1942: Haiti

Economic cooperation between the United States and Haiti was very close in the first year of the war, in which Haiti is a cobelligerent with the United States. A memorandum, dated April 6, outlined a number of arrangements agreed on by the two countries for strengthening the military, naval and economic position of that island. Active assistance will be given in developing and manning Haiti's defenses, including aid in building a marine railway at Port-au-Prince. Under the inter-American program of 'defense sanitation,' United States experts will be sent to Haiti to improve health and sanitation. Credits will be advanced by the Export-Import Bank for increasing sisal production and for strengthening the exchange relationship. The United States will purchase, through the Commodity Credit Corporation, the carry-over from last year's cotton crop, all the surplus of the 1942 crop, and, subject to an agreed price and within specified limitation of amount, the 1943 crop and all later cotton crops during the war. At the same time Haiti will undertake to restrict cotton production, and with help from the U. S. Department of Agriculture, will try to improve the quality and increase the staple length of its cotton.

Late in October a contract was signed with the United States for a large-scale development of crypto-stegia, a high quality and rapidly maturing source of rubber. Over 100,000 acres will be devoted to this purpose. The work will be carried out by SHADA (Haitian-American Agricultural Development Corporation), a cooperative venture launched in 1941, which is jointly owned by Haiti and the Export-Import Bank. The latter has allocated $5,000,000 for the project. SHADA, an increasingly important factor in Haiti's economic life, is also engaged in a 12,000-acre sisal development and in the development of the embroidery industry and native handicrafts.

Haitian foreign trade was flourishing in the first four months of the current fiscal year and had, in fact, increased 115 per cent over the corresponding period in 1940-41. Irregular shipping services, leading to a falling off in customs revenues, however, have reversed this trend and have created financial difficulties for the island republic, since import duties constitute 68 per cent of the total revenue; export duties, 11 per cent. The fiscal year ending Sept. 30 showed a budget deficit of 7,700,000 gourdes, which wiped out the Treasury surplus built up the previous year.

After thirteen years the joint boundary commission of the Dominican Republic and Haiti, on Dec. 16, reached an agreement on their frontier dispute.

1941: Haiti

President Stenio Vincent's second term ended on May 15, 1941. He was succeeded by Dr. Elie Lescot, Minister to Washington, a diplomat and administrator of long experience. The new president has pledged his administration to follow the Vincent policies. The foreign policy of the Republic has been strongly pro-United States. Cooperation in defense measures is indicated in the construction of an airfield near Port-au-Prince, to be used by commercial and military planes. Lend-lease aid for Haiti by the United States was agreed upon on Sept. 16; the agreement calls for the shipment of $1,100,000 worth of defense materials, repayable in Haitian export products. War was declared on the Axis Powers in December, following the formal entry of the United States into the Second World War.

The loss of European markets for coffee, cotton, and sugar had so adversely affected Haiti's finances early in the year that, in March, the Republic found it necessary to reduce its external debt service by one-third of the contractual rate. The rise in the price of Haitian coffee from six to nine cents a pound so quickly improved the nation's trade position, however, that full service on its outstanding dollar bonds was resumed on Oct. 1, and overdue interest was immediately repaid. An agreement with the United States, announced on May 5, abolished the offices of Fiscal and Deputy Fiscal Representative and provided for the control and operation of the budget and collection of customs and internal revenues by the National Bank of the Republic, thus ending North American control of Haitian finances. At the same time, provision was made for the protection of the holders of Haitian 1922 bonds.

The Republic's fiscal position was stronger at the end of July than it had been the year previous. Benefits from the Inter-American Coffee Agreement and a 16 per cent reduction in budgeted expenditures are the chief explanations. The sugar outlook has improved, too, since the British Government reentered the Caribbean sugar market. Reports that Great Britain has contracted for the last harvest of about 30,000 tons remain unconfirmed. Bananas made the best showing of all export products in 1941. On behalf of the Standard Fruit Company, a North American concern which markets Haiti's banana crop, Export-Import Bank credits amounting to $500,000 have been applied to the purchase of construction materials and equipment. A new long-term agreement with the United States was announced in May, providing for extensive rubber planting, and an additional $500,000 has been made available, under the J. G. White contract, for irrigation projects and improved transportation facilities to areas suitable for rubber growing and for other tropical products, such as spices, drug and fiber plants and oil crops. This is the only loan of the Export-Import Bank aimed at increased Latin American development of products complementary to United States economy. Total credits to Haiti, amounting to $6,330,000, have been made available to the end of 1946.

The third Inter-American Conference of the Carribbean met at Port-au-Prince in April. Representatives from twelve nations, and from Puerto Rico, attended. A Mexican proposal for an Inter-American Union of the Caribbean, opposed by the United States, was referred back to the several governments.

1940: Haiti

The coffee problem is the black Republic's chief concern, since the loss of the French market has cut off that commodity's principal outlet. Shipments to the United States in 1939-40 totalled 175,000 bags, but about one-third of the export crop for that year remained unsold. Haiti's quota in the United States market under the coffee convention (see EL SALVADOR) is 275,000 bags; outside the United States, shipments are limited to 327,000 bags. Adoption of this agreement would provide some relief but general economic prospects are not promising. Official figures for the fiscal year ended Sept. 30, 1940, show an import surplus of $2,541,200, compared with $973,100 for the previous year. A decline of 45 per cent in the value of coffee shipments, coffee being the island's main money crop, and an increase in imports due to the expenditures of North American contractors under the 1938 public works program financed by the Export-Import Bank account for the increase. The budget for 1939-40 balanced revenues and expenditures at 29,189,000 gourdes.

Partial suspension of amortization payments on dollar obligations through September 1940 has been permitted, under an agreement of July 8, 1938, with the United States, but interest service has been maintained in full. Haitian Government bonds held in the United States were estimated at the end of 1939 at $5,700,000 principal. In addition, North American direct investments in sugar, the island's second export crop, banana and sisal plantations total about $9,671,000.

Relations with the Dominican Republic have become more or less permanently stabilized.

1939: Haiti

The Republic of Haiti comprises the western part of the island of Hispaniola, formerly known as Haiti, which lies among the Greater Antilles group in the Caribbean Sea, southeast of Cuba. The Republic covers 10,204 sq. mi. of the Island's total 29,536 sq. mi., the rest of which is occupied by the Dominican Republic. The population of Haiti in 1937 was estimated at 2,650,000, all but about 3,000 being Negroes. The language is creole French, the religion predominantly Catholic, and the populace 85 per cent illiterate. The capital is Port-au-Prince.

The principal crop is coffee; 50,000,000 lbs. valued at 17,327,215 gourdes (the gourde equals 20 cents) were exported in 1938. Other important crops are: cocoa, cotton, sugar-cane, sisal, lignum vitae, fruits, and corn. Gold, silver, copper, iron and antimony exist in limited quantities, almost wholly undeveloped. Exports in 1938 (chiefly to the United States) were valued at 6,981,505 gourdes; imports, chiefly cotton tissues, wheat flour, machinery and manufactured articles, at 3,521,472 gourdes (lowest in 21 years).

The President, elected for a 5-year term, has wide powers and, under the present régime, no organized opposition. President Stenio Vincent will have served 10 years by the time his second term expires in 1941. The Senate (members appointed by the President and deputies) and the Chamber (elected) — in abeyance since 1917 — were revived in 1930 to sit till 1936.

On Feb. 17, 1939, the Government received $275,000 from the Dominican Government in a compromise settlement of amounts claimed for the killing in riots of some 12,000 Haitian nationals on Oct. 12, 1937, in Dominican territory. With this controversy disposed of, relations between the two became more cordial.

On Sept. 16, 1939, after the outbreak of war in Europe, Haiti proclaimed its neutrality. On Nov. 10, Haiti sent a minister, Abel Nicholas Leger, to represent the Government at the Vatican.

1938: Haiti

The war on totalitarian expansion in the Western Hemisphere, waged partly because of the signal success that expansion has had in commercial terms, was carried into the Caribbean area when, during the summer of 1938, the Export-Import Bank, a United States Government agency created to supply credits for foreign trade transactions, discounted at par a $5,000,000 note of the Haitian Government, issued to finance a public works program. This step, taken after the United States bankers had indicated a total lack of interest in further Haitian bonds, was considered essential to forestall a German deal which might have led to a substantial economic control over the Republic of Haiti. The J. G. White Engineering Company was induced to take the public works contract. This credit transaction, which is tantamount to a loan by the United States Treasury, was made on condition that only American materials would be used. It has political significance as a definite measure to meet the keen competition in Latin America of the trade-barter, totalitarian countries. Germany, Italy and Japan. Warren Lee Pierson, President of the Bank, recently toured Latin America presumably with an eye to further transactions. Two, in particular, are strongly rumored, one with Brazil, the other with Cuba.

On Feb. 28 the initial payment of indemnities, to total $750,000, was received from the Dominican Republic, as compensation for the killing of Haitians in the 'massacre' of October 1937. Formal ratification on Feb. 27 of an agreement signed at Washington Jan. 31, settled Haiti's grievances through the promise of payment of a lump sum of $250,000 at once and of the balance in five annual instalments. The Dominican Republic, in accepting the agreement, denied the responsibility of the state for the incident.

Persistence of low prices for Haiti's export products and adverse weather conditions, lowering the average yield, led to a technical default on the 1922 dollar loan, when a one-year extension was granted, dating from Oct. 1, of the partial moratorium provided in the Accord of Jan. 13, 1938. Full interest payment will be continued on all outstanding bonds, totalling about $8,000,000. The financial difficulties of the country are indicated in a reduction of national revenues below budget estimates, leading to a deficit of 5,333,000 gourdes.