838.51/1019: Telegram
The Secretary of State to the Minister in Haiti (Bailly-Blanchard)
104. Your 90, November 13, noon.
The Department desires you to inform the President that the Department is willing to accept the suggestion of the Haitian Government that the amount of the short-term loan be modified to $11,000,000, provided that the short-term notes be issued for a period of five years with the right of retirement after two years at a slight premium, as otherwise the New York banks will not take the notes; provided further that $15,000,000 of 30 year bonds at 6 per cent be issued as collateral for the eleven millions of short-term [Page 850] notes as the banks will not accept less; and further, that there be issued five millions of 30 year 6 per cent bonds to be used solely for the retirement of the funded debt and the floating debt. These $5,000,000 of 30 year bonds will be a separate series, will have its interest and amortization paid in Haiti, and will be in all particulars an internal loan. For this reason it cannot be objected to by the Haitian Government on the ground that the flotation of such a loan would exteriorize the internal debt. The application of what money remains after the payment of the external and internal debt will be made in accordance with the provisions of Article 7 of the Protocol.
You may further advise the President that the Department is glad to be able to agree to the proposition of the Haitian Government as to the modification of the amount of the short-term loan and hopes that in view of its agreement to this feature of the counter proposition of the Haitian Government, the Haitian Government will at once signify its approval of the features of the Department’s proposition as above set forth. It is important that you impress upon the President the fact that the terms upon which the loan can now be floated are in all probability far more favorable than any terms which can be obtained at a later date, and that the Haitian Government accept the Department’s proposal immediately. If such approval is forthcoming, the Government’s authorization should at once be sent by mail to McIlhenny.
Prompt action is essential. Please cable action taken and keep the Department informed by cable of all developments.