838.51/3964a: Telegram

The Secretary of State to the Minister in Haiti ( Mayer )

97. Your 100, June 22, 2 p.m.12 Lescot13 has also informed the Department that Groven has offered a loan to the Haitian Government of $3,000,000 guaranteed by the communal revenues.

Please inquire of President Vincent whether the Haitian Government has in mind an operation of this kind. If his answer is in the affirmative, please invite his attention to the provisions of Article XVII of the accord of August 7, 193314 and say that the Fiscal Representative would be obliged to withhold his accord since the ordinary revenues of Haiti after defraying the expenses of the Government are inadequate to assure the final discharge of such an obligation.

Should the President’s answer be in the affirmative, you may also consider that this is an appropriate time to go at length into the economic situation of the country. You may say that this Government is giving attentive consideration to the problems which have arisen in this hemisphere as a result of the closure of European markets for agricultural products and that Haiti will, of course, benefit by any plan which may be evolved. Meanwhile, the coffee situation presents a serious problem for Haiti which may call for severe retrenchments [Page 888] in Haitian government expenditures and the mobilization of all possible revenues. You may say that the Department has only recently indicated its sympathetic interest in the problem by assuring the continuation of the White program throughout the fiscal year 1940–41 at the rate of $160,000 a month. In addition, the Export-Import Bank has now agreed to reduce its interest rate beginning June 30, 1940 from 5 to 4 percent. It is hoped that the amount of the token amortization payment may be reduced when the next moratorium agreement has been reached. You may add that Haiti will be kept in mind in connection with any defense projects which may become necessary, the expenditures for which might benefit Haiti’s economy.

On the other hand, however, the Department hopes that the Haitian Government will cooperate by organizing its communal revenues in a manner which will provide for their efficient administration and will be willing to apply the increased returns which might be produced to essential government expenditures until world conditions in general, and Haiti’s financial situation in particular have returned to normal. You may add that, in order to balance the Haitian budget, other economies—possibly a cut in government salaries—may have to be envisaged.

If, for any reason, you feel that the time is inopportune to take the steps mentioned above, please report by telegraph.

Hull
  1. Not printed; this telegram informed the Department that a Mr. Eugene Groven “is endeavoring to arrange in New York with Swiss and Dutch interests for a loan to the Haitian Government of $4,500,000 …” (811.111 Groven, Eugene).
  2. Elie Lescot, Haitian Minister in the United States.
  3. Foreign Relations, 1933, vol. v, pp. 755, 759. Article XVII reads: “Without the accord of the Fiscal Representative no new financial obligation will be assumed unless the ordinary revenues of the Republic, after defraying the expenses of the Government, shall be adequate to assure the final discharge of such obligation.”