Lapas attēli

All this amounts to saying, that the rational and necessary foundation of democratic suffrage is, in a conscious electoral body, the organization of parties with platforms.

Our national history has only presented up to now two real parties, the National party which extols the principle of a strong executive authority, and the Liberal party, enthused by parliamentarism. Both have disappeared from the political scene through lack of interior discipline and of support by a real public opinion.

The Government is working to prepare the way to the intelligent and disciplined democracy, to the solid organization thereof. The present electoral law is recognized by all as incompatible with the sincere expression of popular will. A new law, now in the course of preparation, will be presented at the next Ordinary Session; it will offer all the possibilities for the full functioning of political parties, and for the constitution of an intelligent electoral body, capable of exercising, without danger to the Republic, the sovereign attributes of universal suffrage.

And when the hour shall have struck, an hour which will be hastened, let us hope, by the wisdom of our citizens, the President of the Republic will be proud to put into operation the solemn prerogative which the constitution has consigned to his patriotism, his judgement, and his conscience, to fix the date of the legislative elections.

Until that time, I advise you, Mr. Prefect, the Council of State will continue to follow the formal provision which, in this same constitution, has delegated to it the functions of the legislative power.

And you will take care that the approaching elections of January 10, 1926, shall be exclusively communal.



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The French Embassy to the Department of State

[Translation ®]


In January, 1923, the Minister of Finance at Port-au-Prince requested the Haitian Government to meet the service of its 5 percent


8 For previous correspondence regarding request of the Union Parisienne for arbitration of the question of gold payments on this loan, see Foreign Relations, 1924, vol. II, pp. 293 ff.

File translation revised.

loan of 1910 in gold. The matter was brought to the attention of the Federal Government in a note from Mr. Jusserand of April 10, 1923.10

As the question was not settled, the Banque de l'Union Parisienne, one of the banks that issued the loan, applied directly, in November 1923, to the Minister of Finance of the Republic of Haiti and pleading the right derived from Article 30 of the loan contract, 11 asked that the dispute be referred to arbitration. This article reads as follows: “The protests that may arise as to the execution of this contract shall be referred to two arbitrators in Paris. ..." The representatives of France at Washington and at Port-au-Prince were instructed to support this request at the seats of the Haitian and United States Governments. The question formed in particular the subject of two notes from the Embassy dated June 12 and September 5, 1924.12

The Haitian Government offered several arguments in reply to that request, which may be summed up as follows:

(1) The bondholders who are not parties to the loan contract cannot claim the benefit of Article 30 of that contract;

(2) The Union Parisienne being one of the three banks parties to the contract, is not competent to act alone without the other two banks concurring;

(3) It is impossible to admit that the Union Parisienne be competent to prefer any claim whatsoever against the Haitian Government in the name of the holders as the 1910 contract does not in any way confer such a right upon it;

În its capacity as agent of the Haitian Government the Union Parisienne is under the obligation to act for the interest of the Haitian Republic and not for that of the holders.

These arguments have already been met point by point by the French Government in the following manner:

(1) The objection drawn from the fact that the holders are not parties to the contract of issue and have no claim to the provisions of that contract, is untenable, since those holders are no longer concerned, the claim being preferred by a bank which is a party to the contract;

(2) There is nowhere in the contract of issue any mention of the fact that a claim, in order to be entertained, must be presented by all three banks acting in accord. In the absence of such article each one of the contracting parties is at full liberty to act;

(3) It is not necessary to know in whose behalf the Union Parisienne is acting when it lays its claim before the Haitian Government. The Union Parisienne acts in its capacity as issuing bank, party to the contract. In so doing, it serves its own interests; the commission provided in its favor by the contract necessarily increases when it is admitted that the service of the loan must be effected in gold. That the holders of bonds will profit by the intervention of the Union Parisienne

* Not printed.


Text of loan contract printed in Le Moniteur, Oct. 26, 1910. * Foreign Relations, 1924, vol. 11, pp. 294 and 296.

is a question of fact, not of law. On the other hand, no article in the contract warrants the claim of the Haitian Government that the Union Parisienne is to be considered as its agent. That bank undertook certain obligations which are well defined (to take up 130,000 bonds for delivery), in return for which certain advantages, also well defined, were assured to it (one quarter of one percent commission); but it did not assume any general obligation to the Haitian Government, as also it receives no compensation beyond the commission provided for the service of the loan. What, moreover, would article 30 of the contract signify if it could be invoked only by the Haitian Government?

No answer has yet been received to that statement of the French Government either from the Haitian Government or that of the United States. The right of the Union Parisienne to claim the benefit of article 30 is obvious and it is not easily understood why its request has not yet been met. The question for the present is not whether the claim of the Union Parisienne to have the service of the 1910 loan in gold, is or is not well founded. It is merely a question of procedure duly provided by the contract and which the Haitian Government may not decline without ignoring its own signature.

The Ambassador of France is satisfied that the Department of State, acknowledging that the objections raised by the Haitian Government to the request of the Union Parisienne are untenable, will bring to bear upon it the necessary amount of pressure to cause satisfaction to be given to a claim that is in every respect well founded.

[WASHINGTON,) March 31, 1925.

838.51/1776 The Secretary of State to the French Ambassador (Daeschner)

WASHINGTON, May 7, 1925. EXCELLENCY: I have the honor to refer to your Embassy's notes of September 5, 1924,18 and March 31, 1925,14 in relation to the desire of your Government that the Government of the United States should endeavor to induce the Haitian Government to reconsider its refusal to accept the proposition of the bank of the Union Parisienne to arbitrate the question whether the bonds issued by virtue of the loan contract of September 9, 1910 between the Government of Haiti and the representatives of four banking institutions are payable in gold.

In your Embassy's note of March 31, 1925, it is stated "there is no necessity of finding in whose behalf the Union Parisienne is acting

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when it lays its claim before the Haitian Government. The Union Parisienne acts in its capacity as issuing bank, party to the contract. In so doing, it serves its own interests; the commission provided in its favor by the contract necessarily increases when it is admitted that the service of the loan must be effected in gold”.

The loan contract in question provides that the bank of the Union Parisienne shall act as the fiscal agent of the Haitian Government for the service of the loan and shall receive a commission upon the amounts expended by the Haitian Government in such service. Therefore it is entirely correct, as stated in your Embassy's note last mentioned, to say that the material interests of the bank would be subserved by the great increase in the amount which the Haitian Government would be obliged to pay should it be determined that the loan is payable in gold. However, it seems to be an unusual procedure and entirely outside the generally accepted view of an agent's rights and duties for an agent to seek to compel his principal to increase his expenditures in order that the agent's commission may correspondingly increase and the Government of the United States is unable to believe that a question of this nature was contemplated in the minds of the contracting parties when they entered into the agreement for arbitration provided in Article 30 of the loan contract with respect to matters arising regarding the performance or execution of the contract. This article provides as follows:

“The controversies which may arise regarding the execution of the present contract shall be submitted at Paris to two arbitrators, namely, one by the Haitian Government, the other by the Bankers, and who must render their decision within two months. Should they not agree, the said arbitrators shall name a third to cast a deciding vote. If they cannot agree upon the appointment of the third arbitrator, this third arbitrator shall be appointed at the request of the arbitrators, or at the request of the most diligent party 15 by the Court of Arbitration at The Hague.”

It therefore appears that Article 30 of the loan contract contemplates the submission to arbitration of controversies only regarding the execution of the contract. With respect to this provision as bearing upon the present request of the bank of the Union Parisienne, it may be said that it would seem that this bank, which, as stated, is the fiscal agent of the Haitian Government under the contract, should regard the contract as executed so far as concerns the question of the repayment of the loan when the Haitian Government delivers to it an amount in French francs sufficient to pay the bonds at their face value in such francs, in addition to the commission to which the bank is entitled on such payment. Moreover, it seems clear to me that in making such request the bank is in reality acting as the agent of the bondholders who are not parties to the loan contract and therefore have no standing thereunder to request arbitration of the question under consideration. In this view of the matter it appears to me that the bank is going entirely outside of its province under the loan contract and is presenting a request which the Haitian Government is fully within its rights in rejecting as without any warrant.

15 i. e., the party most nearly ready.

In view of the foregoing it would not appear essential to enter into further discussion of the matter but there are additional reasons which may be adduced to support the action of the Haitian Government in refusing the request of the bank.

As above stated the loan contract was made between the Government of Haiti and four bankers who appear to have been treated as a unit throughout various provisions of the contract. Thus in Article XXIV of the contract the bankers undertake to accept the bonds of the loan of 1910 and to pay the Haitian Government therefor forty-seven million francs and in Article XXVI of the contract the bankers reserve the right to issue the loan by public subscription or otherwise. In Article XXIX the bankers are given a preferential right to future loans for a period of twelve years. In all these articles the bankers appear to be treated as a unit, as do they also in Article XXX which relates to the question of arbitration.

In view of the last mentioned provisions of the loan contract it would seem to have been the intention of the parties that all of the bankers must act in order to make an effective request for arbitration and not merely one of them as in the case as presented by you. Should the Government of Haiti grant the request of the bank of the Union Parisienne and enter into an arbitration with it on the question presented, it might well be argued that any

award rendered would be void since all persons interested in the subject matter of the controversy had not joined in the submission to arbitration.

The loan contract in question is presumed to have come into effect so far as the Government of Haiti is concerned by the law of ratification which was passed by the Haitian legislature and which incorporates the loan contract. In this connection it may be observed that Article 69 of the Haitian Constitution of 1889 which was in force in 1910 when the loan contract was made and the law of ratification passed provides as follows:

“The legislative power enacts laws on all subjects of public interest.

“The initiative of legislation belongs to each Chamber and to the Executive power.

“Nevertheless, the appropriation laws and laws concerning the assessment, distribution, and manner of payment of taxes, creation

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