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....