt to initiate a variety of projects of considerable magnitude simultaneously.

The Bank sees no objection, however, to the prosecution of studies and the preparation of plans by the Haitian Government, with appropriate technical assistance, for projects which may be undertaken in the future. It should be clearly understood, however, that there is no commitment on the part of the Bank to do anything more than to consider at some appropriate time in the future any plans or proposals which may be prepared and submitted. Furthermore, although the Bank has not been furnished any facts with regard to the proposed domestic water supply and housing projects, it is obliged to point out that in general such projects are rarely appropriate for financing by international loans. The Bank recognizes that such projects are desirable and often essential to the health and welfare of the people of all countries; however, they do not directly enhance the productive capacity of the country and thereby create the means by which there can be produced the additional goods out of which any loan must be repaid. The Bank prefers therefore to extend credits for projects which directly contribute to increases in production; it prefers ordinarily not to extend credits for projects which, although desirable, are not directly productive, unless of course repayment can be assured by other concurrent developments of a productive character.”

Please convey foregoing, in your discretion, to Haitian Government.

  1. Not printed.