The following are from the Nation of September 11, 1920

Why Haiti Has No Budget

AT the session of the Haitian National Assembly on August 4, the President of the Republic of Haiti and the Haitian Minister of Finance laid before that body the course of the American Financial Adviser which had made it impossible to submit to the Assembly accounts and budgets in accordance with the Constitution of Haiti and the Haiti-American Convention. The statement which follows is taken from the official Haitian gazette, the Moniteur of August 7.

Message of the President

Gentlemen of the Council of State: On account of unforeseen circumstances it has not been possible for the Government of the Republic to present to you in the course of the session of your high assembly which closes today (August 4) the general accounts of the receipts and expenditures for 1918-1919 and the budget for 1920-1921, in accordance with the Constitution.

It is certainly an exceptional case, the gravity of which will not escape you. You will learn the full details from the report which the Secretary of Finance and Commerce will submit to you, in which it will be shown that the responsibility for it does not fall on the Executive Power....

In the life of every people there come moments when it must know how to be resigned and to suffer. Are we facing one of those moments? The attitude of the Haitian people, calm and dignified, persuades me that, marching closely with the Government of the Republic, there is no suffering which it is not disposed to undergo to safeguard and secure the triumph of its rights.

Dartiguenave

Report of the Secretary of Finance and Commerce

Gentlemen of the Council of State: Article 116 of the Constitution prescribes in its first paragraph: "The general accounts and the budgets prescribed by the preceding article must be submitted to the legislative body by the Secretary of Finance not later than eight days after the opening of the legislative session."

And Article 2 of the American-Haitian Convention of September 16, 1915, stipulates in its second paragraph: "The President of Haiti shall appoint, on the nomination of the President of the United States, a Financial Adviser, who shall be a civil servant attached to the Ministry of Finance, to whom the Secretary shall lend effective aid in the prosecution of his work. The Financial Adviser shall work out a system of public accounting, shall aid in increasing the revenues and in their adjustment to expenditures...."

Since February of this year (1920) the secretaries of the various departments, in order to conform to the letter of Article 116 of the Constitution, and to assure continuity of public service in the matter of receipts and expenditures, set to work at the preparation of the budgets for their departments for 1920-21.

By a dispatch dated March 22, 1920, the Department of Finance sent the draft budgets to Mr. A. J. Maumus, Acting Financial Adviser, for preliminary study by that official. But the Acting Adviser replied to the Department by a letter, of March 29: "I suggest that, in view of the early return of Mr. John McIlhenny, the Financial Adviser, measures be taken to postpone all discussion regarding the said draft budgets between the different departments and the Office [of the Financial Adviser] to permit him to take part in the discussions."

Nevertheless, the regular session was opened on the constitutional date, Monday, April 5, 1920. Mr. John McIlhenny, the titular Financial Adviser, absent in the United States since October, 1919, on a financial mission for the Government, prolonged his stay in America, detained no doubt by the insurmountable difficulties in the accomplishment of his mission (the placing of a Haitian loan on the New York market). Since on the one hand the Adviser could not overcome these difficulties, and on the other hand his presence at Port-au-Prince was absolutely necessary for the preparation of the budget in conformity with the Constitution and the Haitian-American Convention, the Government deemed it essential to ask him to return to Port-au-Prince for that purpose. The Government in so doing secured the good offices of the American Legation, and Mr. McIlhenny returned from the United States about the first of June. The Legislature had already been in session almost two months.

About June 15 the Adviser began the study of the budget with the secretaries. The conferences lasted about twelve days, and in that time, after courteous discussions, after some cuts, modifications, and additions, plans for the following budgets were agreed upon:

1. Ways and Means
2. Foreign Relations
3. Finance and Commerce
4. Interior

On Monday, July 12, at 3.30, the hour agreed upon between the ministers and the Adviser, the ministers met to continue the study of the budget which they wanted to finish quickly.... Between 4 and 4:30 the Secretary of Finance received a letter from the Adviser which reads as follows:

"I find myself obliged to stop all study of the budget until certain affairs of considerable importance for the welfare of the country shall have been finally settled according to the recommendations made by me to the Haitian Government.

"Please accept, Mr. Secretary, the assurance of my highest consideration,

John McIlhenny"

Such an unanticipated and unjustifiable decision on the part of Mr. McIlhenny, an official attached to the Ministry of Finance, caused the whole Government profound surprise and warranted dissatisfaction....

On July 13 the Department of Finance replied to the Financial Adviser as follows:

"I beg to acknowledge your letter of July 12, in which you say, 'I find myself obliged, etc....'

"In taking note of this declaration, the importance and gravity of which certainly cannot escape you, I can only regret in the name of the Government:

"1. That you omitted to tell me with the precision which such an emergency demands what are the affairs of an importance so considerable for the welfare of the country and the settlement of which, according to the recommendations made by you, is of such great moment that you can subordinate to that settlement the continuation of the work on the budget?

"2. That you have taken such a serious step without considering that in so doing you have divested yourself of one of the essential functions which devolves upon you as Financial Adviser attached to the Department of Finance.

"The preparation of the budget of the state constitutes one of the principal obligations of those intrusted with it by law, because the very life of the nation depends upon its elaboration. The Legislature has been in session since April 5 last. By the Constitution the draft budgets and the general accounts should be submitted to the legislative body within eight days after the opening of the session, that is to say by April 13. The draft budgets were sent to your office on March 22.

"By reason of your absence from the country, the examination of these drafts was postponed, the acting Financial Adviser not being willing to shoulder the responsibility; we refer you to his letters of March 29 and of April 17 and 24. Finally ... you came back to Port-au-Prince, and after some two weeks, you began with the secretaries to study the draft budgets.

"The Government therefore experiences a very disagreeable surprise on reading your letter of July 12. It becomes my duty to inform you of that disagreeable surprise, to formulate the legal reservations in the case, and to inform you finally that you bear the sole responsibility for the failure to present the budget in due time.

"Fleury Fequiere, Secretary of Finance"

On July 19, Mr. Bailly-Blanchard, the American Minister, placed in the hands of the President of the Republic a memorandum emanating from Mr. McIlhenny, in which the latter formulates against the Government complaints sufficient, according to him, to explain and justify the discontinuance of the preparation of the budget, announced in his letter of July 12.

Memorandum of Mr. McIlhenny

I had instructions from the Department of State of the United States just before my departure for Haiti, in a passage of a letter of May 20, to declare to the Haitian Government that it was necessary to give its immediate and formal approval:

1. To a modification of the Bank Contract agreed upon by the Department of State and the National City Bank of New York.

2. To the transfer of the National Bank of the Republic of Haiti to a new bank registered under the laws of Haiti to be known as the National Bank of the Republic of Haiti.

3. To the execution of Article 15 of the Contract of Withdrawal, prohibiting the importation and exportation of non-Haitian money, except that which might be necessary for the needs of commerce in the opinion of the Financial Adviser.

4. To the immediate vote of a territorial law which has been submitted to the Department of State of the United States and which has its approval.

On my arrival in Haiti I visited the President with the American Minister and learned that the modifications of the bank contract and the transfer of the bank had been agreed to and the only reason why the measure had not been made official was because the National City Bank and the National Bank of Haiti had not yet presented to the Government their full powers. He declared that the Government did not agree to the publication of a decree executing the Contract of Withdrawal because it did not consider that the economic condition of the country justified it at that time. To which I replied that the Government of the United States expected the execution of Article 15 of the Contract of Withdrawal as a direct and solemn engagement of the Haitian Government, to which it was a party, and I had instructions to insist upon its being put into execution at once....

The Counter Memoir

To this memorandum the Executive Authority replied by a counter memoir which read in part as follows:

"The modifications proposed by the Department of State [of the United States] to the bank contract, studied by the Haitian Government, gave rise to counter propositions on the part of the latter, which the Department of State would not accept. The Haitian Government then accepted these modifications in nine articles in the form in which they had been concluded and signed at Washington, on Friday, February 6, 1920, by the Financial Adviser, the Haitian Minister, and the [Haitian] Secretary of Finance. But when Messrs. Scarpa and Williams, representing respectively and officially the National Bank of Haiti and the National City Bank of New York, came before the Secretary of Finance for his signature to the papers relative to the transfer of the National Bank of Haiti to the National City Bank of New York, the Secretary of Finance experienced a disagreeable surprise in finding out that to Article 9 of the document signed at Washington, February 6, 1920, and closed as stated above, there had been added an amendment bearing on the prohibition of non-Haitian money. The Secretary could only decline the responsibility of this added paragraph of which he had not the slightest knowledge and which consequently had not been submitted to the Government for its agreement. It is for this reason alone that the agreement is not signed up to this time. The Government does not even yet know who was the author of this addition to the document to which its consent had never been asked."

Today, gentlemen, you have come to the end of the regular session for this year. Four months have run by without the Government being able to present to you the budget for 1920-1921.... Such are the facts, in brief, that have marked our relations recently with Mr. McIlhenny....

Fleury Fequiere, Secretary of Finance

The Businessmen's Protest

THE protest printed below, against Article 15 of the Contract of Withdrawal, was sent to the Haitian Secretary of Finance on July 30.