838.51/2744: Telegram
The Acting Secretary of State to the Minister in Haiti (Armour)
83. Your 128, November 30, 10 a.m. On November 22 the Secretary radioed that the Haitian Delegation had presented him with a memorandum which he was forwarding by air mail from Rio de Janeiro November 25.77 The memorandum pointed out the relatively small amount of bonds outstanding and stated that “the Haitian Government would be happy if a declaration of renunciation of the financial control exercised by the Government of the United States in Haiti were made before the Conference at Montevideo or at its opening.”
The Secretary stated that he had informed the Haitian Delegation that he was forwarding their petition to the Department for consideration. The Secretary added that if the statements made in the Haitian memorandum were true he believed we would be justified in asking the bankers who floated the loans whether the present state of finances would not justify the refunding of the outstanding bonds by means of a new issue which would be made under considerations which would not require any action by the State Department in connection with the payment of interest and amortization.
On November 25 we sent a radio message to the Secretary reading as follows:
“It would certainly be most welcome from our point of view if a refunding arrangement could be worked out with agreement of the bondholders which would result in doing away with our administration of financial control. Of course, existing conditions in the investment markets do not seem very favorable for such an operation at the present time. It seems to us, tentatively, that it would be preferable [Page 771] for the Haitian Government if it so desires, rather than for the United States Government, to approach the bankers who floated the loan (who are also the Fiscal Agents) regarding a refunding operation. Under Article XXVI of the Agreement of August 7 last Haiti, with the approval of the United States, reserved the right to retire the bonds before their due date provided she could make an arrangement for this purpose satisfactory to the holders of the bonds.
After we have received and considered the petition we will communicate further with you.”
On November 26 the Secretary radioed:
“Agree with you that it would be preferable for Haitian Government to approach fiscal agents rather than for us to take initiative regarding a funding operation. The phase of this matter which I consider of first importance is, however, that we would welcome an arrangement which would result in withdrawal of action by our Government in financial control.
I would suggest that Armour be informed of this attitude and that he be instructed to so inform the Haitian Government and to tell them we would be ready to accept an arrangement along such other lines if worked out in agreement with the bondholders. I think we should also tell the Haitian Government that we will be glad to lend our good offices in the matter in any way that would not involve our Government in any further responsibilities in Haiti. Please keep me advised.”
On November 27 we sent a message to the Secretary as follows:
“President Vincent has sent a letter to President Roosevelt expressing the intention of the Haitian Government to continue to fulfill its obligations but requesting, as in the Haitian memorandum to you, the early withdrawal or American financial administration. In the draft reply which we are submitting to President Roosevelt we are embodying the suggestions made in your telegram under acknowledgment.”
It is obvious from the foregoing that Barau’s message is misleading. As the Secretary stated in his message to us of November 26, we would of course welcome an arrangement which would result in withdrawal of financial control on our part if it can be worked out by Haiti in agreement with the bondholders, and we should be glad to lend our good offices in the matter in any way that would not involve our Government in any further responsibilities in Haiti. However, pending such an arrangement worked out in agreement with the bondholders, we must of course stand on the basis of existing agreements. We have incorporated these views in the draft we have forwarded to President Roosevelt for his reply to President Vincent.78 As soon as we hear from the President we will advise you further.