Regarding the Protocol it was forwarded to the Department in my No. 352
of October 6, 1919.56
[Enclosure 1—Translation57]
Convention between the Republic of Haiti and the
Banque Nationale de la République d’Haiti, Regulating the
Monetary Reform in Haiti; Signed at Port au Prince April 12,
1919
Between the undersigned:
(a) The Government of the Republic of Haiti
represented by Mr. Fleury Féquière, Secretary of State for Finance
and Commerce, assisted by Mr. John McIlhenny, Financial Adviser;
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And (b) The Banque Nationale de la République
d’Haiti represented by Messrs. O. Scarpa, Manager of that
establishment, assisted by Mr. W. H. Williams, Assistant
Director;
The following has been agreed:
Article 1. The Bank will cause to be
brought to Haiti and will hold on deposit, to the credit of an
account which will be designated and known under the name of
“Retirement Fund” (Fonds du Retrait), the
balance of the ten million francs of the loan of 1910, including the
five hundred thousand dollars transported to New York in December
1914, increased by the interest at 2 per cent (two per cent) a year
on this sum dating from December 1914 until December 31, 1918; it
will also place to the credit of the said account all other balances
or increases of balances belonging to or pertaining to the monetary
reform or the guarantee of retirement on December 31, 1918.
These funds on the date of December 31, 1918, are composed as
follows:
- (a)
- Monetary reform $1,596,125.28.
- (b)
- Guarantee of retirement $139,539.61.
$1,735,664.89, legal tender of the United States, the total to be
placed to the credit of the “Retirement Fund “account.
Art. 2. It remains, however, understood
that, with the consent of the Government of Haiti, the Bank may keep
a sum not exceeding half of the amounts to the credit of the
“Retirement Fund “account on deposit in a national bank of New York,
at the selection of the Government of Haiti and to its credit, these funds remaining subject to the uses provided
for in the present agreement. In this case the Government
of Haiti will profit by the interest earned by the amounts deposited
to its credit.
Art. 3. As soon as the Bank shall have
complied entirely with the provisions of Articles 1 and 2 above,
which it agrees to do as soon as
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it has received its provisional notes hereinafter
mentioned, the Government promises to commence to retire
from circulation the paper money now outstanding, the amount of
which, according to the declarations of the Government,is:
| (1) |
Notes of 1 and 2 gourdes (issues of 1903–1904–1915,
substitution of 1892) |
G. 8,572,147.00 |
| (2) |
Notes of 5 gourdes (issue of 1908) |
305,825.00 |
|
Total gourdes |
G. 8,877,972.00 |
This retirement will be announced in the Moniteur and the Government will proceed with it as
promptly as possible; it should complete it within one year counting
from the date on which the announcement is made of the issuance of the Bank’s permanent notes hereinafter referred
to.
Every holder of the aforesaid paper money shall have the right to
require its exchange for the legal money of
the United States of America at the rate of five gourdes for one dollar, or, if he so desires, to accept
in exchange at par the new bank notes hereinafter mentioned.
The paper money which will not have been presented for exchange
within the time indicated will be demonetized ipso
facto and without the necessity of recourse to any other
formality.
Art. 4—The Bank will be entrusted with the
operations of the retirement mentioned in Article 3. It will debit
the “Retirement Fund” account with the value of the paper money
retired from circulation at the rate of five gourdes for one dollar plus the expenses of insurance and
transportation from the provinces to Port-au-Prince on the notes
redeemed in its branches and from Port-au-Prince to the provinces on
funds sent in exchange. It can not claim any other expenses nor
demand any commission whatsoever for the services rendered.
All paper money exchanged will forthwith be cancelled by perforation
or otherwise by the Bank and turned over immediately to a commission
instituted by a decree of the President of the Republic, composed of
three members, of whom the first will be chosen from a list
submitted by the Minister of Finance, the second from a list
submitted by the Financial Adviser and the third from a list
submitted by the Bank. The Commission after verifying the notes will
immediately burn them.
Before redeeming doubtful notes, if any are presented, the Bank will
submit them to this same commission which will pronounce upon their
validity.
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Art. 5. If the funds of the “Retirement
Fund” account shall be insufficient for the redemption of the
8,877,972 gourdes of paper money in
circulation or the part thereof presented for exchange within the
period provided for in Article 3 above, the Bank will advance to the
Government the amount necessary for the purpose without any charge
for interest or commission, in consideration of the Government’s
pledge not to reduce the taxes created for the retirement guarantee
and not to change the appropriation thereof so long as the advances
made by the Bank by virtue of the present article have not been
fully reimbursed, either by means of the said taxes or by
anticipation, whichever better suits the Government.
Art. 6. In virtue of the privilege
conferred on it by its concession contract, the Bank will issue its
notes as follows:
- 7,500,000 gourdes in notes of 1 gourde;
- 5,000,000 gourdes in notes of 2 gourdes;
- 5,000,000 gourdes in notes of 10 gourdes;
- 2,500,000 gourdes in notes of 20 gourdes;
These notes will bear on the reverse the following notice:
This note, issued by the Banque Nationale de la République
d’Haiti, by virtue of its concession contract, and in
conformity with the Convention of April 12, 1919, is payable
to the bearer in legal money of the United States of America
at the rate of five gourdes for one
dollar when presented at the counter of the Bank at
Port-au-Prince or with allowance for delay in transportation
at its counters in the provinces.
Each type of banknote will be divided into series of one million gourdes, each series will bear a
distinctive letter and each note will be numbered consecutively. The
signatures prescribed by Article 10 of the concession contract will
be engraved upon these bills.
Art. 7. The Bank will put in circulation
fifteen million gourdes of its aforesaid
notes or such part thereof as may be necessary to maintain the rate
of exchange at five to one, simultaneously
with the beginning of the operations of the retirement prescribed by
Article 3 of the present convention. The balance of the issue of twenty million gourdes authorized by these
presents will be put in circulation whenever the need is felt. This
operation will be governed by Article 11 below and by all the other
stipulations of the present convention; however, it can never be
considered as the fulfillment of the obligation assumed by the Bank
in Article 11 of these presents, to place in circulation from time
to time the quantity of notes required for the needs of commerce.
The notes of the Bank will have no value as money until after their
issuance has been announced in the Moniteur.
Once this announcement is made, the bills will be considered as
lawful money throughout the Republic. They shall
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be legal tender without limitation and
will be accepted by all offices of the Public Treasury in payment of
sums due to the Government in gourdes.
Art. 8. The Bank obligates itself to redeem
its notes in legal money of the United States at the rate of five gourdes for one dollar, at sight if they
are presented at its establishment in Port-au-Prince, and with
allowance for delay in transportation if they are presented at its
principal branches in Haiti. In the latter case the Bank shall remit
the necessary funds to the branch by the first regular means of
transportation available.
This delay can not be invoked by the Bank until after the exhaustion
of the daily reserve which each one of its branches should have on
hand to meet the conversion. The list of the branches which should
have a daily reserve and the schedule of the daily reserves which
they should thus maintain will be determined by the Manager of the
Bank at Port-au-Prince and approved by the Financial Adviser.
Art. 9. The Bank will at all times maintain
in its vaults in Haiti cash reserves set apart exclusively for the
redemption of its notes in circulation. This cash reserve will
consist of legal money of the United States of America to an amount
equivalent, at the rate of five to one, to at
least one-third of the total amount of the notes of the Bank in
circulation; howevor, it remains understood that a part of this cash
reserve which should never exceed half may be deposited in a
national bank of New York, as a sight deposit, this national bank
being agreed to by the Government of Haiti.
The difference between the amount of this cash reserve and the total
amount, at the rate of five gourdes to one
dollar, of the notes of the Bank in circulation will at all
times be represented by commercial paper bearing two good signatures
and of a maximum maturity of one hundred and twenty days. By
commercial paper is understood notes and bills of exchange resulting
from commercial operations, that is to say, issued or drawn for
industrial or commercial needs, but excluding all notes or bills
having for object the carrying on margin of stocks, bonds, or other
securities. One of the two signatures may be replaced by merchandise
or by acceptances, warrants, receipts, or documents representing
them. Commercial paper based on operations of interest to Haitian
commerce shall be given preference in so far as may be deemed
possible by the Bank, which remains the sole judge in the
matter.
It remains understood that the Bank may increase the proportion of
the said cash reserve beyond the prescribed minimum of one-third; in
that case it may decrease proportionally the amount of the
commercial paper mentioned above.
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Art. 10. In case of the liquidation of the
Bank, its notes in circulation will have a preferred lien on all its
assets of whatsoever nature, with the exception of the assets
representing the deposits made by the Government of Haiti or by the
General Receiver of the Haitian Customs.
Art. 11. The Bank specifically agrees that
the total amount of its notes in circulation will never exceed the
figure equivalent, in legal money of the United States of America,
to three times its paid in and unimpaired capital, with the
exception noted below.
Whenever the needs of commerce require additional circulation of bank
notes in gourdes, the Bank will put in circulation notes to the
amount required, either against a proportional increase of its
capital or against special security submitted to the approval of the
Government.
Failing to do this, the Bank agrees not to oppose and not to place
any obstacle in the way of such reasonable measures as the
Government may see fit to take with a view to obtaining the quantity
of money required.
Art. 12. The Bank will replace by new notes
at its own expense such of its notes as may become unfit for
circulation.
Any counterfeiting of the notes issued by the Bank will be punished
by law. Likewise the issue, attempt to issue and the circulation of
fiduciary money of all kinds: chips, coupons, scrip, etc., designed
to replace money even for a limited use, will be prohibited and
punished. It is well understood that this does not affect the right
of the Government provided for in the last paragraph of Article
11.
Art. 13. The Bank agrees to pay to the
Government an interest at the annual rate of one per cent on the sum
by which the daily circulation of its notes may exceed ten million gourdes.
The profits resulting from the non-presentation of certain of the
notes of the Bank for final redemption will be divided equally
between the Government and the Bank, after the deduction of all the
expenses occasioned by the said redemption.
Art. 14 If experience shows that the
quantity of fractional nickel coin now in circulation is too great
for the needs of the country, the Government will take the necessary
measures to retire the excess in circulation beginning with the fifty centime coins.
Art. 15. In order to avoid the possibility
of a monetary crisis during the period of the retirement of the
paper money of the Government and as long as this retirement
continues, the Government obligates itself to prohibit the
importation or exportation of all non-Haitian money, excepting such
as may be necessary for the needs of commerce in the opinion of the
Financial Adviser.
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Art. 16. The Bank renounces all rights and
privileges resulting from its concession contract which may conflict
with the present convention.
Art. 17. Pending the printing of the Bank’s
permanent notes provided for in Article 6 above, the Bank may issue
provisional notes to an amount not exceeding seven
million gourdes, which will be subject in all respects to
the same conditions provided for in the present convention for the
permanent notes.
These provisional notes will be retired by the Bank at its own
expense as soon as the engraved permanent notes may be obtained.
The two million gourdes of surcharged notes in
circulation at the present time are included in the seven million gourdes of provisional notes
and are subject to this same transitory provision.
It is well understood that the retirement of the seven million gourdes in provisional notes must be carried
out within a period of two years at least and three years at
most.
Art. 18. The Financial Adviser will have
the right of inspection of all operations of the retirement as well
as of the provisions established above for the maintenance of the
reserves, cash and securities, applicable to the fiduciary
circulation, and he may at any time inspect, either personally or
through the intermediary of a competent representative, the accounts
of the Bank having to do with the said circulation.
Done and signed in triplicate, at Port-au-Prince, April 12, 1919, in
the 116th year of independence.
- Fleury Féquière
- John McIlhenny
- O. Scarpa
- W. H. Williams
