1 As far as I have been able to ascertain, the Banco Central still maintains its legal reserves but there is not much doubt but that it has exceeded its lawful rights in the question of making loans on mortgages and thus a great deal of its assets are tied up in frozen paper of one kind or another. The impression seems to exist that the President does not realize the seriousness of the financial situation due to his being told by his close advisers that everything is all right. I have endeavored to impress upon various officials with whom I have discussed this matter informally the absolute necessity of not allowing the value of the quetzal to start falling below par as this would ruin the credit of the country abroad. Either one of two types of loans might be feasible at present, one: a strictly funding loan plus sufficient money to establish the National Mortgage Credit Bank, such as is now proposed by the Government, or two: a funding loan plus money for the Mortgage Bank and an additional six or seven million dollars for essential public works, principally roads. It is the opinion of a great many people, in which I concur, that this type of loan with the proper control would be the better for the present situation as it would provide employment, increase imports and give the country a chance to recover itself. In order to obtain such a loan it would probably be necessary to pledge a portion of the customs receipts and, while the Government states that it is not willing to do so, it is my opinion that if it is necessary in order to obtain a loan the Government will agree to it. The attitude of the general public has changed to a great extent during the past few months towards the question of a loan. Most of the people, both in and outside of the Government, who have knowledge of such things, freely admit that that is the only thing which will pull the country out of its present bad financial condition and I think that even the general public would approve of a loan but only provided that it was given the strictest control both as to receipts and expenditure... I have [etc.] STANLEY HAWKS 814.51/651 The Acting Secretary of State to the Chargé in Guatemala (Hawks) WASHINGTON, February 20, 1930. SIR: Reference is made to the Legation's confidential despatch No. 2753, dated February 5, 1930, in which it is reported that the President of Guatemala has requested the Legation to extend its assistance to the Government of Guatemala in its efforts to obtain a loan in the United States. This Government, as you are of course aware, cannot undertake to extend direct assistance in matters of this kind. It is accordingly suggested that you inform President Chacón of the Department's regret at its inability to be of assistance to him in the present instance, and to suggest to him that he authorize his representatives in the United States to initiate direct negotiations with responsible banking institutions. The Department, in this connection, can be of assistance and it will be very glad indeed to ascertain for the representatives of Guatemala in the United States the responsibility and standing of any such banking institutions in which they may become interested. For the Acting Secretary of State FRANCIS WHITE I am [etc.] BOUNDARY DISPUTE WITH HONDURAS (See volume I, pages 344 ff.) HAITI THE PRESIDENT'S COMMISSION FOR THE STUDY AND REVIEW OF CONDITIONS IN THE REPUBLIC OF HAITI 1 838.00 Commission of Investigation/63: Telegram The High Commissioner in Haiti (Russell) to the Acting Secretary of State PORT-AU-PRINCE, February 28, 1930-6 p. m. [Received 8:03 p. m.] 27. Commissioners arrived this afternoon and were presented by me to the President. 838.00 Commission of Investigation/132, 138: Telegram RUSSELL The Chairman of the President's Commission for the Study and Review of Conditions in the Republic of Haiti (Forbes) to President Hoover [Paraphrase] [PORT-AU-PRINCE, March 7, 1930.] [Received March 8.] 1. The Commission finds the situation in Haiti critical and the people greatly inflamed. Representatives of large groups of people organized in various patriotic leagues have appeared in public sessions and without exception have stated that they would not accept any election of President by the Council of State. The Council of State is an appointive body which has acted as a legislature in Haiti for about twelve years and which has elected and reelected President Louis Borno. The demand which has been made by practically all those who have appeared, and supported as advisable by the Archbishop speaking for the Church, is for the restoration of representative government by a legislature elected by the people and their choice of a President. This, they state, is the only way that can satisfy the popular demand; that any other course will not be accepted by the people and will be opposed by acts of violence. 1 Continued from Foreign Relations, 1929, vol. 1, pp. 204–208. 2 The Commissioners were W. Cameron Forbes, Chairman, Henry P. Fletcher, Elie Vezina, James Kerney, and William Allen White; see report of the President's Commission for the Study and Review of Conditions in the Republic of Haiti, p. 217. 198 Quoting marine officers, the observations of High Commissioner Russell himself and General Frank E. Evans, representing the National Guard, which is the Haitian police force, all agree that the situation is tense and likely to result in bloodshed, and in the present state of the public mind some small incident may precipitate serious consequences. With the approval of High Commissioner Russell, the Commission has convened a group of five leaders representing the various patriotic leagues, and represented to the Commission as likely to be able to control the situation, and at the Commission's suggestion they have issued a statement calculated to calm the public mind. After considerable discussion it was suggested to them that a compromise candidate for the Presidency might be found, some person wholly out of politics, neutral and satisfactory to both sides, and willing to accept the election as President until a duly elected body can be convened. On the one hand, the objection of representatives of the patriotic leagues, that the public and they would not recognize the election by the Council of State, has been met by their proposal to convene delegates from the country at large who will endorse and select the candidate agreed upon. On the other hand, after this has been done, the plan is for President Borno to secure the election of the compromise candidate by the Council of State. The new President is to agree to call the election of the two chambers of the legislature as soon as possible and then present his resignation, permitting the National Assembly to elect the new President. High Commissioner Russell has fully endorsed this program and he believes that President Borno will accept it. The five representatives with whom the Commission has talked are confident that they can find the necessary candidate acceptable to both sides and to the general public. This plan contemplates that only the candidate designated by the plan outlined above and elected by the Council of State should be recognized by the Government of the United States as President with the understanding that the plan will be carried out in its entirety. In trying to effect a compromise which will satisfy the popular demand and at the same time comply with the provisions of the constitution with regard to the election of a President, the Commission has made it clear to the five representatives with whom it has discussed the matter that it was acting entirely unofficially. The Commission understands that High Commissioner Russell approved and is telegraphing the Department of State to this effect. If you approve this plan, the Commission would appreciate a reply at the earliest moment because of the danger of premature publicity which is imminent. The time is very short because the leaders desire to submit and receive from the public assemblies throughout the 528037-45- -19 Republic of Haiti the endorsement and approval of the compromise candidate before April 14. On Sunday morning, March 9, the Commission will leave for a tour of the Republic, but arrangements have been made to receive your reply promptly. FORBES 838.00 Commission of Investigation/132: Telegram President Hoover to the Chairman of the President's Commission (Forbes) [Paraphrase] [WASHINGTON, March 8, 1930. I concur entirely in the recommendation set forth in your telegram No. 1 of March 7. HERBERT HOOVER 838.00 Commission of Investigation/84 Press Release Issued by the President's Commission on March 9, 19303 The President's Commission has suggested that the various elements composing the opposition to the present Haitian Government, should organize a group of delegates satisfactory to themselves and designate some neutral and non-political candidate, satisfactory also to President Borno, who should then receive their votes and also be elected regularly. The President thus chosen will call a popular election at the earliest possible date and present his resignation to the new Legislature, so that it will elect the President for the regular term. This plan has the approval of President Hoover and has been accepted, in principle, by both of the Haitian sides. Details have to be worked out. The Commission has no candidate to present. 838.00 Commission of Investigation/132, 143: Telegram The Chairman of the President's Commission (Forbes) to President Hoover [Paraphrase] [CAP-HAITIEN, March 10, 1930.] [Received March 11.] 3. The President's Commission understands that its plan was acceptable both to President Borno and the Opposition. It was made public on the afternoon of Sunday, March 9th. The President's Commission left Port-au-Prince on Sunday morning, March 9th, for Copy transmitted to the Department by the High Commissioner in Haiti in his despatch No. 1643, March 10, 1930; received March 14. |