838.51/2116
The French Ambassador ( Claudel ) to the Secretary of State
Mr. Secretary of State: By a note dated the first of this month, Your Excellency was pleased to answer my note of May 3 last, relative to the exchange of certain bonds of the National Railway Company of Haiti for 6 per cent bonds of the Republic of Haiti going by the name of bond “C”.
The first part of Your Excellency’s note refers to a paragraph of the contract entered into by the Haitian Government and the Metropolitan Trust Company of New York, which was enacted into a law on the 17th of June, 1925, and set the date of March 31, 1926, for the last time limit in which the bonds of the National Railway Company of Haiti could be exchanged for “C” bonds. On the ground of that provision, Your Excellency writes: “From the above it would appear, therefore, that the Financial Adviser … had no authority to approve the exchange of bonds … deposited subsequent to March 31, 1926.” And you add: “In point of fact, however, the period for the exchange was, at the instance of the Haitian Government, extended from the original ninety days agreed to by the bondholders for more than two years.”
Your Excellency would permit me again to lay stress on the unilateral character of that decision made by the Financial Adviser of the Haitian Government. That decision, if maintained, would be tantamount to a repudiation of its engagements by the Haitian Government. Now, that Government was always so adverse to limiting the time for exchange that the first extension of time,—as Your Excellency will remember,—was requested by the Haitian Government itself. It appears, furthermore, from a letter from Mr. Farnham to Mr. Garreau-Dombasle, Commercial Attaché of the Embassy, of which I have the honor to enclose a copy,38 that President Borno was [Page 221] not informed of the terms of the contract made by the American Financial Adviser with the National City Bank, or that, if that instrument was made known to him, he had not grasped the scope of the limitative clause therein inserted.
In the second part of your note, Your Excellency informs me that the final settlement of the matter might be reached through a new agreement, now under consideration, between the Haitian Government and the National Company.
Now it appears from information I have and in particular from Mr. Farnham’s letter, of which a copy is enclosed, that as early as 1926, a plan of reorganization of Haitian railways had been drawn up by the Company, remodeled by the American agents in Haiti and approved by the Department of State. It is only a few weeks ago that the text was submitted to the Haitian Government for its ratification. Now, even before the said Government had time to look into the draft, it was, according to Mr. Farnham, entirely remodeled by the combined action of the American agents in Haiti and the Haitian officials.
Under those conditions, it is impossible not to arrive at the conclusion that the American authorities in Haiti, fully aware of the more and more critical condition of affairs of the National Company, seek, for reasons which furthermore I am unable to see, a forced sale, which will necessarily be disastrous, of the property of the said Company.
Considering all of the foregoing, I take the liberty of urging Your Excellency in the most pressing manner that the case be given further consideration so that the Financial Adviser of Haiti may, without delay, authorize the delivery to Mr. Farnham of the series “C” bonds that are necessary for the exchange of the former securities of the Railway Company which are now or may hereafter be produced at the Metropolitan Trust Company.
I am satisfied that Your Excellency will perceive that the viewpoint I now offer is legitimate and I beg you to accept [etc.]