838.51/1007a: Telegram
The Acting Secretary of State to the Minister in Haiti ( Bailly-Blanchard )
96. You are instructed to obtain an interview with the President at the earliest opportunity and inform him that the Department has determined, after consultation with the Financial Adviser and in accordance with his advice, that the internal funded debts of Haiti as represented in the bond issues of 1912, 1913, and 1914, a, b, and c, do not come within the provisions of the Protocol as “pecuniary claims”, but are liquidated debts and may therefore be paid or served without submission to the Claims Commission. In order that the Government of Haiti may take advantage of the present favorable rate of French exchange, and in order that it may refund the internal loans, meet the awards of the Claims Commission soon to be appointed, [Page 848] pay the immediate and pressing claims recognized by the Protocol, and provide for internal improvements urgently necessary, the Government of the United States strongly recommends that, to carry out provisions Article 6 of protocol, October 3, 1919, the Government of Haiti authorize the Financial Adviser to issue at a rate not less than 95, $15,000,000 of short term notes at not more than 7½% interest and five years duration, callable at the expiration of two years, and at the same time issue $25,000,000 of 30 year 6% bonds, $20,000,000 of this issue to be known as Series A, with interest and amortization payable in New York, to be used as collateral for the $15,000,000 short term notes and eventually to be sold for the retirement of these short term notes; $5,000,000 of the issue of 30 year 6% bonds to be known as Series B, with interest and amortization payable in Port au Prince, to be used in refunding the internal debt.
You may advise the President that this recommendation of the Department is made after mature deliberation in the belief that it is of pressing importance that the authorization to the Financial Adviser recommended be given at the earliest opportunity by the Haitian Government because of the present exceptionally favorable exchange conditions now obtaining. You may further state that it is particularly agreeable to the Department to find itself able to meet the views of the Haitian Government as regards the payment and service of the internal loans above mentioned, in particular since the action contemplated will meet the long-standing desire of Haitian public opinion. Under these circumstances, the Department trusts that the President will provide, with the concurrence of his cabinet, without delay, the authorization to the Financial Adviser recommended by this Government.
As soon as the necessary authorization is obtained, cable immediate report to the Department.
You may explain to the President that Financial Adviser will endeavor to place notes bearing 7½% but as French government has just had to pay 8% it may be necessary for the Financial Adviser to request authority to increase the rate to 8%.