838.51/2558: Telegram
The Minister in Haiti (Armour) to the Secretary of State
[Received 6 p.m.]
128. At his request I called on the President yesterday accompanied by Heath1 and Pixley.2 The day previous Blanchet3 had submitted to me a note in which the Government proposed to discontinue payment on the amortization of the debt for a period of 4 years from April 1st, next, in view of the misery prevailing throughout the country and the low price of the two principal commodities. I had told Blanchet and the President that we could not give our approval to any such suggestion and proposed that the note be withdrawn. On our visit yesterday the President agreed to withdraw the moratorium proposal and in its place Hibbert, the Minister of Education [Finance], who with Blanchet was also present urged that funds be made available immediately to start work on the Artibonite irrigation project. To this end he asked that we ascertain the present status of De la Rue’s4 negotiations for a loan from the National City Bank. He felt that because of the recent heavy decline in coffee prices it was imperative for Government to put money into circulation through public works. The President himself urged the Legation to use its good offices to expedite and assist the Government’s application for an Artibonite loan. He understands that such a loan must not extend the period of the financial control now exercised. He then went on to ask that $500,000 be made available immediately from the cash reserves to start the development, promising that this amount would be returned from the proceeds of the proposed loan.
[Page 692]Pixley and I are both of the opinion that early development of the Artibonite, with a view of providing additional products for export and diminishing the present dependence on coffee, is desirable and practical provided that the Government will adopt effective measures to assure the proper utilization of the land to be irrigated. The Government is working on, and is expected shortly to submit, a plan showing the sequent steps that would be taken in the proposed development.
I recommend that De la Rue be requested to resume as soon as practicable his negotiations with the National City Bank, and that the Legation be informed by telegraph of the status of the matter.
With regard to the suggestion that $500,000 be made available from the cash reserve it is obvious that the Financial Adviser cannot approve in advance use of funds for this purpose until the loan is assured.
In bringing the above to the Department’s attention I should state that, in talking with Pixley, he stresses the fact that there is little probability that this project can be carried out from revenues in the near future and that the Treasury is not in a position to take care of the expenses from its present resources. A loan seems to be the only solution. Haitian business of the National City Bank has been very profitable over the past 10 years. The Government’s fiscal record indicates that the desired loan could be carried easily in normal times and even at present debt charges consume only about 27 percent of the budget. In view of this it does not seem that the proposal made to the bank is unreasonable and the Department may wish, if the matter is referred to it, informally to support Mr. De la Rue’s position.