838.51/8–2544
The Ambassador in Haiti (Wilson) to the Secretary of State
[Received August 30.]
Sir: I have the honor to transmit herewith for the information of the Department a copy, in original and translation, of a letter dated August 24, 194429 addressed to the Haitian Minister of Foreign Affairs30 by the Minister of Finance,31 which has been transmitted to me by the former. In this communication, the substance of which is forwarded in my airgram no. A–442 dated August 26, 1944,32 Mr. Lacroix refers to the conversation between Ambassador Liautaud and Mr. Collado, as reported by the former, and outlines a counter proposal reducing to $400,000 the initial amortization in the fiscal year 1944–45 of the 1922–23 bond issues and suggesting that reconsideration be given to this subject at the close of that fiscal year. Mr. Lacroix justifies this counter proposal by citing the necessity to set aside $800,000 to retire the two notes of the Export-Import Bank maturing in the next fiscal year, and the probability that disturbed business conditions will make serious inroads on the income of the Haitian Government.
There seems to be no doubt that the question of amortizing the bonds of the 1922–23 issues has been occasioning considerable concern to the Haitian Government. On August 23 I called on President Lescot33 at his request. He received me in his private office, where were assembled the Ministers of Foreign Affairs, Finance and Agriculture and Education.34 I gathered immediately that this meeting had been occasioned by the receipt of the despatch from Ambassador Liautaud setting forth the Department’s proposal that Haiti should set aside $700,000 for amortization purposes. The President informed me with considerable emphasis and display of emotion that it would be practically impossible to meet the Department’s suggestion, which would consume the budgetary reserves of the Haitian Government and leave nothing for such vitally important matters as the improvement of Haitian agriculture through irrigation and other assistance to the farmers. It was necessary, he went on, for Haiti to render this assistance in order to place itself in a stronger position to meet the economic uncertainties of a post-war period when the United States might be disinclined, owing to more pressing problems, to give help [Page 1179] to Haiti. Furthermore, such agricultural development would tend to produce export surpluses which could be shipped to other regions of the Caribbean area. The United States Government, by insisting on the allotment of all of Haiti’s available funds to the service of its external debt, would prevent the Haitian authorities from improving the lot of the Haitian peasant and increasing the wealth and welfare of the country. In making this plea, the President adverted to the fact that the Government had proved the honesty of its intentions by a punctual payment of current bond interest, as well as of a certain portion of that interest which had been deferred during the Vincent administration.35 Before concluding, the President referred to the advisability of converting the six percent bonds into a long term issue bearing interest at four percent.
Minister Lacroix then explained to me at some length the arguments contained in his letter to the Minister of Foreign Affairs. I discussed these matters with him and pointed out to him and to the President that while the United States Government had no desire to impose any undue hardship on the Haitian Government, it must be kept in mind that the legitimate interests of the bond holders must be protected.
It appears to me that the most important factor in this matter is the accuracy of the Haitian Government’s estimate of the economic conditions which will prevail during the coming fiscal year. Although I have no desire to question the sincerity of Minister Lacroix’s views, the information which I have been able to obtain thus far indicates that opinion in business circles is not as pessimistic as the Minister’s. It is certain, however, that the cessation of the Cryptostegia program36 has occasioned a decrease in business activity.
In order to reach a just appraisal of the Haitian Government’s arguments, consideration must also be given to the political situation and the stability of the Lescot administration. Although, as I have stated in earlier despatches, there are no indications of any dangerous movement to overthrow President Lescot, it should be kept in mind that there is a latent discontent occasioned by wide spread poverty and the financial prosperity of certain circles which surround the President, which give rise to rumors, not entirely unjustified, concerning the manner in which certain of these persons obtained their wealth. It seems clear, therefore, that if the Haitian Government is permitted to spend larger amounts on agricultural development, this will tend to stabilize its position and close the mouths of critics.
Respectfully yours,