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Haiti. Bureau de représentant fiscal; Annual report of the fiscal representative for the fiscal year ….: publ., 18th, 19...
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Title: Haiti. Bureau de représentant fiscal; Annual report of the fiscal representative for the fiscal year ….: publ., 18th, 1933.34 to 24th, 1939-40; 7 vols.,
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Table of Contents
    Front Matter
        Front Matter
    Cover
        Page i
    Title Page
        Page ii
    Table of Contents
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    Schedules
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HAITI

ANNUAL REPORT
OF THE

FISCAL REPRESENTATIVE


FOR THE FISCAL YEAR
OCTOBER, 1935--SEPTEMBER, 1936










HAITI



ANNUAL REPORT

OF THE

FISCAL REPRESENTATIVE


FOR THE FISCAL YEAR

OCTOBER, 1935- SEPTEMBER, 1936



SUBMITTED TO THE SECRETARY OF STATE FOR FINANCE,
AND THE SECRETARY OF STATE FOR COMMERCE OF
THE REPUBLIC OF HAITI, AND THE SECRETARY
OF STATE OF THE UNITED STATES OF AMERICA.






S. DE LA RUE
Fiscal Representative.

REX A. PIXLEY
Deputy Fiscal Representative.

J. C. CRADDOCK
Inspector General of Internal Revenue.






Imprimerie de I'Etut
PORT-AU-PRINCE, HAITI


L_ ____ ^ __ ____________________ ___


/I;
'I







CONTENTS


Pages
Foreign Commerce....... ............................................................................... .. 4
Origin of Imports.................................. ........................................................ 5
Destination of Exports.................................................... ................................ 9
Balance of Trade................................... ........... ................... ...................... 11
Ports of Entry for Imports.................................................................................... 15
Ports of Shipment for Exports.......................... ............................................ 16
Shipping .............................................................................................................. 17
Tourist Trade..................................................... ................................... 21
Foreign Commerce by M onths................................................................. ...... 21
Commodities Imported................................. ................ .................................. 23
Commodities Exported.................................................................................... 28
Coffee ...................................................................................................... 29
Cotton ....................................................................................................... 39
Sugar .................................................................................................... 41
Sisal ............................................................. .............................. ... .......... 43
Bananas ........................................................... .................................... 44
Other Exports........................................................................................... 46
Commercial Conventions................................................................................ 48
Tariff M odifications......................................... ............................................. 52
Customs Administration.......................... ............................... ............................ 52
Internal Revenue Inspection Service........................................ ................... 54
Government Revenues...................................................................................... 55
Total Revenues........................................................................................ 55
Customs Receipts............................... ............................................ ............. 56
Internal Revenue Receipts............................................................... .... 59
M miscellaneous Receipts............................. .............................................. 62
Receipts from Communes...................................................................... 64
Government Expenditures.................................................. ........................... 64
Customs Service................................ .......................................... ......... 70
Internal Revenue Service.............................................................................. 72
Treasury Position................................................................................................ 74
Public Debt............................................................................................. ............ 77
Service of Payments....... ................................................................................ 83
Supplies ............................................................................................................... 84
The Budget and Financial Legislation.................................................... ....... 85
Currency .............................................................................................................. 88
Banking and Credit................................................................. .......... ... .......... 89
Claims ........................................ ................................................................... 90
Personnel ................................................ ........................................ ................ 91
-Conclusion ........................................................... ........................ ........ ........ 92
Tables ....... ................................................................................................ 97
Annex: Report of the Inspector General, Internal Revenue Inspection service.... 137
Expenditures ...................................... ......................................... .......... 139
Personnel ..................................................................................... .......... 140
Internal Revenue Receipts................ ........................................................... 140
Conclusion ........ ........................ ....... .................................................... 142
Tables .....................;................................................................. ......... 143
Appendix: Schedules ............................................................................................. 149







Iv STATISTICAL EXHIBITS
S TABLES
Pagies
1. Value of Imports and Exports, and excess of Imports or Exports, fiscal
years 1916-17 to 1935-36........................................................................ 99
2. Value of Imports showing countries of Origin in percentages, fiscal years
1916-17 to 1935 36....;........................................ .................................. 99
3. Value of Exports showing countries of Destination in percentages, fiscal
years 1916-17 to 1935-36........................................................................ 100
4. Value of Total Foreign Commerce by countries in percentages, fiscal years
1916-17 to 1935-36.............................................. ...................... 100
5. Value and Percentage of Value of Imports, Exports and Total Foreign
Commerce by countries-fiscal year 1935-36........................................ 101
6. Value of Imports by Ports of Entry-fiscal years 1916-17 to 1935-36.... 102
7. Value of Exports by Port of Shipment-fiscal years 1916-17 to 1935-36 102
8. Value and Percentage of Value of Imports, Exports and Total Foreign
Commerce by Ports fiscal year 1935-36........................................ 102
9. Net Tonnage of Steain and Motor Vessels in foreign commerce entered by
Registry andMbonthis -fiscal year 1935-36........................... .............. 103
10. Net Tonnage of Sailing Vessels in foreign commerce entered by Registry
and Months-fiscal year 1935-36........ ..................................... 104
11. Value of Imports by Registry of carrying vessels-fiscal year 1935-36.... 105
12. Value of Exports by Registry of carrying vessels-fiscal year 1935-36.... 106
13. Value of Imports by Mofiths and Ports of Entry-fiscal year 1935-36
compared with 1934-35.............................................................. 107
14. Value 6f Exiorts by Months and Ports of Shipment-fiscal year 1935-36
compared with 1934 35....; ............................... .................................. 108
15. Value of Imports by Commodities-fiscal years 1916-17 to 1935-36........ 109
16. Quantity of Imports by Commodities-fiscal years 1916-17 to 1935-36.... 110'
17. Value of Exports by Commodities-fiscal years 1916-17 to 1935-36........ 111
18. Quantity of Exports by Commodities-fiscal years 1916-17 to 1935-36... 111
19. Quantity and Value of Five Principal Exports by Ports -fiscal year
1935-36 compared with 1934-35 .............................................................. 112
20. Percentage of Value of Exports by Commodities-fiscal years 1916-17 to
1935-36 ...................................................... ........................................ 113
21. Quantity and Value of Exports by Commodity and Months fiscal year
1935-36 ...................................................................................................... 114
22. Fiscal Representative Funds-fiscal years 1916-17 to 1935-36............... 115
23. Expenses of Fiscal Representative by Objects of Expenditures-fiscal years
1916-17 to 1935-36........................................... ........................... 115
24. Classification of total Expenditures of. the Fiscal Representative-fiscal
year 1935-36....... ............................ ...................... ............................. 116
25. Classification of Administration and Operation Expenditures of the Fiscal
Representative-fiscal year 1935-36.................................. 116
26. Distribution of Expenditures from the Operating Fund of the Fiscal
Representative-fiscal year 1935-36...................................................... 117
27. Cost of Customs Operations by Ports and Cost of Administration, Repairs
and Maintenance, Acquisition of Property, and Fixed Charges-fiscal
years 1919-20 to 1935-36........................................................................ 118
28. Total Cost of Collecting Each Gourde of Customs Receipts-fiscal years
1919-20 to 1935-36................................................................................ 119
29. Operating Allowance of Internal Revenue Service-fiscal years 1923-24
1935-36 ......................................................... 119
30. Revenue of Haiti by Sources-fiscal years 1889-90 to 1935-36................ 120
31. Relation between Import and Export Values and Customs Receipts--fiscal
years 1916-17 to 1935-36........................................................................ 121







STATISTICAL EXHIBITSS


Page
32. Customs Receipts by Months-fiscal years 1916-17 to 1935-36........... 122
33. Customs Receipts by Ports-fiscal years 1916-17 to 1935-36.................. 123
34. Customs Receipts by Sources and Ports-fiscal year 1935-36.................. 123
35. Customs Receipts by Sources and by Months-fiscal year 1935-36............ 123
36. Distribution of Customs Receipts-fiscal years 1916-17 to 1935-36........ 124
37. Miscellaneous Receipts by Sources and by Months-fiscal year 1935-36.... 124
38. Total Receipts of Haitian Government by Sources, Months, and Ports -
fiscal year 1935-36.......................................... ................................ 125
39. Ordinary, Supplementary and Extraordinary Appropriations from Revenue
-fiscal years 1931-32 to 1935-36..................................................... 126
40. Revenues and Expenditures-fiscal years 1932-33 to 1935-36................ 127
41. Functional Classification of Expenditures-fiscal year 1935-36................ 128
42. Classification of Total Expenditures by Departments and Services-fiscal
year 1935-36...................................................................................... 129
43. Classification of Administration and Operation Expenditures by Departments
and Services-fiscal year 1935-36.................................................. 130
44. Reimbursements to Appropriations-fiscal years 1931-32 to 1935-36........ 131
45. Receipts and Expenditures-fiscal year 1935-36......................................132
46. Revenues and Expenditures and Excess of Revenues or Expenditures-
fiscal years 1916-17 to 1935-36.................. .............. ................... 133
47. Treasury Assets and Liabilities.................................................................... 133
48. Public Debt............ .................................................... ..... ....... ....... 134
49. Expenditures from Revenue for the Public Debt and Relation of such Ex-
penditures to Revenue Receipts-fiscal years 1933-34 to 1935-36........ 134
50. Profit and Loss Statement-Bureau of Supplies-fiscal years 1934-35
and 1935-36....................................................... ................................. .135
51. Balance Sheet-Bureau of Supplies................ ........... ... 135
52. Notes of the Banque Nationale in Circulation by Months--fiscal years
1919-20 to 1935-36........................ ...................................... 136
53. Loans and Deposits of Banks in Haiti by Months-fiscal year 1935-36.... 136
CHARTS
1. Value of Total Imports and Total Exports, by Months, Fiscal Years 1932-33
to 1935-36.......................................... ................. .... ............ 22
2. Quantities of Leading Commodities Exported and Imported, fiscal years
1916-17 to 1935-36....................;.. ............... ....... .......... ......... 26
3. Coffee Prices, fiscal years 1934-35 and 1935-36.................................. 37
4. Total Revenue Receipts of Haiti and Expenditures from Revenues fiscal'
years 1916-17 to 1935-36....................................... ...... ................ 55
ANNEX: INTERNAL REVENUE INSPECTION SERVICE
TABLES
1. Internal Revenue Receipts by Sources, fiscal years 1919-20 to 1935-36........ 145
2. Internal Revenue Receipts by Collection Districts, fiscal years 1919-20,
to 1935-36.......................................................................................... 146
3. Internal Revenue Receipts by Sources and Districts, fiscal year 1935-36.... 147
4. Internal Revenue Receipts by Sources and Months, fiscal year 1935-36.... 148
APPENDIX: SCHEDULES
1. Quantity and Value of Imports into Haiti by Countries of Origin, October
1935- September 1936............................. ...... ................................ 151
2. Quantity and Value of Exports from Haiti by Countries of Destination,
October 1935- Septembre 1936.................................. ................... 179
3. Customs Receipts by Sources, by Ports and by Months, fiscal year 1935-36 186





















HAITI
ANNUAL REPORT OF THE FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER, 1935 SEPTEMBER, 1936.









HAITI
ANNUAL REPORT OF THE FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER, 1935 SEPTEMBER, 1936


OFFICE OF THE FISCAL REPRESENTATIVE.
Port-au-Prince, Haiti, December 29, 1936.
THE SECRETARY OF STATE OF THE UNITED STATES OF AMERICA,
THE SECRETARY OF STATE FOR FINANCE OF THE REPUBLIC OF HAITI,
THE SECRETARY OF STATE FOR COMMERCE OF THE REPUBLIC OF
HAITI.

Sirs:
I have the honor to transmit herewith the twentieth annual report on the
commerce and finances of the Republic of Haiti. The report covers the fiscal
year ending September 30, 1936, supplementing and enlarging upon the
monthly reports required by Article VIII of the Agreement of August 7,
1933, between the United States of America and the Republic of Haiti.
A good coffee crop during the past season was the principal factor in
producing a marked increase in foreign commerce and in government reve-
nues during the fiscal year 1935-36.
Compared with figures for the previous fiscal period, total foreign com-
mence values registered an increase of 10.89 per cent, while government
revenues showed a gain of Gdes. 4,506,723.37, or 14.97 per cent.
This encouraging recovery in commerce and revenues gave ample proof
that the phenomenally small coffee crop of the previous season, accompanied
by a sharp recession in foreign trade and revenue receipts, was a temporary
feature for which adverse climatic conditions alone were responsible.
Although compared with the previous year the import trade in 1935-36
declined in value by 7.87 per cent, exports increased in value by no less
than 32.02 per cent. The coffee crop was exceeded in size by only two crops
during the past fifteen years. Despite boll weevil damage, the 1935-36
cotton crop of 5,724,155 kilos was not far below the record total of 6,308,335
kilos recorded four years ago. Sugar production was greater than that
recorded in any year since the present modern industry was established.
Sisal and banana exports, which are respectively fourth and fifth in im-
portance among Haiti's exports, in value reached record levels. Cacao,
logwood, and various minor exports exceeded the 1934-35 figures both in
value and in quantity.





HAITI: REPORT OF FISCAL REPRESENTATIVE


The balance of trade of the Republic revealed an excess of exports over
imports amounting in value to Gdes. 9,317,968, a figure surpassed in only
two years of the past twenty.
Total government revenues, amounting to Gdes. 34,598,364.33 in 1935-36,
exceeded the original budgetary estimate by Gdes. 348,364.33. The need
during the year for various supplementary and extraordinary appropri-
ations, however, carried total disbursements from revenues to a total of
Gdes. 36,631,574.03, leaving an excess of expenditures over receipts
amounting to Gdes. 2,033,209.70 which was covered entirely by the
resources of the treasury.
The saving in debt service charges, through redemption of the Series B
loan, permitted promulgation of a safely balanced budget for the fiscal year
1936-37 which authorizes ordinary expenditures in that year totalling Gdes.
33,237,546.87. The latter figure is less than the total of the 1935-36 budget
by Gdes. 1,012,234.20. At the same time it provides funds for all ordinary
government expenditures without diminishing the scope of governmental
activities. In fact, some increase in government activities, particularly in
agricultural extension, have been provided for in the new budget.
Funds were appropriated to bring relief to the regions devastated by the
floods of October, 1935, and to combat the anthrax epidemic which broke
out later in the year. The work of the Frontier Commission and com-
mencement of work on the projected international road along the Haitian-
Dominican boundary required the appropriation of Gdes. 350,700. Various
urgent public works projects required the expenditure of sums not provided
in the ordinary budget. Public celebrations and official receptions added
Gdes. 370,000 to the total. The expense of holding legislative elections
amounted to Gdes. 150,000. Disbursements also were made from treasury
resources for various civic improvements, for the development of coffee and
coconut cultivation, and to supplement the regular budgetary allocation of
the National Public Health Service.
In sum, expenditures of this nature exceeded two million gourdes, result-
ing directly in the excess of expenditures over receipts recorded above, and
reducing the unobligated treasury surplus to Gdes. 1,915,860.34 at the year
end. The latter figure is considered adequate to assure the orderly fulfill-
ment of current government obligations, provided, however, that the budget
is maintained carefully in balance and additional appropriations are not
created unless covered by new revenues.
Service of the public debt continued regularly throughout the fiscal year,
and on September 30, 1936, the gross debt of the Republic had been reduced
to Gdes. 49,092,715.80. Only Gdes. 537,109.90 in bonds of the Series B
issue remained outstanding at the latter date. Shortly after the close of the
fiscal year the application of money in the sinking fund covering the Series
B issue resulted in the drawing by lot of all of the few bonds then out-
standing and their call by the fiscal agent of the loan. No further payment





HAITI: REPORT OF FISCAL REPRESENTATIVE


consequently will have to be made to service the Series B issue, resulting
in a future saving to the treasury of a figure in excess of Gdes. 1,800,000
annually.
The public debt of the Republic has been reduced to a smaller amount
than any figure recorded during a period extending back at least sixty years.
In March, 1936, France denounced its commercial convention with Haiti,
resulting in the subsequent closure of the important French market to
Haitian coffee destined for consumption in France. Fortunately, most of
the 1935-36 crop had been sold prior to the closure of the French market,
ahd little difficulty was experienced in disposing of the remainder of the
crop in other markets.
The loss of a market which heretofore had absorbed between 60 and 70
per cent of Haiti's principal export crop came as a blow to exporters
who had failed to recognize the imminence of such action, or had failed to
heed the warning clearly given in the Annual Report of this office for
1934-35. The closure of the French market for several weeks during 1935,
and the obviously temporary nature of the agreement arrived at in July,
1935, between the two governments, should have served as ample confir-
mation of the warning to exporters that they must find new markets, and
must improve the preparation of their coffee. Many exporters, however,
remained indifferent to the precariousness of their situation until the action
taken by France last March gave exporters no alternative other than to
improve the preparation of their product to the point where it could compete
with quality coffees grown in other producing countries.
In the last few months remarkable progress has been made in improving
coffee preparation and in finding buyers of the better grades of Haitian
coffee in the United States and in European countries. The closure of the
French market has had the salutary effect of forcing the local industry
to begin to discard antequated methods of preparation and offer on foreign
markets a product revealing the intrinsic merit of Haitian coffee.
Through government aid, valuable business contacts have been made with
coffee buyers in New York. Experts in coffee marketing and in coffee
preparation have visited Haiti in recent months. A coffee testing station
has been established in Port-au-Prince where expert opinion can be obtain-
ed as to the cupping qualities of coffee destined for export. Government
funds have been expended to aid producers by furnishing materials for the
construction of concrete drying platforms. Proper drying and fermentation
of coffee is being encouraged in every way. The efforts being made in this
direction already are producing results.
Undoubtedly, the closure of the French market has brought to the local
coffee trade a far better understanding of the cultivation, curing and
marketing of coffee for export. Effective measures are being taken to assure
a preferred place for Haitian coffee in the consuming markets, and there is
every reason to believe that the 1936-37 crop can be marketed to good
advantage.





HAITI: REPORT OF FISCAL REPRESENTATIVE


To summarize, the period under report may be characterized as having
been an average year with respect to commerce and revenues. Sluggishness
in the import trade was off-set by increased exports. Revenues attained the
expected level. It was only in the category of government expenditures
that the 1935-36 figures showed a notable variation from the expected total;
and in this respect the unfavorable showing largely was caused by dis-
bursements necessitated by unforeseen circumstances. A safely balanced
budget for 1936-37 was passed by the legislature and promulgated. Re-
tirement of the public debt proceeded rapidly. The internal funded debt all
but disappeared, freeing the budget from the annual charges needed for its
service. The problem of improving the preparation of coffee, and of finding
new markets for that product, at the year-end was well on the way to
solution.

Foreign Commerce
The foreign commerce of the Republic in 1935-36 reached a total value
of Gdes. 85,159,220, exceeding the 1934-35 figure by Gdes. 8,368,394, or by
10.89 per cent. Exports increased by Gdes. 11,609,389 to Gdes. 47,238,594,
or by 32.02 per cent, while imports declined in value by Gdes. 3,240,995 to
Gdes. 37,920,626, or by 7.87 per cent.
The comparison is made with a year when imports may be considered
as not far from average, but when exports were far below normal, due to-
a short coffee crop. The large crop of the past fiscal year produced a sharp
gain in total foreign trade despite the falling off in imports and lower, coffee
prices.
The low price of coffee during the past season was one of the most
disquieting features of the year, for the average price obtained for the last
crop was nearly nineteen per cent under the price level of the 1934-35
harvest. If coffee prices had been sustained at the 1934-35 figure, the value
of the last crop would have been about Gdes. 6,700,000 greater than the
value actually obtained, and of course the value of total exports would have
increased by the same amount.
Notwithstanding the low unit price of coffee, the value of the export
trade in 1935-36 (Gdes. 47,238,594) was greater than the like figures re-
corded in any of the past six years with the exception of 1933-34 when total
exports were valued at Gdes. 51,546,191. Contributing to the increase in
export values was the growing importance of export commodities other
than coffee, particularly sugar, sisal and bananas.
The import trade in 1935-36 was adversely affected by a number of
factors, among which may be mentioned: (1) the unwillingness of
merchants to make their usual purchases in the face of the uncertainties
surrounding the marketing of coffee throughout the latter half of the year;
and (2) the withdrawal of considerable amounts of capital from Haiti
following the passage of a law excluding. foreigners from engaging in




HAITI:, REPORT OF FISCAL REPRESENTATIVE


certain lines of retail trade. Both of these factors should result in only a
brief slowing up in the import trade; in fact, imports in the latter part of
the year showed more-than-seasonal recovery.
The retail trade law brought about the liquidation of stocks of imported
merchandise in the hands of a few large retailers, and the diversion of retail
selling in a number of important lines, particularly in cotton piece goods,
to smaller establishments unable because of lack of capital to carry large
inventories. Hand-to-mouth buying by importers was therefore the rule
during most of the past year.
The value of total imports in 1935-36 was less than in any similar period
during the past twenty years, with the exception of the mid-depression year
of 1931-32.
The building up of a large surplus of exports over imports during 1935-
36, amounting to Gdes. 9,317,968, and with it an accumulation of consumer
buying power, should have an ameliorative effect on the import trade in
the coming months.

Origin of Imports
SImports during the fiscal year 1935-36 came principally from the United
States, the United Kingdom, Germany, Japan, France, Canada, the Nether-
lands and Belgium in the order of importance given. These eight countries
alone supplied Haiti with 93.57 per cent of the total value of merchandise
imported.
The most striking change in the relative importance of these countries
in Haiti's import trade was the drop of Japan from second place in 1934-35
to fourth place in 1935-36. Canada, on the other hand, increased its sales
to Haiti and became sixth in importance from eighth place the previous
year.
Japan thus far has failed to enter upon a commercial agreement with
Haiti which would permit its products to be imported under the minimum
Haitian tariff. As a consequence, all imports of Japanese merchandise are
dutiable under the maximum tariff established by the law of April 15, 1935.
The maximum tariff consists of the existing list of import duties increased
by 100 per cent.
Notwithstanding the increased duties applicable to goods of Japanese
origin, Japan in 1935-36 was able to sell to Haiti merchandise valued at
Gdes. 2,297,701. The-latter figure compares with Gdes. 7,270,260 in 1934-35
and Gdes. 8,829,263 in 1933-34. As usual, imports from Japan consisted
almost exclusively of cotton goods, with dyed or printed piece goods pre-
dominating.
SJapan's share of the total import trade declined from 17.66 per cent in
1934-35 to 6.06 per cent in 1935-36. The American share of the import
trade, on the other hand, rose from 48.39 per cent in 1934-35 to 56.47 per




HAITI: REPORT OF FISCAL REPRESENTATIVE


cent in 1935-36, and the share of the United Kingdom from 9.16 per cent
to 12.63 per cent. Canada, Genimany, Belgium and the Netherlands likewise
improved their position in Haiti's import commerce.
During the past twenty years imports from ithe United States averaged
75.90 per cent of total imports. During the last ten years, however, there
has been a steady decline in the share of the import trade consisting of
American goods, and in 1934-35 the American share had dropped to only
48.39 per cent. This situation changed during the year under review, since
the American share of the import trade amounted to 56.47 per cent.
Excepting increased imports of American butter, canned milk and fresh
beef, amounting in all to an increase of Gdes. 54,000, the new commercial
agreement with the United States which became effective in June, 1935,
does not appear to have been an important factor in the increase in
purchases from that country. On the contrary, the rise amounting to Gdes.
1,501,844 in the value of American goods purchased by Haiti was due
almost entirely to greatly increased purchases of American cotton goods
-an increase which was recorded in spite of the depressing effect of the
retail trade law. Purchases of American cotton prints, for example, nearly
tripled in value. Cotton clothing, duck, knit goods and yarns also were im-
ported in greater quantities from the United States. Other imports from the
United States, the value of which increased in 1935-36, included automobile
trucks, earthenware, jute bags, flour, hides, fuel oil, paper, perfumes and
cosmetics, rubber tires, silk good's and lumber. None of these classes of
commodities were favored by tariff reductions under the Haitian-American
commercial agreement. It is evident, therefore, that the agreement has not
yet been directly instrumental to any great extent in bringing about in-
creased purchases of American goods.
The United Kingdom increased its sales to Haiti in value from Gdes.
3,770,925 in 1934-35 to Gdes. 4,787,708 in 1935-36, or by Gdes. 1,016,783.
The share of total imports represented by merchandise bought from the
United Kingdom rose from 9.16 per cent in 1934-35 to 12.63 per cent in
1935-36. As in the case of the United States, the gain was due largely to
increased sales to Haiti of cotton goods. Under the more important
categories of cotton goods, including particularly cotton prints, the value
of imports of British origin increased from Gdes. 1,360,393 in 1934-35 to
Gdes. 2,140,967 in 1935-36. Great Britain also has been the principal supplier
of common soap to Haiti. Imports of soap from the United Kingdom
increased in value from Gdes. 829,897 in 1934-35 to Gdes. 1,320,955 in 1935-
36. Smaller gains were recorded in the case of imports from the United
Kingdom of agricultural implements, jute bags, and rubber tires. Imports
declined in the case of purchases of patent medicines, various chemical and
pharmaceutical products, cotton yarns and manufactures, pickled meats,
butter, cast iron and enamelled kitchen utensils, paints, and woolen goods
of British manufacture.





HAITI:' REPORT OF FISCAL REPRESENTATIVE


The rising importance of British goods among Haitian imports is even
more apparent when figures covering imports from the British Empire are
examined. These totalled Gdes. 6,017,507 in 1935-36 as against Gdes.
4,801,079 in 1934-35, indicating a gain of 25.33 per cent. The British Empire
share of the total Haitian import trade increased from 11.65 per cent in
1934-35 to 15.87 per cent in 1935-36. During the latter year, sales by Haiti
to the British Empire amounted to 15.96 per cent of the total export trade.
Thus, commerce between Haiti and the British Empire was practically
equalized.
Canada in 1935-36 became an important factor in increasing British
Empire trade with Haiti. Purchases from Canada increased by Gdes.
84,607 to a total of Gdes. 890,681, or by 10.49 per cent. Imports of fish
direct from Canada rose in value from Gdes. 346,259 in 1934-35 to Gdes..
409,883 in 1935-36. Gains were registered also in imports of Canadian tires,
potatoes, butter, canned meat, paint, lumber and unclassified imports. Flour
imported directly from Canada, however, declined in value from Gdes.
377,155 in 1934-35 to Gdes. 333.762 in 1935-36. Much of the Canadian
wheat consumed in Haiti is milled in the United States and appears there-
fore in the customs statistics as of American origin.
Germany also improved its share of the Haitian import trade in 1935-36.
Purchases from Germany comprised 6.53 per cent of total imports in the
latter period, compared with 6.04 per cent in the preceding year. In value,
however, imports from Germany remained about the same (Gdes. 2,483,781
in 1934-35 and Gdes. 2,474,380 in 1935-36). Substantial gains were made by
Germany in sales of cement, glassware, cutlery, and malt liquors. Gains
were also registered in sales of cotton yarns and manufactures, twine and
rope, hats, rice, cheese, agricultural implements, paint, paper, and sewing
machines. Declining purchases of German goods affected principally
enameled kitchen ware, tinware, earthenware, soap, cosmetics, shoes, patent
Medicines, and furniture.
Imports of German beer increased sharply, due to the closing of the only,
domestic brewery during the year. Imports of German kitchen utensils and
tinware declined along with the general drop in imports under these cate-
gories.
The import trade with France declined rapidly following the denunciation
by that country of the Franco-Haitian commercial convention, inasmuch
as French merchandise became dutiable under the maximum tariff rates
upon entry into Haiti. The result was that French merchandise of many
kinds could not be sold in competition with similar merchandise from other
countries. In value, imports from France in the latter months of the fiscal
year were about one fourth of the average values recorded during the same





HAITI: REPORT OF. FISCAL REPRESENTATIVE


period of the previous year while the convention was still in effect. The
decline is shown in the table below:
Value of Imports Percentage of
from France total Imports
Gourdes Per cent
October, 1935............................... 186,945 6.17
November, 1935.................................. 295,848 8.48
December, 1935............................... 449,000 13.81
January, 1936.................................. 46,901 1.49
February, 1936.................................. 138,507 4.82
March 1936.................................. 167,904 4.70
April, 1936.................................. 171,812 5.42
May, 1936............................... 275,347 9.35
June, 1936.................................. 101,737 3.20
July 1936.................................. 61,011 1.91
August, 1936.................................. 47,914 1.67
September, 1936.................................. 53,239 1.66

French merchandise comprised 5.26 per cent of total imports in 1935-36,
compared with 5.49 per cent in 1934-35, and 5.03 per cent in 1933-34. In
value, imports from France declined from Gdes. 2,259,257 in 1934-35 to
Gdes. 1,996,165 in 1935-36. The latter figure, of course, includes imports
favored during the first half of the fiscal year 1935-36 by. the special com-
mercial privileges then accorded to France. Except in the case of jute bags,
paper, and relatively small increases in imports from France of distilled
liquors, silk goods, cotton prints, articles manufactured of copper and
brass, miscellaneous electrical apparatus, and jewelry, all categories of
merchandise imported from France registered declines in 1935-36.
Jute bags of French origin were favored by the agreement with France in
effect until the denunciation of the Franco-Haitian commercial convention,
and imports consequently increased from a total value of only Gdes.
10,800 in 1934-35 to Gdes. 269,741 in 1935-36. Purchases of stationery by
government services in compliance with the same agreement was instru-
mental in increasing imports of paper from France from Gdes. 46,571 in
1934-35 to Gdes. 75,361 in 1935-36.
Declines in purchases from France were recorded principally in the case
of: wine (decline from Gdes. 410,084 in 1934-35 to Gdes. 239,965 in 1935-
36); perfumes and cosmetics (decline from Gdes. 268,381 in 1934-35 to
Gdes. 234,761 in 1935-36); patent medicines and pharmaceuticals (decline
from Gdes. 378,486 in 1934-35 to Gdes. 306,177 in 1935-36); and rubber
tires (decline from Gdes. 111,225 in 1934-35 to Gdes. 40,896 in 1935-36).
Other categories in which decreased imports were recorded included books
and printed matter, cotton goods, earthenware, miscellaneous liquors, table
oil, glassware, hats, kitchen utensils, and cutlery.
Belgium's share of the total import trade increased from 2.02 per cent
in 1934-35 to 2.13 per cent in 1935-36, but in value of imports a small
decline was registered. Imports from Belgium aggregated Gdes. 807,678
in value during 1935-36 compared with Gdes. 833,099 in 1934-35. Purchases
by Haiti of Belgium cement, structural steel and soap declined. Imports






HAITI: REPORT OF FISCAL REPRESENTATIVE


increased in the case of a long list of articles including particularly steel
sheets, railway track.material, matches, paper, miscellaneous rubber goods,
kitchen utensils and cotton goods. The signing of a provisional trade
agreement with Belgium on July 9, 1936, came too late to affect appreciably
the record of total imports from Belgium during the fiscal year. September
imports of Belgian merchandise, however, were more than double the
figure for September of the previous year, indicating that the new
agreement has been effective in expanding Haiti's import commerce with
that country.
The import trade with the Netherlands declined by 6.2 per cent to a
total of Gdes. 813,352 in 1935-36. Imports of dairy products, rice, and
agricultural implements increased, while declines were recorded in all
other categories, with the more pronounced declines affecting purchases of .
soap, enamelled kitchenware, steel sheets and jute bags.
The general drop in gasoline and kerosene imports during 1935-36
affected the import trade with Curaqao, which declined in value to Gdes.
599,635 in the latter year from Gdes. 805,201 in 1934-35. Imports from
Curacao comprised 1.58 iper cent of total imports in 1935-36.
Imports from other countries supplying Haiti with merchandise in 1935-
36 in each case amounted to less than one per cent of total imports. The
most striking change was recorded in the case of Italy, whose sales to Haiti
dropped to Gdes. 305,189 in 1935-36 from Gdes. 491,738 in 1934-35, or by
38 per cent.
Destination of Exports
France, the United Kingdom, the United States and Belgium remained
in 1935-36 the principal markets for Haitian exports. Together, these four
countries absorbed 86.59 per cent of total shipments abroad. Individually,
they purchased 47.20 per cent, 15.10 per cent, 14.24 per cent, and 10.05 per
cent of total exports. Denmark, Germany and Japan were the only other
countries which individually bought more than one per cent of total exports.
Most of the coffee crop, as usual, was shipped to France, and since
exports of that commodity in 1935-36 were considerably larger than the
previous year, the share of total exports taken b1y France showed a sharp
gain. France absorbed 47.20 per cent of total exports in 1935-36, as against
39.55 per cent in 1934-35.
The table below showvs the value of commodities shipped to France in
1935-36 and in 1934-35:
1935-36 1934-35
Gourdes Gourdes
Coffee ................................... 19,560,539 12,361,086
Cotton .................................... 2,529,149 1,489,581
Logwood .................................... 143,011 182,247
Honey ................................... 30,525 24,460
All others.................................. 32,978 32,848
Total.................................. 22,296,202 14,090,222






HAITI: REPORT OF FISCAL REPRESENTATIVE


In value, exports to France in 1935-36 increased by Gdes. 8,205,980, or
by 58.24 per cent, when comparison is made with the previous year.
The gain was due not only to the sharp rise in shipments of coffee to
France, but also to the fact that cotton purchases by France nearly doubled
in value. France purchased 35 per cent of the 1935-36 cotton crop, and 28
per cent of all logwood exported.
The United Kingdom in 1935-36 remained the principal foreign outlet
for Haitian cotton and raw sugar. Exports, by commodities, to the United
Kingdom in each of the last two fiscal years were as follows:
1935-36 1934-35
Gourdes Gourdes
Raw cotton...................................... 3,681,655 1,260,080
Raw sugar.................................... 3,038,815 3,230,552
Cottonseed cake.............................. 381,795 414,043
All others............................. ......... 28,494 52,235
Total...................................... 7,130,759 7,956,910

The smaller cotton crop of the past season, together with greater
purchases of this commodity by France, combined to reduce exports to
England. Raw sugar imports by England declined because of the sub-
stantially larger quantities disposed of advantageously in the American
market. Nevertheless, England still remained the market for most of the
raw sugar produced in Haiti and for slightly more than half of the year's
cotton crop.
The American market in 1935-36 continued to be by far the largest outlet
for the export products, other than coffee, cotton and sugar, which make
up the balance of the export trade. In addition, that country during the
past year for the first time became an important factor in the sugar and
coffee trade. Whereas these two commodities had ranked eight and ninth
in importance in 1934-35, during the past fiscal year they were respectively
third and fourth in importance among products exported to the United
States. The gain in sales of sugar and coffee to American importers was
largely responsible for an increase of Gdes. 2,427,770, or 56.45 per cent,
in the value of Haitian export comniodities sold in the United States
during 1935-36. Shipments, by commodities, to the United States are given
below:
1935-36 1934-35
Gourdes Gourdes
Sisal ........................................ 2,670,115 1,859,520
Bananas .................................... 771,669 763,085
Sugar ......................................... 630,960 112,296
Coffee .......................... ...... 619,251 61,580
M olasses ....................................... 570,151 321,610
Cacao ................................ 565,015 384,143
Goatskins ........................................ 413,441 425,346
Logwood .................................... 276,756 139,204
Rum ........................................ 121,677 174,438
All others....................................... 88,414 58,457
Total............... ............. ....... 6,727,449 4,299,679






HAITI: REPORT OF FISCAL REPRESENTATIVE


The United States purchased practically all of the bananas, molasses,
cacao, goatskins and rum exported from Haiti in 1935-36. In addition,
American buyers took nearly 90 per cent of the sisal and 58 per cent of the
logwood exported.
Belgium is an important outlet for Haitian coffee, and it also purchases
small quantities of logwood. Exports to Belgium were valued at Gdes.
4,747,353 in 1935-36, compared with Gdes. 3,115,393 in 1934-35, registering
an increase during the past fiscal year of 52.33 per cent.
Denmark also supplies an outlet for Haitian coffee. Total exports to that
country amounted to Gdes. 2,835,597 in 1935-36, compared with Gdes.
2,243,838 in 1934-35. Coffee was the only export commodity sold to Den-
mark in 1935-36 with the exception of shipments of cottonseed cake valued
at Gdes. 69,998.
Germany purchased the following Haitian commodities in 1935-36:
Gourdes
Coffee ........................................................................ 627,442
Cotton ........................................................................ 323,328
Honey ........................................................................ 68,052
All others.................................................................... 48,727
Total.................. ..................................................... 1,037,436
Exports to Germany declined in value by Gdes. 285,544 from the 1934-35
total due to considerably smaller purchases of cotton, offset to some extent
by larger purchases of Haitian coffee.
Japan in 1935-36 bought Haitian commodities valued at Gdes. 709,522,
consisting of cotton (Gdes. 637,087) and coffee (Gdes. 72,435). Exports to
Japan declined from the figure for the previous year, when total shipments
were valued at Gdes. 867,870.
Exports to Canada, consisting almost entirely of sisal, increased to Gdes.
351,599 in 1935-36 from Gdes. 170,005 in 1934-35. The Netherlands increased
its purchases to Gdes. 354,154 in 1935-36 from Gdes. 84,519 in 1934-35.
As in the case of imports, the export trade with Italy declined to a
marked extent. Exports to that country in 1935-36 were valued at only
Gdes. 313,619, compared with Gdes. 831,690 the previous year. Spain also
became of almost negligible importance in Haiti's foreign trade. The
foreign commerce record, both with regard to exports as well as imports,
gives visible evidence of the far-reaching effects of the political events in
which the last two countries lately have been involved.

Balance of Trade
Exports of merchandise in 1935-36 exceeded imports by Gdes. 9,317,968.
Not since 1927-28 has the surplus of exports over imports in any one year
been greater than the 1935-36 figure. Similarly, only twice in a period
extending back for two decades have there been fiscal years in which
exports of merchandise exceeded imports by a greater figure than that
recorded during the year under report.






HAITI: REPORT OF FISCAL REPRESENTATIVE


However, too much emphasis should not be placed on the results of a
single year. Foreign commerce in 1935-36 was heavily influenced in favor
of exports by a lull in importing brought about not so much by a lack of
purchasing power as by factors of a purely transitory nature which
characterized the year. These included especially an over-stocking of
imported merchandise in the previous year, pronounced changes in retail
trade brought about by legislative ruling and finally the business uncer-
tainties which prevailed following the break in trade relations with France.
Merchants were reluctant to buy the usual quantities of imported merchan-
dise in the face of prospects that much of the coffee crop of the 1935-36
season, as well as coffee from the new crop, might be delayed in reaching
market. In the same way, foreign commerce during the previous fiscal
period had been weighted heavily on the side of imports by the fact that
-imports had been scaled to an average coffee crop, whereas as the year
progressed it was found that in volume the crop had descended to a record
low level.
It follows, then, that trade results of a single year imperfectly record the
trends which indicate whether or not the Republic is improving its position
with respect to exchanges of merchandise. A far better indication is given
if the scope of our examination is extended over a period of years. In an
endeavor to permit a proper examination of foreign commerce trends, there
is given below a tabulation of total exports and imports by five-year periods
extending back to 1916:
Surplus or
Imports Exports Deficit
Gdes. (000,000's) Gdes. (000,000's) Gdes. '(000,000's)
1916-1921............................... 376 348 28
1921-1926............................ 402 396 6
1926-1931............................ 378 389 +11
1931-1936............................ 200 217 +17
The table demonstrates convincingly that during the first decade Haiti
gradually overcame the decidedly unsound trade position which had existed
in the initial years of the period studied; that following the flotation of the
1922 loan and the settlement of prior debts, an accumulation of export
values over imports began which rapidly increased. The last five years
present the best record of the entire period even though world-wide depres-
sion in those years had pushed down the value of commodities entering
into the foreign commerce of the Republic, and especially had depressed the
value of the staple commodities included in the export, or credit, side of
the account.
During the ten fiscal years ending in 1935-36 exports in value exceeded
imports in round figures by Gdes. 28,000,000.
During the same period, service of the external public debt cost Gdes.
38,471,000 for interest, and Gdes. 34,191,000 for amortization, or a total of
Gdes. 72,662,000.
The question therefore arises: How has it been possible for Haiti to
meet its debt obligations of Gdes. 72,662,000 when its "favorable" balance






HAITI: REPORT OF FISCAL REPRESENTATIVE


of trade amounted only to Gdes. 28,000,000 leaving a net amount of about
Gdes. 45,000,000 to be accounted for?
The explanation lies in the fact that: (1) items in the balance of inter-
national payments other than merchandise exchanges ("invisible" items),
and (2) application of the net inward flow of capital during and previous
to the period under discussion, built up the balances which enabled Haiti
easily to service its public debt.
The figures for interest payments given above are gross amounts, and
include amounts which were repatriated due to the fact that the Republic
invested heavily during the period in its own bonds, interest on which
reverted to the treasury. This income amounted approximately to Gdes.
3,000,000 during the period.
United States government expenditures in Haiti during the period
constituted a large item among invisible exports. Available figures show
that the net inflow from this source declined from Gdes. 5,530,000 in 1929-
:30 to approximately Gdes. 3,000,000 in 1933-34, and to an almost negligible
amount subsequent to August, 1934, when American military aid was
withdrawn. Previous to 1929-30, net yearly United States government
expenditures undoubtedly amounted to a figure at least as great as the
1929-30 figure. It is evident, therefore, that income from this source alone
amounted to at least Gdes. 40,000,000 during the ten-year period. This
figure is net, and is conservative.
The movement of capital during the period further substantiates the
belief that Haiti not only was able easily to meet its debt payments, but
actually received balances in its favor which enabled it to augment ap-
preciably its productive capacity and improve its economic position.
The proceeds of the external bond issues of the 1922 loan, to be sure,
were largely used for refunding purposes. On the other hand, after ac-
complishment of all refunding operations and other purposes for which the
Series A loan was floated, there remained a balance of Gdes. 12,025,552.65.
This amount was expended in full during the period beginning in 1927 when
the work of the Claims Commission was completed (arid these funds be-
came available), and ending in 1932. The records show that this sum was
expended for public works: chiefly for constructing vocational school
buildings, roads, and irrigation systems. Expenditure of these funds
resulted in direct purchases from abroad of miaterials, or through augment-
ing purchasing power (labor payrolls, etc.) increased the ability of the
country to buy imported merchandise. Consequently, imports during the
ten-year period were inflated by the effect of the application of this new
.capital received from the proceeds of the Series A loan.
SNeedless to state, the flotation of a foreign loan inevitably tends to
augment imports into the borrowing country during the earlier years of the
,loan's history, when borrowed capital is applied to public works and other
purposes within the country. When these works are completed, productive
:capacity theoretically should increase. The borrowing country meanwhile






HAITI: REPORT OF FISCAL REPRESENTATIVE


proceeds gradually to pay back the principal of the loan, with payments for
debt service increasing each year as productive capacity (and capacity to
pay) increases.
Haiti is now going through the transition period, when the tangible
benefits received from the application of borrowed capital are beginning
to accrue and production for export is increasing. Export statistics, so far
as concerns volume, bear out this statement. The customs statistics demon-
trate that export production is increasing. World depression and low
commodity prices, however, have retarded normal development Never-
theless, the Republic has reached the point where the export trade definitely
exceeds imports.
In the same way, the application of other fund's received from the ex-
ternal and internal loans has indirectly enabled the country to maintain the
value of imports on an adequate sale. Cash awards of the Claims Com-
mission, paid from the Series "A" issue, amounted to Gdes. 6,055,502.25.
Most of the amount represented by these awards undoubtedly was expended
in Haiti. Although the application of the Series "B" issue for the same
purpose did not produce an immediate cash return, the gradual amortization
of the issue and the regular payment of interest released more than Gdes.
21,000,000 for expenditure in Haiti.
Similarly, the settlement of principal and interest on a note due the
Banque Nationale de la R6puiblique d'Haiti in the amount of Gdes.
9,268,045.65, and paid from the proceeds of the Series "A" issue, has re-
placed a claim against the treasury with cash which was thus made avail
able for banking operations. Then too, the payment of cash awards from
the Series "A" issue enabled the National Railroad to continue operations.
Aside from these tangible results, it is apparent that the restoration of
business confidence resulting from settlement, through the flotation of the
1922 loan, of the government's fiscal problems released private capital
within the country, which capital, applied to business enterprises and other
purposes, tended to maintain the volume of the import trade despite the
relatively small volume of the export business in the earlier years.
During the last ten years the inflow of private long-term and short-term
capital undoubtedly exceeded the outflow. New industrial enterprises were
established with capital obtained from abroad. Reference is made particu-
larly to the sisal development at Fort Libert6, the Pineapple Company at
Cap Haitien, and more recently the Standard Fruit Company of Hayti. The
first two companies were going through a developmental period during the
period, involving heavy expenditures of capital on which adequate returns
have not yet been received. Disbursement of these funds within the Repu-
blic has increased purchasing power, and has resulted also in the direct
expenditure of funds for imported materials. The effect has been to inflate
the figures covering imports during the ten-year period. Not until this
foreign capital is paid back to the lenders, through increasing the export







HAITI: REPORT OF FISCAL REPRESENTATIVE


production of the commodities grown by these companies, will the initial
artificial inflation of imports be entirely compensated by items on the export
side of the international balance sheet.
The development of the local sugar industry illustrates the same point.
SAlthough the original plant was built from investments made in the early
part of the twenty-year period studied, the company during the past ten
years is known to have expended further sums for plant improvements,
particularly for the purpose of augmenting its export production. The
steady increase in the productive capacity of the enterprise during the past
several years has been particularly noticeable.
The above study is not intended to be exhaustive. No mention has been
made of innumerable other "invisible" items on the credit, or export, side
of the balance sheet (tourist receipts, income from government and private
deposits or investments abroad, etc., etc.,). Except for the statement cover-
ing'merchandise imports and the "import" or debit items resulting from
service of the public debt, no attempt is made here to present the many
other individual items on the debit side of the balance sheet.*
It is believed, however, that enough has been set forth to demonstrate
beyond question that not only has Haiti been able easily to service its
external debt, despite an apparent deficiency in the early years in merchan-
dise exports, but that in general the country has entered a period where
the application of borrowed capital has begun to produce results in the
form of increased exports, which should enable the Republic to canry easily
a much larger public debt than it does at present.

Ports of Entry for Imports
The decline in the import trade recorded in 1935-36 was due entirely to
lessened activity in importing at Port-au-Prince. At all other ports of entry
taken together, the value of merchandise received from abroad was higher
than the previous year. Among the larger cities, Gonaives, Jacmel and
Jer&mie were the only ports of entry, in addition to Port-au-Prince, which
reported lower import values, and in those instances the declines were
relatively small.
At Port-au-Prince, however, total imports declined by Gdes. 3,297,505
to a total of Gdes. 27;696,560 when comparison is made with the corre-
sponrding figure for 1934-35. Since imports for the whole country declined
by Gdes. 3,240,995 during the same period, it is evident that somewhat
disappointing results in the import trade as a wholle were largely confined
to the slump in trade at Port-au-Prince. Again comparing the two fiscal
years, the import trade of the country as a whole declined by 7.88 per cent
last year, while at Port-au-Prince imports dropped by 10.64 per cent.

*Details respecting the balance of international payments are given in the Annual Report of the Financial
Adviser-General Receiver, fiscal year 1932-33, page 5.







HAITI: REPORT OF FISCAL REPRESENTATIVE


The past fiscal period marked the first time in many years that Port-au-
Prince has failed to increase its lead as the principal port of entry of the
Republic. Imports received at that city comprised 73.07 per cent of the total
import trade of the Republic in 1935-36, compared with 75.30 per cent the
previous year. Since Port-au-Prince is the only port of entry where large
bulk shipments of gasoline are received, the sharp drop in gasoline imports
during the past year contributed to the poor showing of Port-au-Prince
compared with other ports of entry. Port-au-Prince is also the center of
the wholesale and retail trade in cotton goods. The recent slump in cotton
goods importing, due to factors enumerated elsewhere in this report, tended
to affect adversely the import statistics at the capital city.
Other ports of entry- for the most' part showed increased activity last
year in the import trade. At Petit Goave, for example, import values
increased by Gdes. 131,346,' or by 45.60 per cent; at Saint Marc by Gdes.
202,822, or by 17.48 per cent; at Port-de-Paix by Gdes. 62,554, or by 10.86
per cent; and at Gap Hai'tien by Gdes. 70,475, or by 2.35 per cent.
In both years under comparison, Port-au-Prince, Cap-Haitien, and Cayes,
in that order, were the leading ports of entry. Saint Marc, in fourth place
last year, had been in fifth place the previous year. The sharp rise in
import values at that city last year accounted for the change, which largely
may be ascribed to the banana development in the Artibonite Valley, which
Saint Marc serves as a pdnt.

Ports of Shipment for Exports
Unlike the import trade, which as we have seen is concentrated largely
in Port-au-Prince, the commerce in exports is fairly evenly distributed
among the leading open ports. As in the case of the import trade, Port-au-
Prince is regularly the leading port of shipment; although here agaii, as
has been noted in connection with the import trade, Port-au-Prince -in
1935-36 did not participate to the extent that other leading ports did in the
general rise in the export trade of over thirty-two per cent recorded in
1935-36.
All ports of shipment reported. a considerable advance in the value of
the export trade passing through the custom houses, but whereas most of
the larger ports were able to record gains of between twenty and seventy-
five per cent, export commodities shipped through the capital city in value
were only 10.18 per cent greater than in 1934-35.
Port-au-Prince handled 27.9 per cent of the total export trade in 1935-36,
as against 33.58 per cent in' 1934-35. While shipments of coffee, sugar and
bananas through Port-au-Prince increased in 1935-36, the value of cotton
and sisal shipments declined. Next to Saint-Marc, Port-a' Prince is the
leading port of shipment for cotton and it is the only port from which
sugar is exported.






HAITI: REPORT OF FISCAL REPRESENTATIVE


C ap Haitien was the chief beneficiary of the rise in exports. Shipments
from that port advanced in value from Gdes. 3,491,999 in 1934-35 to Gdes.
6,118,111 in 1935-36, or by 75.25 per cent. That city handled 12.96 per cent
of the total export trade of the Republic in 1935-36, compared with 9.80
Super cent in 1934-35 and 11.37 per cent during the five years ending in
1935-36. The rise may be attributed almost entirely to the sharp gain in
coffee shipments, which more than doubled in value. The coffee harvest
was very abundant in 1935-36 in the region for ihich Cap Haitien serves as
aport of shipment.
At Gonaives, exports in 1935-36 increased in value by Gdes. 971,652, or
by 23.89 per cent. Boll weevil damage reduced the value of cotton exports
by Gdes. 293,333, but coffee exports rose in value by slightly over one-third.
Jadmel made a surprisingly good showing in 1935-36 considering that the -
region around .the city was one of the chief sufferers from the floods of
October, 1935. Exports through that port rose in value from Gdes. 2,620,-
795 in 1934-35 to Gdes. 4,274,705, or by 63.13 per cent. Coffee and cotton
were the only exports of importance. Boll weevil damage cut the value of
5ottton exports in half, compared with the 1934-35 total, but coffee exports
advanced to a total value of Gdes. 4,050,106, compared with Gdes. 2,226,383
in 1934-35.
The export trade at Saint Marc is largely dependent upon the size and
value of the annual cotton crop. Exports of cotton declined in value in
1935-36, but coffee and sisal shipments advanced sufficiently to permit
recording a net gain in exports amounting to Gdes. 228,792, or 5.78 per
cent.
At Cayes, export values increased by Gdes. 1,172,536, or by 39.50 per
cent. Cotton exports from that city increased both in quantity and value,
contrary to the results recorded in the case of other cotton-producing
centers.
Although J6r&mie is a relatively unimportant shipping port, it is fitting
to record the fact that the export statistics for 1935-36 reveal a larger
percentage gain in value of exports at J&r&mie than at any other city of
the Republic. Exports more than doubled in value, reaching a total of
Gdes. 2,378,081 in 1935-36, as against only Gdes. 1,073,081 in 1934-35. It is
a matter of curious interest that, judging from volume of exports, the
coffee harvest appears to have been most abundant in the regions most
severely stricken by the floods of October, 1935.

Shipping
Haitian foreign commerce in 1935-36 was served by 672 steam and motor
vessels registered in the aggregate at 1,609,795 net tons. The 765 vessels
which called at Haitian ports the previous year had a combined tonnage
of 1,822,179. The figures indicate a decline of roughly twelve per cent in
shipping facilities offered to Haitian commerce.






HAITI: REPORT OF FISCAL REPRESENTATIVE


However, the above figures include large tourist vessels calling ait Port-
au-Prince on cruise voyages and carrying no freight cargoes. These ships
totalled 15, in 1935-36, compared with 20 in 1934-35. Their combined
tonnage amounted to 161,539 net tons in 1935-36 compared with 251,423 net
tons in 1934-35. Deducting these from the totals already given, we find
that 657 vessels entered Haitian ports in 1935-36, or 88 less than the
previous year.
The explanation for the drop lies chiefly in the fact that in 1934-35 two
companies for several moriths were competing with each other in buying
bananas, and fruit purchased was transported to markets abroad on a
number of small fruit boats which made many stops at open and closed
ports along the Haitian coast. With the granting of a concession to the
Standard Fruit and Steamrship Company, this nianner of transporting fruit
was for a time superseded by overland transportation of the fruit to the
larger ports of shipment, where the fruit was loaded on large steamers
following regular itineraries. This more orderly manner of transporting
the fruit has resulted in an abrupt drop in the number of ship's entering
Haitian ports. However, as the banana industry develops and the volume
of business increases, more ships inevitably will be used. Already it has
been found that the fast passenger and freight ships which carry to New
York most of the bananas now available for export occasionally are unable
to load all of the bananas bought. Accordingly, the fruit company for a
brief period added two small vessels to supplement the cargo space available
in the larger vessels.
However, the decline in the number of vessels entering Haitian ports
was not due entirely to a drop in American carriers. Netherlands vessels
declined in number from 169 in 1934-35 to 157 in 1935-36; British ships
from 63 to 46; French ships from 34 to 29; and all others from 112 to 80.
German ships, on the other hand, increased in number from 81 in 1934-35
to 84 in 1935-36, and tonnage increased from 173,548 to 180,761.
In number of vessels, American shipping, as usual, led with 41 per cent
of the total in 1935-36, compared with 40 per cent the previous year.
Netherlands ships remained in second place with 23 per cent of the total
in 1935-36 and 22 per cent in 1934-35 and Germany remained in third place
with 13 per cent in 1935-36, an increase from 11 per cent recorded in 1934-
35. British shipping declined in number from 8 per cent of the total in
1934-35 to 7 per cent in 1935-36, and French shipping, in fifth place, remain-
ed the same with 4 per cent of the total in both years. Ships of other
nations comprised 15 per cent of the total in 1934-35 and 12 per cent in
1935-36. Fewer callings of Japanese ships in the latter period in part
accounted for the drop in the "all other" category.
Measured in terms of tonnage, substantially the same relationship existed
except that several large tourist ships of French registry which called at
Port-au-Prince in 1935-36 brought about an increase in aggregate tonnage






HAITI: REPORT OF FISCAL REPRESENTATIVE


from the total reported in 1934-35, although in number of vessels the total
dropped off slightly in 1935-36.
While there was a noticeable fall in the number of ships and total ton-
nage serving ocean-borne commerce, the facilities offered were quite ade-
quate to meet demaands for cargo space. Haiti is exceptionally well
supplied with shipping facilities connecting its ports with the European and
American countries where it buys and sells merchandise. Regular and
frequent sailings, and a number of fast, modern vessels make trade with
the United States especially easy. It must be recognized that sales of Hai-
tian export merchandise, to the United States have been greatly aided by
the improved facilities offered in recent years by the shipping companies-
a movement initiated at a time when cargoes destined for the United States
were small, and an eventual movement of coffee and bananas toward the
American market could not be clearly foreseen.
In value of export merchandise carried, Netherlands ships led all others
in 1935-36 with 27.15 per cent of the total, recording a gain from 23.61 per
cent in 1934-35. American ships were in second place with 20.07 per cent
in 1935-36 compared with 21.34 per cent in 1934-35. British vessels carried
15.15 per cent of the export trade in 1935-36, as against 18.90 per cent in
1934-35. French ships, carrying principally toffee, gained in their share of
the export trade because of the large crop. As against 13.34 per cent of
total exports carried in French bottoms in 1934-35, the French share rose
to 18.26 per cent in 1935-36. In value of export goods carried, the total
shipped in French vessels rose from Gdes. 4,719,033 in 1934-35 to Gdes.
8,626,072 in 1935-36.
Most of the exported merchandise transported to France was carried in
Netherlands and French ships, which carried exports valued at Gdes.
6,871,112 and Gdes. 5,954,574 respectively. German, British and American
vessels carried most of the remainder. British ships carried 49 per cent of
exports consigned to the United Kingdom. Of exports to the United States,
Valued at Gdes. 6,727,449, fifty-eight per cent was transported in American
bottoms, with the remainder divided about equally between ships of
Netherlands and Norwegian registry.
Ships flying the American flag led in the import trade, carrying 54.21
per cent of total imports in 1935-36 and 57.30 per cent in 1934-35. Nether-
lands shipping increased its share of the import trade from 19.93 per cent
in 1934-35 to 21.02 per cent in 1935-36. Norwegian and German ships
carried 8.28 per cent and 8.30 per cent of total imports respectively in
1935-36. The German share increased slightly from the previous year's
figure, while the Norwegian share nearly doubled in value (from Gdes.
1,608,910 in 1934-35 to Gdes. 3,146,217 in 1935-36).
Of American goods imported in 1935-36, nearly 60 per cent was carried
in American ships. Netherlands ships were second with 24 per cent, and
Norwegian ships third, with 13.4 per cent. Of British goods imported in
1935-36, and valued at Gdes. 4,787,708, American vessels carried 73 per






20 HAITI: REPORT OF FISCAL REPRESENTATIVE:

cent, and Netherlands ships most of the remainder. British ships handle
very little of the import trade in British goods, their importance in the
shipping statistics being due largely to their services in carrying exports,
and particularly sugar, to England.
Since Haiti is an island nation, and since it depends upon the sale of its
export products for so much of its purchasing power, the nature of shipping
facilities and the cost of its water-borne commerce are matters of vital im-
portance to the economic well-being of the Republic. Unfortunately, Haiti
has no shipping lines of its own, other than those engaged in coast-wise
traffic. Consequently, Haiti has to rely upon the competition of foreign-
owned lines for the maintenance of reasonable rates.
SIn the years since the war, one line after another, in order to avoid cut-
throat competition with other lines, has fallen into socalled shipping pools,
or freight conferences, and competition has steadily diminished. Thus, at
the present time, there are three freight conferences which constantly serve
and, at the same time, constantly menace Haitian commerce: The Haiti-
Gulf- conference, the New York-Haiti conference and the European-Haiti
conference. During the world depression from which we are just emerging,
pressure on these various shipping lines to increase rates to compensate
their falling freights, at the expense of such freights as remained, required
anxious care on the part of the Haitian government to keep Haitian exports
from being barred from foreign markets by the urge of one or the other
of these conferences to raise rates to a point where the competitive position
of Haitian products in foreign markets would have been seriously menaced,
if not completely destroyed. Only one or two of these foreign shipping
lines recognized Haiti's urgent need and used such influence as they could
to restrain the others from increasing rates to a prohibitive point.
On the whole, the government has been successful, in so far as export
freight rates are concerned, if one considers the present rates as maximum
rates. Certainly, the government at no time could accept the thesis of the
lines that whenever their freights from other countries, including those
from Haiti, diminished in total bulk, they had to raise the rates to compen-
sate. The government's position has been that rates had to be made com-
petitive with those obtaining on other trade routes, so that Haitian coffee,
or cotton, or sisal, could be put down in the world markets at prices which
permitted these products to be sold in fair competition with similar products
from other lands.
On the other hand, not so much attention has been paid to the rates on
the import of merchandise nor on the carrying of passengers. Today, to
give an example, an automobile (boxed) can be shipped to Shanghai from
San Francisco-at a cost of $82.50. The freight on the same car shipped to
Port-au-Prince from New York, unboxed, amounts to $80.90, and if boxed
the freight would be $132.00. Yet the distance from San Francisco to
Shanghai is more than four times the distance from New York to Port-au-
Prince.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Again: Passenger rates have been increased to the point where travelers
from New York, intending to stop in Haiti, and given approximately equal
accommodations, must pay as much for passage as they would pay to visit
Europe. Yet the distance to Europe is more than twice as great as to Haiti.
Under the circumstances, the reputed interest of some shipping lines in
developing Haiti as a tourist resort appears questionable. Only for cruise
passengers making a complete round trip of Caribbean ports is there any-
thing like an attractive fare.
Haiti may well state that it is suffering from unjust discrimination in the
rates allowed by the shipping lines. Carriers should realize that their own
interests are better protected if the vital service they render Haiti is
adjusted to a cost which does not retard the natural development of its
foreign trade; and more of the carriers should 'be willing to recognize the
fact that immediate profits are really far less important to their ultimate
well-being than would be the case if their objective were to give reasonable
aid in assisting the country to become a more prosperous trading nation,
handling a much larger volume of commerce.


Tourist Trade
Haiti receives visits from comparatively few of the large tourist ships
on special cruises to West Indian waters. As we have related above, only
fifteen callings of this kind were made in 1935-36, compared with twenty
the previous year. Nevertheless, there were many hundreds of passengers
who visited Port-au-Prinae on these occasions, and their expenditures in
Haiti constituted a source of "invisible" income of no mean proportions.
Of still more importance are the amounts expended by tourists and
travelers visiting Haitian ports on ships following regular itineraries. In
this direction, there was noticeable improvement in 1935-36, and Cap Hai-
tien was the chief beneficiary. During the past year ships of one line have
been making weekly callings at Port-d'e-Paix and Cap-Haitien. These stops
are made primarily to load bananas, but they also give an opportunity for
the many tourists aboard the ships to visit the Palace of Sans Souci at Milot
as .well as the famous Citadel. Thus, these rerarkable historic ruins,
outstanding among the tourist attractions of the Caribbean area, at last
have made easily accessible to travelers. To Haiti this means directly an
expanding income from-tourist receipts, and indirectly a means of making
the country better'known abroad.


Foreign Commerce by Months
Seasonal variations in the foreign commerce of the Republic, because of
their direct effect on revenues, should be carefully observed'. The fiscal
administration must at all times make allowance for the periodical rise and
fall of revenues characteristic of a one-crop country.






HAITI: REPORT OF FISCAL REPRESENTATIVE


The past fiscal year was notable with respect to seasonal variations in
foreign trade in two respects: first, in the remarkable absence of a seasonal
swing of the import curve; and secondly, in the fact that exports from
month to month on the contrary showed considerably more variation than
usual. These characteristics are clearly revealed in Chart No. 1, showing
the value of total exports and total imports by months.
Imports varied little above or below the Gdes. 3,000,000 level throughout
the year. Ordinarily, the early months of the year record an upturn in
imports as merchants acquire .stocks in anticipation of the marketing of the
coffee crop. In 1935-36 the usual fall activity did not occur. Coffee prices
were low and the crop was late in reaching market. Importers consequently
delayed making commitments until reliable information was available as to,
the size and value of the crop. Furthermore, the new legislation affecting.

CHART No. 1
VALUE OF TOTAL IMPORTS AND TOTAL EXPORTS, BY MONTHS,
FISCAL YEARS 1932-33 TO 1935-36.
MILLIONS OFN
GOUL/DES
SIt

6 _
\ MPOTS I I EXPORTS



I13 1- / i 934 /4- 19 /9.-36





the retail trade necessitated many adjustments among mercantile establish-
ments, particularly in the cotton goods trade, which is the leading factor
in retail commerce and in importing. Stocks of a number of leading
retailers were liquidated and acquired by many smaller establishments for,
the most part unequipped as to resources and enedit standing to carry on
business on the previous scale. Consequently, there as a period of several








months when the import trade was adjusting itself to new conditions.
Imports of _goods entering into the bulk of the retail omntmerce were
sluggish during this period, and it was not until near the enid of the fiscal
year that the import figures showed evidence that the slack was being
taken up.
Meanwhile, trade relations with France were interrupted by the denunci-
ation of the commercial convention between the two countries, resulting
in uncertainty as o the marketing of coffee and with elutae on the
1932-1933 1933-1934 /34 --/9S5 /93S -/936

the retail trade necessitated many adjustments among mercantile establish-
ments, particularly i'n the cotton goods trade, which is the leading factor
in retail commerce and in importing. Stocks oif a number of leading
retailers were liquidated and acquired by many smaller establishments for,
the most part unequipped as to resources and credit standing to carry on
business on the previous scale. Consequently, there was a period of several,
months when the import trade was adjusting itself to new conditions.
Imports of goods entering into the bulk of the retail oombmerce were
sluggish during this period, and it was not until near the end of the fiscal
year that the import figures showed evidence that the slack was being
taken up.
Meanwhile, trade relations with France were interrupted by the denunci-
ation of the commercial convention between the two countries, resulting
in uncertainty as to the marketing of coffee and with it reluta~nce on the






HAITI;: REPORT OF FISCAL REPRESENTATIVE


part of importers to carry the usual stocks of merchandise. Continued
weakness in coffee prices added to trade uncertainties.
These various developments during the course of the year all tended to
limit activity in the import trade. Under ordinary circumstances, and
considering that export drops were of large size and produced a sharp rise
in the inflow of funds from abroad, it would be expected that the import
trade would closely parallel the upward movement of exports.
On the side of exports, monthly variations in the value of the trade were
far from normal. The coffee crop was unusually late in reaching market.
Heavy rains in October interfered with the transportation of coffee from
Sthe producing regions. The sudden drop in coffee prices late in November
and continuing on into December prompted growers to hold their coffee
in expectation of a rise. It followed, therefore, that there was an exception-
al concentration of export activity in the months from January to April.
In March, when heavy deliveries of the new cotton crop were added to
coffee shipments, the export trade in value reached a peak of Gdes.
S8,450,017, a figure not exceeded in any month since April, 1930.
These unpredictable extremes in the inward and outward flow of
merchandise have their corresponding repercussions on revenues. The
"dead season" so characteristic of business in Haiti begins in July, and
nlay last, as it did in 1935, until well into the next fiscal year. When this
drying up of foreign comnmerce-and hence of revenues-occurs, treasury
reserves alone can provide the funds necessary to carry on government
operations. It is therefore of the utmost importance that those reserves
be adequate to tide the government over the slack periods which in some
years, as in 1935-36, may extend over a period of several months.

Commodities Imported
We have seen that merchandise imports in 1935-36 declined in value by
7.87 per cent from the 1934-35 total. In the latter fiscal year imports in the
aggregate were valued at Gdes. 41,161,621, from which they dropped to
Gdes. 37,920,626 in 1935-36.
The decline of Gdes. 3,240,995 in imports is attributable very largely to
the recession in the cotton goods trade. Cotton textiles dropped in value
of imports by Gdes. 949,070, or by 10.17, from the 1934-35 total of Gdes.
9,351,662; and since this category alone usually accounts for dose to one-
third of the total import trade, the influence on the total value of the import
trade during the year was considerable.
Although imports of cotton goods dropped sharply, the decline did not
affect all lines of cotton merchandise. Dyed or printed piece goods of the
plain-woven varieties were imported in greater quantity during 1935-36
than during the previous year. In value, the increase in receipts of this
quality of merchandise, which came chiefly from England, amounted to
Gdes. 440.091. Other lines of imported cotton goods, however, fell off






HAITI: REPORT OF FISCAL REPRESENTATIVE


considerably in quantity and value. Receipts of plain bleached or unbleach-
ed cotton cloth were valued at Gdes. 356,598 less than a year ago; cotton
hosiery, etc., at Gdes. 263,679 less; cotton knit goods, at Gdes. 125,742
less; and miscellaneous cotton goods, at Gdes. 212,126 less.
The predominant position of the textile trade in relation to the value
of total imports is shown in the following table, which also permits com-
parison with the previous year:
1935-36 1934-35
Per cent Per cent
Textiles, clothing, etc.............................................. 28.0 29.9
Foodstuffs ..................................... .................... 22.0 19.3
Gasoline, kerosene, etc............................................. 5.4 5.9
Iron and steel products............................................. 4.2 4.3
Automobiles and trucks .......................................... 3.2 2.9
Household utensils, etc............................................ 2.4 2.8
Soap ........................................................................ 3.9 2.7
Chemical & pharmaceutical products...................... 2.3 2.5
Lumber .................................................................. 2.4 1.7
Liquors and beverages.............................................. 1.2 1.5
Jute bags, etc.......................................................... 2.1 1.5
Agricultural implements............................................ 1.5 1.3
All other imports..................................................... 21.4 23.7
Total................................................................ 100.0 100.0
The decline in the importance of the textile trade was accompanied by
an equally striking gain in the importance of foodstuffs on the list of total
imports.
Qther classes of imports which assumed greater importance in 1935-36
were soap, lumber, jute bags, agricultural implements, automobiles and
trucks.
The gain in value of foodstuffs imported was due chiefly to an increase
of 16.92 per cent in flour imports. Receipts of flour in 1935-36-were valued
at Gdes. 3,815,195, or Gdes. 546.485 more than receipts during the previous
year. Since flour .prices increased during the year, the rise in terms of
quaintity was not so marked. Nevertheless, the customs statistics show an
increase to 11,894,084 kilos in 1935-36, or 104,855 kilos more than flour
imports recorded the previous year, indicating a gain of 8.89 per cent.
Although flour imports have increased, the trade in this staple commodity
'has'. hot yet approached the proportions it reached before the depression
when flour imports were two or three times greater than they are at present.
SQther foodstuffs showing important gains in 1935-36 were: rice, imports
of which increased in value by Gdes. 168,683, or 44.54 per cent; butter,
which increased in valued by Gdes. 54,143; and preserved milk, which
increased in value by Gdes. 41,097. Imports of fish, one of the principal
articles of domestic consumption, increased in quantity imported by 5.76
per cent, but declined in value by Gdes. 101,130, or 6.28 per cent.
Gasoline imports in value were nearly cut in half when comparison is
.made with the previous year. The drop is partly accounted for by a price
decline, but it volume of imports also there was considerable shrinkage,
with' total imports during 1935-36 registering only 5,741,472 liters, or







HAITI: REPORT OF FISCAL REPRESENTATIVE'


3,130,923 less than the total recorded in 1934-35. The drop in volume of
gasoline imports amounted to 35.29 per cent, and in value to 44.05.per cent.
This substantial drop in gasoline imports does not necessarily indicate
diminished consumption. The oil companies established in Haiti have
extensive storage facilities and imports for the most part are made in bulk
and at infrequent intervals. The decline in imports recorded in 1935-36
indicates simply that consumption requirements were largely filled from
domestic supplies accumulated the previous year and which were not entire-
ly replaced by new imports during the year under review.
Kerosene imports in 1935-36 totalled 4,098,735 liters, or 158,373 liters
less than in 1934-35. As in the case of gasoline, the average price of kero-
sene declined', resulting in a 14.51 per cent drop in the value of kerosene
imported, whereas in terms of quantity, the decline amounted only to 3.72
per cent.
That gasoline consumption in Haiti probably has not diminished is
indicated by the fact that during the past four years imports of automobiles
and trucks have varied very little. In number of units imported, the customs
figures show 323 in 1935-36, as compared with 328 in 1934-35, 342 in 1933-
34, and 340 in 1932-33. In total value, imports of automobiles and trucks
in 1935-36 registered an increase of Gdes. 13,345, or 1.11 per cent.
The group comprising miscellaneous iron and steel imports, which does
not include household utensils, agricultural implements, and many other
metal articles specifically included in other groups on the customs lists, is
a leading item among imports. Imports under this category totalled in
value Gdes. 1,525,018 in 1935-36, or Gdes. 227,314 less than during the
previous year. The decline amounted to 12.98 per cent, and in large part
may be ascribed to a drop of Gdes. 179,496 under the category comprising
structural steel and iron. In the group which includes steel roofing sheets,
there was a decline of Gdes. 93,309 in value of imports, and under the sugar
machinery group the value of 1935-36 imports dropped by Gdes. 90,176.
Household utensils, in terms of value, registered a decline of Gdes. 224,-
634, or 19.35 per cent, in 1935-36. Principal groups under this classification
include enamelled ware, which declined by Gdes. 181,461 in value, and
earthenware, pottery, etc., imports of which fell off by Gdes. 93,719 in value.
Soap imports in 1935-36 increased sharply in value and in quantity due
largely to decreased domestic production. In value, imports of this staple
commodity reached Gdes-1,476,830 in 1935-36, or Gdes. 348,422 more than
in 1934-35. In terms of percentage increase, the figures show a rise of 14.72
per cent in quantity, and 30.89 per cent in value. Indicative of the decline
hi domestic soap production is the fact that in the group which includes
vegetable oils and other materials used in soap-making, the total value of
imports dropped from Gdes. 898,817 in 1934-35 to Gdes. 330,133 in 1935-36.
Although the use of foreign soap has increased, imports are still consider-
ably under the pre-depression level, as can be seen from an examination of
Chart No. 2.







26 HAITI: REPORT OF FISCAL REPRESENTATIVE
CHART No. 2
QUANTITIES OF LEADING COMMODITIES EXPORTED AND IMPORTED
FISCAL YEARS 1916-17 TO 1935-36.
EXFPOR T5 /MPOFI T5
MiLLIONS OF /LOS Mi/LLIONS O /"f/L.03
\ COFFEE A


M/LL/O/NS OF/ K/L05

COTTON

4




/..AL .






SUGA
4-


0



I//LL/ONA/ OF /K/LOS5


S LOGWOOD
so


AM/LL /OVN. OF /LOS
3

27


CACAO
/7/8/920Z2/2Z4324.26272Z930.Y3Z33S.3536


f V l
TEX T/L ES
Af/LL/ONS OF- rf'/LOS


fM/LL/ONS5 OFP //LOS




8





M/LL/ONS OF L/T7EtS
.-t A


lI/LL/O/N OF /f/L.OS
.50AP




NUMBERS

AUTO AND
7 TRUCO S '



/7/8/902O/ZZZ324Z526?778ZN 3ZS^3533


\ !V \ I


"^'


.i v V \i







HAITI: REPORT OF FISCAL REPRESENTATIVE 27"

Chemical and pharmaceutical products declined in value of imports by
Gdes. 122,543, or by 11.92 per cent. Decreased purchases of crude chemicals
accounted for the larger part of the decline, although imports of patent
medicines also dropped in value.
Largely because of the increase in prices which followed the interruption
in trade relations with France, consumption of imported liquors and bever-
ages, as measured by value of imports, fell off sharply in 1935-36 when
comparison is made with the previous year. Customs statistics show total
imports in 1935-36 under this category of Gdts. 465,623, or Gdes. 141,832
less than in 1934-35, indicating a decline of 23.35 per cent. Imported wines,
mostly of French origin, dropped in value from Gdes. 410,084 in 1934-35
to Gdes. 239,965 in 1935-36. Beer imports increased in value by Gdes.
27,979.
The import group comprising chiefly jute bags used in the coffee and
sugar trades registered an increase in value during 1935-36 of Gdes 205,160,
or 33.86 per cent. The gain was almost entirely due to augmented purchases
of jute bags from France during that part of the year when, by agreement
with that country, exporters were required to fill their coffee-bag require-
ments by purchasing at least 300,000 bags per year from France. Imports
of jute bags from France increased in value from only Gdes. 10,800 in
1934-35 to Gdes. 269,741 in 1935-36.
Imports of perfume and cosmetics, most of which usually come from
France, remained practically the same in value in both years, although
imports of French origin in this classification declined slightly, while
purchases from the United States increased by Gdes. 53,168 in value.
Lumber, imports in 1935-36 increased by 32.21 per cent in quantity and
by Gdes. 230,749, or 33.17 per cent, in value, reflecting suistaihed activity in
new building construction in Haiti. Cement imports, however, declined by
Gdes. 25.23 per cent in value, and as previously noted, imports of structural
steel and roofing sheets also dropped off when comparison is made with
the previous year. Paint importations remained substantially the same in
value in both years.
Imports of books and other printed matter declined in value by Gdes.
228,871, whiTe paper imports increased in value by Gdes. 180,571.
There was little change, compared with the previous year, in imports of
agricultural implements, brass and copper manufactured articles, cutlery,
and rubber tires. Imports of shoes increased in value, while tanned hides
and other leather imports declined. Similarly, declines were recorded in
the case of imports of radios, miscellaneous electrical apparatus, machinery,
silk goods, tinware, and cigarettes. Imports of matches declined slightly.
TobaIcco imports excepting cigarettes and leaf tobacco registered an
ncreaise of Gdes. 80,782 in value due to the increased use of foreign
prepared tobacco in the manufacture of domestic cigarettes.







HAITI; REPORT OF FISCAL REPRESENTATIVE


The unit prices of leading groups of commodity imports during the past
four years are given in the table bellow:
1935-36 1934.35 1933-34 1932-33
Unit Gourdes Gourdes Gourdes Gourdes
Cement......................... Kilo 0.05 0.05 0.06 0.05
Fish............................. Kilo 0.43 0.49 0.43 0.38
Wheat flour...................Kilo 0:32 0.30 0.28 0.25
Meats........................... Kilo 1.35 1.11 0.75 0.73
Rice..............................Kilo 0.27 0.27 0.26 0.22
Liquors. ....................... Liter 1.50 1.78 1.75 1.27
Lumber........................Cubic meter 90.29 89.61 99.95 85.95
Gasoline....................... Liter 0.10 0.11 0.15 0.16
Kerosene......................Liter 0.21 0.24 0.23 0.23
Soap............................. Kilo 0.52 0.46 0.47 0.41
Textiles..........................Kilo 3.58 3.31 3.31 3.06

Prices in 1935-36 declined only in the case of fish, liquors, gasoline and
kerosene, when comparison is made with 1934-35. Prices of cement and
rice, according to customs records, remained the same in both years. The
niolst striking rise in prices was recorded in the case of imported meats,
which rose from an average of Gde. 1.11 per kilo in 1934-35 to Gde. 1.35
per kilo in 1935-36.

Commodities Exported
The export statistics for the past fiscal year make it clear that the Re-
public is continuing to make rapid gains in the production of commodities
for export.
Chart No. 2 shows that coffee exports, after the nearly unprecedented
small crop of 1934-35, increased in 1935-36 to almost double the previous
year's figure. The chart shows that despite wide yea'r-by-year variations,
the long-term trend of coffee exports over a period of two decades is un-
mistakably upward. During the first of these ten-year periods, coffee
exports averaged 30,684,000 kilos annually. During the last ten years the
annual coffee crop reached an average size of 31,312,000 kilos. Exports in
1935-36 exceeded the latter figure by 4,779,000 kilos.
Cotton exports averaged only 3,192,000 kilos annually during the ten
years from 1916 to 1926. During the last ten years annual exports of
cotton, Haiti's second most important export crop, jumped to an average
of 5,277,000 kilos. Exports in 1935-36 exceeded the latter figure by 477,000
kilos.
SSugar exports averaged 4,712,000 kilos per year during the first decade
mentioned. During the last decade sugar exports averaged 18,873,000 kilos
per year, or four times the first figure. Exports in 1935-36 reached a record
high of 34,803,198 kilos.
Sisal exports in the entire 1916-1926 period totalled only 619,000
kilos. Since then, sisal exports have totalled 24,639,000 kilos, or an average
annual export of 2,464,000 kilos. Shipments last year, however, totalled
5,664,554 kilos, or more than double the average. Plantation-growing of
sisal accounts for the remarkable gain in exports of that commodity.







HA'ITI:REPORT' bF FISCAL 'REPRESENTATIVE


Banana exports were negligible four years ago. In succeeding years they'
increased from 272,820 stems in 1933-34, to 519,719 stems in 1934-35, and'
to 595,715 stems in 1935-36.
These five commodities comprised 93.51 per cent of the total value of all
commodities exported in 1935-36. Their relative importance in the table
of export commodities is shown below:
1s35-ss6
Gourdes Per cent
Coffee ......................................... 29,344,792 62.12
Cotton ................................................ 7,223,409 15.29
Sugar ................................................ 3,821,941 8.09
Sisal .................................................. 3,011,878 6.38
Bananas ............................................ 771,807 1.63
M olasses ............................................. 570,451 1.21
Cacao .............................................. .. 567,026 1.20
Cottonseed cake.................................. 511,064 1.08
Logwood .......................................... 476,521 1.01
Goatskins .......................................... 413,441 0.87
Rum .................................................. 168,627 0.36
Honey ................................................ 152,695 0.32
All other exports................................ 204,942 0.44
Total.......................................... 47,238,594 100.00

Of the minor export products, cacao shipments averaged 7,933,000 kilos
in the ten years ending in 1926, and 1,494,000 kilos in the ten years ending
in 1936. Exports in 1935-36, however, rose to 1,641,000 kilos, or higher
than any figure recorded in the previous five years.
SExports products other than those already mentioned in the text amount-
ed only to 4.28 per cent of total exports in 1935-36, and to 5.80 per cent of
total exports in the twenty years ending in 1936.
Although Haiti is still very largely a one-crop country, it should be noted
that coffee is steadily losing its predominant position among exports as
production of cotton, sugar, sisal and bananas increases. Coffee exports, in
value, comprised 76.21 per cent of total exports in the five years ending
in 1931. In the next five years this percentage dropped to 67.41 per cent;
and in 1935-36, despite a crop of nearly record size, coffee exports amount-
ed to 62.12 per cent of the value of total exports. -
If, as is confidently expected, banana production is rapidly increased, and
if production of sugar aind sisal continues on an upward trend, it will not
be many years before the country dan boast of a well-diversified list of
tropical export prodiucts,-with business and government revenues no longer
subject to unpredictable variations in the size of the annual coffee crop and
the prices offered on world markets for that commodity.

Coffee
The 1935-36 coffee crop was one of the largest on record. It followed
a crop which in turn was the smallest on record in many years.
Coffee exports in 1935-36 totalled 36,090,503 kilos, exceeding shipments
of this commodity in any year during the last twenty with the exception of







30 HAITI: REPORT OF' FISCAL REPRESENTATIVE

1932-33, 1927-28, and 1918-19. Practically all of the crop was sold before
the year-end, and only small quantities remained unshipped on September
30, 1936.
Compared with the previous year's crop of only 19,031,749 kilos, the
1935-36 crop registered a gain in quantity shipped amounting to 17,058,754
kilos, or 89.64 per cent.
In terms of bags of 80 kilos each, coffee exports totalling only 237,897
bags in 1934-35 increased by 213,234 bags to a total of 451,131 bags in
1935-36.
However satisfactory the past season may have been from the point of
view of volume, the value of the crop left much.to be desired. Coffee prices
failed to rally from the low level to which they receded in the latter part
of the fiscal year 1934-35. The 1935-36 crop was sold at an average price
of only $8.13 per 50 kilos, F.O.B. Haitian ports. In value, shipments of
coffee in 1935-36 reached only Gdes. 29,344,792, exceeding the much smaller
crop of 1934-35 in value by Gdes. 10,252,700, or by 53.71 per cent. In the
last twenty years, the annual coffee crop averaged Gdes. 49,055,375 in value;
and in the five depression years beginning with 1931-32, annual shipments
of coffee averaged Gdes. 29,191,539 in value.
Thus, prices were discouragingly low; but the problem which gave rise
to the greatest apprehension during 1936 was not the price of coffee, but
the question as to whether or not part of the crop could be sold at all.
The French government, in March, 1936, denounced the then existing
commercial arrangement between France and Haiti. In effect, this action
meant that no Haitian coffee after April 18, 1936, could be entered for
consumption in France.
SFortunately, most of the 1935-36 crop already had been sold, and little
difficulty was experienced in disposing of the balance in other markets.
Some coffee even continued to be exported to France where it was purchas-
ed by importers presumably either as a speculation in anticipation of an
early resumption of Franco-Haitian commercial relations, or as coffees to
be held in entrep6t and later re-sold to other European countries.
With the denunciation of the Convention with France the general French
tariff became applicable to all imports of Haitian origin. The French im-
porter had to pay in duties, taxes, and other charges an amount which
made the entry of Haitian coffee for consumption in France practically
prohibitive. Stocks of Haitian coffee in entrep6t at Havre were reported
to have mounted to 139,042 bags (11,123,360 kilos) in October, 1936, from
28,076 bags in October of the previous year. Thus, a quantity of Haitian
coffee equal to about one-third of the annual crop remained in warehouses
at Havre.
The virtual closure of the French market to Haitian exporters forced
the attention of the domestic coffee trade to the precariousness of its
position. Warnings had been repeatedly given that exporters could not
expect to retain their markets for coffee unless they improved the prepa-







HAITI! REPORT, OF FISCAL REPRESENTATIVE


ration and quality of their product. But until recently the trade had
taken no steps to protect itself. Even though France in May, 1935, failed
to renew its Commercial Convention with Haiti, and for several weeks
the all-important French market was closed to Haitian coffee, the local
exporters took no effective action. When the commercial arrangement was
renewed in July, 1935, but with the proviso that it could be denounced at
any time on thirty day's notice, the local coffee trade still failed to take
measures in its own protection. The buying and selling of coffee proceeded
throughout the 1935-36 season just as it had for a hundred years before.
Antequated methods of preparation applied to the bulk of the crop produced
coffee which for a large part was exportable only to the specialized Havre
market where long acquaintance with the Haitian product assured an es-
tablished demand and gave it a ready outlet despite defective preparation.
It came as a shock, therefore, to the local trade to have this leading market
blocked as an outlet for sales of Haitian coffee.
All reasonable assistance was given by the government to the coffee trade.
Since the United States, because of its nearness to Haiti and its importance
as a consumer of coffee, became the logical outlet for coffee previously sold
in France, efforts were renewed to interest- American coffee importers in
the Haitian product.
In April, 1936, Mr. C. A. Mackey, President of the New York Coffee and
Sugar Exchange, visited Haiti at the invitation of the government, and in
numerous conferences with members of the local coffee trade made known
the requirements of the New York coffee market. It was largely through
Mr. Mackey's efforts, and through his expert technical knowledge of the
coffee industry and of American marketing requirements, that exporters
in Haiti at last found it feasible to produce a quality of coffee acceptable in
the United States. Coffee exports to that country increased from only
62,103 kilos in 1934-35 to 775,040 kilos in 1935-36, with most of the latter
amount shipped in the last few months of the fiscal year. Success in selling
this comparatively small amount of coffee in the United States gives as-
surance that New York in time can become the leading consumer of Haitian
coffee of the better grades.
It is to Mr. Mackey and to his personal interest in Haiti--extending
beyond the bounds of a purely business relationship-that the Haitian coffee
trade is indebted for its present security in the face of the loss of its largest
outlet for coffee.
In July, 1936, a cup-testing station was opened in Port-au-Prince by the
National Service of Agriculture. Exporters have been able to have their
coffee sampled at this station by Mr. Howard Sneden, an expert familiar
with the requirements of the New York market, who came to Haiti at the
request of the Haitian government, and whose services were obtained
through Mr. Mackey.
On July 30, 1936, the Haitian government announced the signature of a
provisional trade agreement with Belgium. This agreement gives assurance







, 32 *HATI; REPORT, OF,.FISCAL, REPRESE NTATB

T that Haitian coffee can be shipped to Belgium on equal terms with coffee
from other countries. Shipments to this important market increased from
;3,110,317 kilos in 1934-35 to 5,645,061 kilos in 1935-36.
SIn an effort to remedy the "earthy" flavor of some Haitian coffee com-
plained of by New York buyers, the government began a campaign to
improve the coffee drying-platforms commonly used in Haiti. Funds totall-
ing nearly Gdes. 100,000 were contributed by the government, or were
allocated from a portion of the profits of the Banque Nationale de la R6pu-
blique d'Haiti, for the purpose of aiding coffee-planters in the construction
of concrete drying-platforms. It is intended to confine these activities to
definite districts (the region of Plaisance was first selected) in order to
.,demonstrate there that the use of concrete drying-platforms will overcome
Sthe earthy flavor which results from the widely prevalent custom in Haiti
of drying coffee on the ground or on crude drying platforms made of
packed earth.
It has long been realized that mechanical preparation of Haitian coffee
would eliminate the more serious defects complained of by roasters. Mr.
Leslie E. Springett, representing an English manufacturer of coffee ma-
chinery, visited Haiti in the latter part of the fiscal year 1935-36, and gave
considerable encouragement to the coffee trade through his demonstrations
of the results which can be obtained through the mechanical preparation
.of coffee. Through Mr. Springett's initiative and through the convincing
Demonstrations he was able to give members of the coffee trade, it is ex-
pected that the production of machine-prepared coffee will be greatly ex-
panded during the present crop season. Exporters for the most part at
Last have been convinced that by the expenditure of comparatively small
amounts for equipment a quality of coffee can be produced which will be
acceptable for delivery on the New York market. Not only can such coffee
be readily sold, but it will yield higher returns both to producers and to
:exporters.
The movement toward better preparation of coffee has gained momentum.
S-It is confidently believed that the general quality of the coffee produced in
Haiti already has been so improved as to make the trade no longer de-
pendent on the Havre market. Exporters have become better acquainted
with the requirements of other markets, and particularly those of the
American coffee roasters. Coffee previously sold on its appearance and
reputation alone is now being cup-tested before shipment, and is being
sold on the basis of its liquoring quality.
Intrinsically, Haitian coffee possesses flavor and body which make it a
preferred article of commerce on any market. The difficulties faced by the
trade arise solely from improper preparation, making sales difficult except
in specialized, markets such as Havre.







HAITI REPORT OF FISCAL REPRESENTATIVE 33

The problem which must be met by the Haitian coffee industry can be
no better expressed today than it was more than fifty years ago, when in a
report* to the Haitian government written in 1881, it was stated:
This Island has remained stationary in the midst of a pro-
gressively upward movement on the part of other coffee-produc-
ing Countries.
Moreover, Haitian coffee is sold with difficulty and at a lower
price than the coffees of India, Java, and of Central and South
America.
So true is this that in certain markets, as in London, for ex-
ample, or the United States, Haitian coffee is completely barred,
and it maintains its place with difficulty in the markets left open
to it.
Is Haitian coffee, then, of poor quality? No. Quite the contra-
ry, it is superior to almost any other choice variety, and the price
obtained for it is lower for no reason other than the defective
preparation to which it is subject.
For Haiti has retained the old method of preparing coffee ex-
clusively by hand-a method outmoded fifty years ago.
As in the past, the cherries are harvested only once; all cherries
are picked without distinction, the ripe. with the unripe. Cherries
which fall to the ground are left there, and are lost.
Once the harvest is completed, the cherries are placed on so-
called drying platforms where they dry during two or three
months, exposed in the wet season to all the inclemencies of the
atmosphere, without protection against the rains which rot them,
or the winds and hurricanes which scatter them and sometimes
sweep them away almost completely. And when the producer
gathers the coffee he considers himself lucky if more than a third
has not been lost.
After drying, comes the , or pounding of the beans in a
mortar. This is the decorticating operation. Again, there are im-
portant losses for the producer... But the operation of hulling coffee
with a mortar and pestle is very poorly done; beans are wasted
or crushed, and thus the producer loses a good part of his crop.
It is easy to understand why Haitian coffee, treated in such a
rudimentary fashion, does not have the fine uniform color which
brings success to competing coffees in European and American
markets, and why it contains a great number of black, broken and
discolored beans, and especially stones, as a consequence of
having been simply dried upon the ground...
At the rate other countries are advancing, the inferiority of the
Haitian product will only be accentuated in comparison with the
product of Haiti's competitors, and greater and greater difficulties
in finding outlets for Haitian coffee, will arise. The two markets
which alone remain open, France and Belgium, doubtless will not
delay, if there is no improvement, in following the example of
other countries, such as England, Germany, the United States,
etc. In other words, they will close their doors to us...
Cost what it may, Haiti must abandon its routine, antequated
habits and bring itself level with progress.

*The report was submitted to the Haitian government by Simmonds Frire, and was published in Paris in 1881.






34 HAITI: REPORT OF FISCAL REPRESENTATIVE

Progress in other coffee-producing countries has been rapid since the
above was written. Coffee roasters in the consuming countries have de-
manded, and obtained, better coffees. Not only in appearance has coffee
improved, but buyers have made more and more rigorous demands upon
producers to supply coffee having better cupping qualities. The emphasis
now placed on cupping merits was unknown fifty years ago. Coffee-pro-
ducers elsewhere have met those demands, and have met the competition
of coffees from other countries, by improved cultivation, by the scientific
curing of the beans, and by the use of mechanical aids in the preparation
of coffee from the time it is picked until it is bagged and ready for shipment.
The advance made abroad in the skilled cultivation and scientific curing
of coffee, generally speaking, has been accomplished by the coffee trade of i
the respective countries. Competition has been the compelling force. Im-
provement has resulted from private initiative and aggressiveness, and not
from government regulation or government financial and technical aid.
Government aid should not be needed in Haiti, although there has been an
unfortunate tendency on the part of some to depend upon the government
to relieve them of difficulties which have arisen because of their own
failure to keep pace with the progress made by their competitors abroad.
The Haitian coffee trade as a whole, however, already has become aware
of the fundamental defects in its organization and methods; and it is
equally acquainted with the measures which must be taken to place Haitian
coffee on an equal footing with the coffees of other producing countries.
The closure of the French market has given the impetus which apparently
was needed; and if the movement now under way for the development of a
modern Haitian coffee industry is carried forward vigorously, there is no
good reason why the trade before long should not feel secure from the
marketing difficulties which have confronted it.
At the same time, it cannot be too strongly stressed that security as to
foreign markets will not be complete unless modernization of the industry
is carried forward continuously. The trade must organize and adopt a
plan for concerted action. That plan must provide for eliminating eventually
"caf6 pil6". It is not flattering to contemplate the fact that Haiti is the
last coffee country in the world whidh uses so primitive a method of hulling
coffee. The responsibility for the continuance of antequated practices rests
squarely with the coffee merchants and exporters, and not with the pro-
ducers. If merchants will offer price advantages to the producers for ripe
cherries or for "cafe coque" the producers inevitably will change their
habits to conform with the new buying methods; and' when habits have
been gradually transformed in this way, the government at the proper time
can take measures to prohibit by law the decorticating of coffee by hand
methods.
Neither can the coffee merchants afford to remain complacent in the event
of a resumption of coffee-buying by France. Regardless of advantages
which may be offered by the Havre market, and regardless of any apparent






HAITI: REPORT OF FISCAL REPRESENTATIVE


:35


willingness of that market to absorb all offerings of coffee similar to the
grades sold in the past, the fact will remain that a considerable part of the
Haitian coffee is not prepared and presented in a way whidh will enable
it to compete easily in world markets. Basic defects in the method of pre-
paration remain. The permanence of any commercial arrangement cannot
be predicted; and the forces at work in all of Europe at present give no
reason for assurance that any or all European markets will remain open
to Haitian coffee. The world-wide movement toward economic selef-suf-
ficiency is leading European countries to develop their own sources of
coffee. France already receives large supplies from its own colonies.
Belgium is developing the Belgian Congo as a coffee country. Italy may
soon- be independent of the rest of the world for its supplies of coffee.
Preferences given to colonial coffees naturally tend to increase rather than
diminish, as each country endeavors to give special advantages to its own
colonies and territories.
The only remedy, so far as concerns Haiti, is to develop a type of coffee
which will find ready acceptance in the American market, and in such
European markets as will be open to Haiti. The United States is the largest
coffee-consuming country in the world. It is near at hand. It has been
demonstrated now that Haitian coffee, if pr6perily prepared, is acceptable to
American roasters.
It follows, then, that the Haitian coffee trade in the interest of its own
protection aggressively must improve the preparation of the coffee it sells
regardless of the fact that for the time being it may be able to sell every
kilo produced. Moreover, to be able to produce and sell should not be the
only aim. It is no less desirable that coffee produced should be sold at the
price it is worth-and without question Haitian coffee intrinsically is worth
much more than the price usually paid for it. Haitian coffee has suffered
not only from lack of proper preparation, and failure to keep pace with
world progress, but from the indifference of exporters as to the price of a
sale so long as the spread between the price paid to the producer and the
price received from the foreign buyer assures the usual profit. It needs only
the enterprise of one exporter, or of a very small group of exporters, to
break a system which has kept the Haitian coffee producer, and the entire
domestic coffee industry, on the same plane for a hundred years.
The program of building concrete drying platforms throughout the coffee
growing districts of Haiti should go far to remedy the sour and earthy
flavors sometimes complained of by purchasers of Haitian coffee. The
extension of machine preparation and scientific curing of the cherries will
further bring out the good cupping qualities of the Haitian product. It is
believed that by the time the next crop (1937-38) is harvested, the greater
part of the crop will be of a quality acceptable to the big coffee roasters
of the Urited States. As soon as adequate supplies of this superior coffee
are available it is to be expected that the coffee roasters will see fit to
include Haitian coffee as a regular component part of their trade-marked






HAITI: REPORT OF FISCAL REPRESENTATIVE


blends. This accomplishment will afford a continuing demand for the
Haitian product, and a substantial premium in price over the price obtained
for Haitian coffee offered without the small additional care in preparation
needed to bring out its full quality.
The advantages are obvious. Instead of selling coffee as "filler", to be
used more or less indiscriminately by roasters, the superior coffee will be
sought after by roasters as an essential ingredient of their blends. Definite
quantities will be needed each year, and roasters will be willing to pay high
prices to obtain the quantities needed. These higher prices will serve as an
index upon which the prices of all Haitian coffee sold abroad will be based.
The increase in value of the Haitian coffee crop will be so great as to
justify fuIly the extra effort made by exporters to furnish adequate quanti-
ties of superior coffee.
The domestic trade is off to a good start in the direction of better coffee
preparation. A successful year is in sight. Another year, with sustained
effort by the local trade, will put Haitian coffee in the high place among
superior coffees to which it is entitled.
SOnly the market can determine the size of the premium which superior
Haitian coffee eventually will receive, but already it is evident that the
New York merchants will pay from ten to fifteen per cent more for Haitian
washed coffee than it will for "natural" coffee, even though quantities of
washed or specially prepared coffee available at present are small, and the
large roasters are not yet ready to make Haitian coffee a regular standard-
ized part of their blends. At the end of the fiscal year 19356-36, for example,
when coffee merchants in New York were offering Haitian hand-picked
coffee at from 8 to 8Y2 cents per pound, offers of washed Haitian coffee
were quoted in NewYork at 94 cents.
On September 30, 1936, coffees of various leading varieties were being
offered in New York at the following prices:
Spot Coffee Prices, New York, September 30, 1936
Brazil Grades U.S. cents per pound
R io........................................................ 8 to 8%
Santos ..................................................... 8 to 9%
Mild Grades
Maracaibo............................................... 7 to 12%
Colombian................................................ 10 to 11%
M exican washed.................................. ..11
Liberian............................... ............... 6
Genuine Java.................................... ...18
M ocha................................................13%
K enya................................................ ... 10 4
Ecuador......................................... ..... 7%
Salvador natural.................................... 9
Guatemala................................................ 9 to 11%
Haiti washed.................................... 9%

Thus, Haitian washed coffee, although a new-comer on the New York
market, and available only in limited quantities, already had attained a
respectable place among the "mild" coffee of other origins. But it is to be






HAIT:. REPORT :OFP.FISCAL REPRESENTATIVE


noted that other superior coffees such as the Colombian and Maracaibo
varieties, which already had established their reputation as being acceptable
'in the blends of branded coffees, were being quoted at prices a cent or two
higher than the best Haitian coffee. It is to be expected that when roasters
are assured of obtaining regularly the quantities they require, and can at
the same time be certain -of uniform cupping qualities, that properly pre-
pared Haitian coffee, both "natural" and washed, will take its place among
the high-premium coffees of other origins. The margin of perhaps twenty
or thirty per cent which it will then obtain over the prices for the present
ordinary hand-picked coffee should be more than enough to compensate
exporters, speculators and producers in Haiti for the relatively small extra
cost involved in turning out a superior product.

CHART No. 3
COFEE PRICES-FISCAL YEARS 1934-35 AND 1935-36
FrANC. PEL




.50 K/L-0
17o --------- -----------H--------------------

PB. ^-^"" S -- ^ --- ]* i HII'cpsfZ'(Hr u/les- -


HA / r/ 'Con0racf1 Z CO.f. 1ath)




oct Ncv Dec Jan r r" A o Ap y' Dec AIea- ,n e Mcr &/n Way .neJy Aug ob
1934 -/935 .. . 1935-/936

Briefly, the accomplishment of the program of developing a superior
coffee should give the local industry the following advantages:
a) The value of the annual crops will be greatly increased;
b) Exporters, speculators and producers will obtain greater profits;
c) Markets will be better diversified;
d) Protection will be afforded against the possible outbreak of war in
Europe, and further closure of European markets;
e) Protection will be afforded against the growing competition in Euro-
pean markets of colonial coffees;
f) The Haitian coffee trade will be better prepared to meet the chang-
ing standards of coffee buyers abroad. Coffee buyers in countries such as
Belgium are definitely turning from standards based on color and ap-
pearance to standards based on cupping qualities.
Exporters cannot remain complacent in the hope that Belgium and Scan-
dinavian countries will continue to absorb the'inferior coffee formerly sold
Sin France. Belgium is purchasing increasing quantities of colonial coffee.
Of 800,000 bags marketed yearly in Belgium, 300,000 bags are being sup-






HAITI: REPORT OP FISCAL REPRESENTATIVE.


plied by the Belgian Congo. Haitian coffee must compete against the
progressively better preparation of colonial coffee. Already, the Belgian
roasters, who heretofore have never bought coffee by quality in the cup,:
are changing their buying habits and are demanding high quality coffees
*with prices based on cupping merit. The Belgian roasters are giving a'
lighter roast to their blends, which brings out the superior qualities of the
better-prepared varieties, instead of the former high roast which obscured
the defects of inferior coffees.
It appears to be inevitable that sooner or later the coffee masters in
France and elsewhere in Europe will change their buying habits to conform
to the general trend. Emphasis will be placed on cupping qualities and
coffee will receive a lighter roast. The present plan of developing a superior
Haitian coffee is therefore a measure forced upon the domestic trade by
changing buying practices in Europe as well as in the United States.
Chart No. 3 shows that Haitian coffee sold in the Havre market during
the past year received a smaller premium over the Santos grade selected
as a base than it received during most of the previous year. To be sure, a
Premium of between forty and fifty francs was quoted during the first two
months of the year, but this was due to the lateness of the new crop in
reaching market and to a scarcity of supplies in Havre. Later in the year
the spread narrowed appreciably, and the spread remained very small
throughout the balance of the period.
Average prices paid for Haitian coffee during the past eight years were
as follows:
Fiscal years: Dollars per 50 kilos:
1935-36 .................................................... 8.13
1934-35.................................................... 10.03
1933-34 .................................................... 10.71
1932-33 .................................................... 8.68
1931-32....................................... ........... 11.35
1930-31................................................. 12.71
1929-30 ................................................... 15.16
1928-29 .................................................... 22.58

Most of the 1935-36 crop, as usual, was shipped to France, for the greater
part of the crop already had been sold before trade- relations with that
country were interrupted. Exports of coffee in 1935-36 by countries of
destination are shown below:
Country: Kilos: Per cent:
France .......................................... 24,252,854 67.2
Belgium ....................................... 5,645,061 15.7
Denmark ........................................ 3,369,914 9.3
United States.................................. 775,040 2.2
Germany ........................................ 767,080 2.1
Netherlands .................................. 341,712 0.9
Italy ............................................. 330,334 0.9
All others ...................................... 608,508 1.7
Total...................................... 36,090.503 100.0

The share taken by France increased from 64.0 per cent of the total in
1934-35. Both Belgium and Denmark took a smaller share of the total in






HAITI: -REPORT OF FISCAL REPRESENTATIVE E


1935-36 than in 1934-35, although quantities shipped to those countries
.increased. American purchases, as already remarked, increased from an
almost negligible amount in 1934-35, to a point where that country became
-the fourth largest buyer. Germany also greatly increased its purchases of
Haitian coffee.
The central part of Haiti (Port-au-Prince, Saint-Marc and Gonaives)
shipped 34.2 per cent of the total crop in 1935-36, as compared with 40.7
per cent in 1934-35. Thus, the good crop favored the other parts of the
Republic more than it did the regions served by those cities. In the North
hi1 particular ('Cap Haitien and Porttde-Paix)' coffee exports rose from
17.3 per cent of the total in 1934-35 to 21.3 per cent in 1935-36.

Cotton
Exports of cotton in 1935-36 totalled 5,754,155 kilos, or 423,396 kilos
less than in 1934-35 when cotton shipments reached 6,177,551 kilos. The
decline amounted to 6.85 per cent.
While cotton exports have declined in two successive years, the drop in
cotton production was not nearly so great as had been feared. Discovery
early in 1935 that the Mexican boll weevil had invaded cotton fields near
Jacmel and Gonaives gave rise to fears that production of Haiti's second
most important export crop would be seriously curtailed.
Two crops have been harvested since the boll weevil was first discovered
to be in Haiti. The last crop in size was less than nine per cent smaller
than the record crop of 1931-32 when cotton exports totalled 6,308,335
kilos. It is evident, therefore, that the boll weevil thus far has not had
the disastrous effects on cotton production which many first feared.
At the same time, the threat of the possible future effects of this pest on
cotton crops should not be minimized. Quarantine control and other
drastic regulatory measures can do little more than delay the spread of the
pest, which in the course of time will probably invade all of the cotton
growing regions of the Republic. The methodical burning of infected
plants and fallen bolls, the clearing of cotton fields, destruction of infected
wild cotton plants, and the liberal use of insecticides have been shown to
be of doubtful value. Apparently, only the systematic cultivation of new
varieties of cotton, grown to replace the existing varieties, will furnish any
effective remedy against the ravages of this insect pest. If the results of
the past two crop seasons may be taken as an indication, boll weevil damage
will be sufficiently retarded in its spread to permit the gradual replacement
.of native perennial cotton with annual "Upland" cotton or other varieties
found Suitable for cultivation under the conditions existing in Haiti. At
any event, it appears certain that some years must pass during which
annual production will not increase. To what extent production will be
affected is still problematical, but the results obtained during the last crop






HAITI: ,REPORT OF FISCAL REPRESENTATIVE


season in the production of cotton appear to justify the belief that prospects
now for the future of cotton production in Haiti are not so discouraging as
they were at this time last year.
SAbout forty per cent of the annual crop is grown in the Saint Marc
region. Although the boll weevil was not originally found in this region,
,production in 1935-36 dropped more than was expected. As against exports
from Saint Marc of 2,513,853 kilos in 1934-35, exports dropped to 2,306,272
kilos in 1935-36. Blossoming in the Artibonite region last year was not so
abundant as during the previous year. Also, cotton planting in some fields is
known to have been abandoned in favor of bananas. These factors probably
accounted for the reduction of cotton exports from Saint Marc in 1935-36.
At Jaomel, where the original boll weevil infestation was most severe,
cotton exports dropped from 238,074 kilos in 1934-35 to 119,007 kilos in
1935-36; but at Cayes exports increased from 288,720 kilos to 318,639 kilos.
Good results were obtained in the Port-au-Prince district, where exports
totalling 1,699,763 kilos in 1934-35 dropped off in 1935-36 by only 72,407
kilos. Also, cotton from the Miragoane region, formerly shipped through
Port-au-Prince, in 1935-36 was exported directly from Miragoine. Exports
o.f cotton from the hatter port totalled 165,602 kilos in 1935-36.
A small increase in average cotton prices also, made 1935-36 a better
cotton year than had been expected. Total exports were valued at Gdes.
7,223,409, as compared with Gdes. 7,666,639 in 1934-35, indicating a decline
in value of 5.78 per cent, whereas the decline in terms of quantity amounted
to 6.85 per cent.
The average price of cotton exports, according to customs records, has
been as follows during each of the past six years:
Fiscal years: Gourdes pei kilo:
1935-36........................................................ 1.26
1934-35 ........................................................ 1.24
1933-34 ........................................................ 1.29
1932-33 ........................................................ 0.79
1931-32....................................................... 0.64
1930-31 ........................................................ 1.02

From the same source, the records indicate that prices remained steady
* at about Gde. 1.25 per kilo during the months from February to May, 1936.
In June and July, when about ten per cent of the crop was shipped, average
Prices rose above Gde. 1.30 per kilo.
As usual, most of the 1935-36 cotton crop (64 per cent) was exported
during March and April.
The United Kingdom, as usual, purchased the greater part (50.8 per cent)
of the 1935-36 cotton crop, with France in second place (35.2 per cent).
The share taken by the United Kingdom declined from 55.5 per cent in
'1934-35, while that taken by France increased from 19.5 per cent. Germany,
which had been a heavy purchaser of Haitian cotton in 1934-35, decreased
its purchases from 851,097 kilos in that year to 267,575 kilos in 1935-36.






'HAITI:. REPORT: OF. FISCAL REPRESENTATIVE


Cottonseed cake exports, since the rise of the domestic lard-substitute
industry, have corresponded closely with yearly variations in cotton ex-
ports. All available supplies of cottonseed, resulting from the ginning of
the cotton crop, are utilized by the several plants established in Haiti which
manufacture lard-substitutes and other articles from this valuable by-pro-
duct of the cotton industry. The meal or compressed cake left after the
extraction of the oil is marketed chiefly in the United Kingdom.
Total exports of cottonseed meal and cake in 1935-36 amounted to
6,794,096 kilos valued at Gdes. 511,064, compared with 8,229,917 kilos
valued at Gdes. 549,652 in 1934-35. The decline in quantity amounted to
17.45 per cent, and in value to 7.02 per cent.

Sugar
Raw sugar exports in 1935-36 amounted to 34,133,635 kilos, exceeding
exports in 1934-35 by 1,576,177 kilos, or by 4.84 per cent.
As in the previous year, the local industry in 1935-36 broke all previous
records in the manufacture and export of this conmnodity. The production
of sugar has increased steadily since the present modern industry was
established nearly twenty years ago, and the rise in production for export
has been particularly rapid during the past eight years. Indications are that
production in the coming milling season will bring a further expansion in
sugar exports.
In value, according to customs records, the export production of raw
sugar totalled Gdes. 3,688,240 in 1935-36, as against Gdes. 3,461,284 in
1934-35. The increase in value amounted to Gdes. 226,956, or 6.15 per cent.
A slight rise in the world price of sugar during 1936 aided the Haitian
sugar industry. The average price received for raw sugar exports is calcu-
lated at Gde. 0.1081 per kilo for the fiscal year 1935-36, according to
customs reports, compared with Gde. 0.1063 in 1934-35. The corresponding
price in 1933-34 was Gde. 0.1082.
Although sugar prices have improved, the values obtained by producers
who are not protected in their foreign markets by special tariff preferences
or quotas still give rise to uneasiness as to the future outlook. Haiti is a
low-cost sugar producer. Unfortunately, its biggest competitors-the coun-
tries which supply the great sugar-consuming nations of the world with
their requirements-are included in the economic spheres of those countries,
and they obtain preferential treatment, to the detriment of the Haitian
industry.
Except for a small quota granted by the United States to Haiti, and
amounting at present to 461 tons per year, Haiti enjoys no tariff preferences
in the large sugar-consuming countries. The domestic output must be sold
at world prices, and those prices remain depressed because the large pro-
ducing countries like Cuba, and the sugarsproducing colonies of the British
Empire, are able to sell most of their production at prices which bring a
good profit, while their surplus production is dumped upon the world





HAITI: REPORT OF FISCAL REPRESENTATIVE


market for whatever it will bring. This continual process of loading up
the world market with inefficiently produced sugar and with sugar sold at
prices under the real cost of production makes it exceedingly difficult for
the Haitian sugar industry to obtain fair prices for its output, although
legitimately, in view of its low cost of production, it should have a fair
opportunity to supply sugar to that small part of the sugar-consuming
world not engaged in developing its own exclusive sources of sugar sup-
plies.
It makes a strange commentary on the effects of nationalism and of the
growth of economic sl'f-suffioiency to contemplate the fact that a country
like Haiti, capable of manufacturing sugar at perhaps a lower cost than
any other country of the Western Hemisphere, can sell its output with
difficulty, and then only at prices which give no adequate return on the
* capital invested; that supplies of one of the world's leading food com-
modities are obtained not from the countries best able to produce them, but
inefficiently and by forced production from countries where costs are
relatively high, and where inefficiently produced sugar is able to compete
only because of artificial protection of the industry.
Haiti can do no more than hope that eventually international limitation
of sugar production, or possibly the collapse of marginal producers of
sugar, will so affect the world price of that commodity as to make returns
adequate; but for the time being the only immediate prospect for improve-
ment could come from arranging special privileges or quotas in the bigger
consuming nations. Canada, which sells to Haiti much more than it buys,
presents such an opportunity. Preferences granted to "Empii-e" sugar now
make sales at favorable prices to Canada impossible. The American market
presents another opportunity. At present, only 461 tons of Haitian sugar
a year may be imported into the United States at preferential rates.
Here it should be recalled that although Haitian sugar is sold in the
London sugar market and deliveries are made in England, the sugar is not
actually consumed there. British sugar requirements are supplied from
Eanipire> sources. The sugar received from Haiti is simply refined in
England and is re-exported to other consulting countries unable to supply
their own requirements from domestic or from protected sources.
Haiti in 1935-36 sold 83.5 per cent of its raw sugar output to England.
The United States absorbed 4,804,419 kilos of drawback sugar or sugar
imported within the quota granted to Haiti, amounting to 14.1 per cent of
total raw sugar exports. The Virgin Islands and Curaao also purchased
some Haitian sugar.
The local industry, benefiting from the existing protective tariff against
imports of refined sugar, supplies a large part of the domestic refined
sugar needs. Small quantities of refined sugar also are exported each year.
Exports of refined sugar in 1935-36 totalled 669,363 kilos, valued at Gdes.
133,701, compared with 148,423 kilos valued at Gdes. 26,218 in 1934-35.





HAITI: REPORT OF FISCAL REPRESENTATIVE


More than half of the refined sugar exports were disposed of in the United
States, with the Virgin Islands and the Canal Zone taking most of the
remainder.
Large shipments of molasses in 1935-36 gave that by-product of the
sugar industry a position of some importance on the list of exports.
Shipments totalled 11,363,997 kilos, valued at Gdes. 570,451, compared
With 10,047,149 kilos valued at Gdes. 321,610 in 1934-35. The customs record
of molasses exports in terms of value indicates that a marked gain in the
Value of molasses took place during the past year. As usual, the molasses
exported was consigned to American buyers.

Sisal
Sisal exports increased in quantity by 13.68 per cent to a total of 5,664,554
kilos in 1935-36 when comparison is made with the previous year.
Even more striking than the gain in quantity exported was the sharp
rise in the price of sisal which carried total exports to a record value
of Gdes. 3,011,878 in 1935-36, as against Gdes. 2,029,404 in 1934-35. The
gain amounted to Gdes. 982,474, or 48.42 per cent.
Although exports of sisal in 1935-36 in quantity did not reach the total
of 6,041,051 kilos recorded in the peak year of 1933-34, the smaller quantity
exported was worth nearly Gdes. 500,000 more than the quantity exported
in the record year.
Average prices received for sisal advanced until in 1935-36 they were
higher than in 1930-31. For sake of comparison, average prices for sisal
F.O.B. Haitian ports in each of the past ten years are given below:
Fiscal Year: Gourde per Kilo: Fiscal Year: Gourde per Kilo:
1926-27.................... 0.750 1931-32.................... 0.314
1927-28.................... 0.750 1932-33.................... 0.305
1928-29................... 0.932 1933-34.................... 0.418
1929-30................... 0.622 1934-35................... 0.407
1930-31.................... 0.474 1935-36.................. 0.532

The cultivation of sisal has been one of the most successful agricultural
enterprises in Haiti. Production has expanded rapidly and without the
sometimes violent year-by-year fluctuations characteristic of Haiti's other
export crops. Prices declined during the depression years, but the decline
was not so severe as in the case of other leading export commodities
(excepting cotton), and recovery has been more rapid. Prices are now
only a little below the 1930 level.
A particularly desirable feature of the sisal industry is its relative free-
dom from seasonal variations in volume of exports. Some sisal is exported
in every month of the year, and in the peak months, as in March and
August of 1936, exports ordinarily amount only to about 20 per cent of the
year's export crop. The industry provides year-round employment in the
regions where sisal is grown, and ships carrying this commodity are
assured of cargoes throughout the year.







HAITI: REPORT Of FISCAL REPRESENTATIVE


Haiti has become an important factor in supplying the American market
with high grade sisal. Except for 12.6 per cent of the 1935-36 output
which was sold in Canada, the American market purchased all of the
quantity exported in that year. Ten per cent of the crop was purchased
by Canada in the preceding year.
The area planted to sisal is being extended, and exports undoubtedly will
continue to expand. The plantation development at Fort Libert6 in 1935-36
again produced more than 80 per cent of the year's output, but exports
from Saint Marc, amounting to 526,593 kilos in that year, were more than
double the quantity exported in 1933-34. Exports from Cap Haitien and
from Port-au-Prince, the only other sisal-growing districts, declined some-
what from the figures recorded in 1934-35.
Both at Fort Liber.t and at Saint Marc developmental work is now being
-undertaken which it is believed will result in a considerable increase in the
annual production of the fibre.

Bananas
Bananas remained in fifth place in 1935-36 among Haiti's principal export
products. While expansion of this new industry during 1935-36 was not
so great as had been expected, there was nevertheless a very substantial
gain in new plantings and an increase in the quantity and value of exports
of the fruit.
Shipments of bananas totalled 595,715 stem's in 1935-36, compared with
519,719 stems during the previous year, indicating an increase of 14.62 per
cent. In value, exports increased by Gdes. 8,551 to a total of Gdes. 771,807
in 1935-36, or by 1.12 per cent.
The heavy rains which did considerable damage to crops in the southern
peninsula in October, 1935, were particularly destructive of the small
banana plantations which in Haiti are often located on the sides of ravines
and close to the beds of mountain streams. Flooded sections in the South
ruined many of the banana areas from which it had been expected that
increasingly large supplies of the fruit would be obtained during the year.
Moreover, the destruction of other food crops placed a premium on bananas
as food for local consumption, and bananas in marketable quantity were
not available for export from the southern ports. Efforts by the fruit
company to obtain bananas in the South as late as October, 1936, were not
successful, and when one of the company's ships called at Cayes, very few
bananas were offered for export. Then too, for a period after the floods
of last year, roads in many parts of the country could not be used for the
Transportation of the fruit. Buying activities for most of the fiscal year
were therefore concentrated largely in the Port-de-Paix and Cap-Haitien
districts where banana cultivation for export had been in progress for
several years and where the fruit was considered more acceptable for export.
These adverse factors, resulted in an unexpectedly low yield in the first
half of the fiscal year. Exports picked up rapidly in the latter part of the








HAITI: REPORT OF FISCAL REPRESENTATIVE '45

year, however, and in September the fruit company found it necessary-to
add to the shipping facilities serving Haitian. ports in the banana trade
because of the increased quantities of the fruit offered for sale.
SIn each of the last three months of the fiscal year, banana shipments
exceeded 80,000 stems, as is indicated in the table below showing banana
exports by months:
Months: Stems:
October 1935.................................................... 42,046
November 1935.................................................... 36,986
December 1935 ............................................... 34,967
January 1936................................................... 39,703
February 1936 ................................................... 27,454
M arch 1936.................................................. 23,114
April 1936........ ........................................... 35,126
M ay 1936................................... .. ....... 41,987
June 1936............. .................................... 54,354
July 1936............................................... 80,015
August 1936................................................... 92,002
September 1936................................................... 88,861
Total.................................................. 595,715

The record of banana shipments by ports shows that more than 90 per
cent of the year's output was supplied by the Cap Haitien and Port-de-Paix
districts, with the latter district alone accounting for almost 56 per cent
of the year's total. Exports by ports were as follows:
Ports: Stems. Per cent:
Port-de-Paix ........................................ 332,345 55.8
Cap Haitien........................................ 206,329 34.7
Port-au-Prince ................................... 42,935 7.2
Others ............................................... 14,106 2.3
Total..................................... ............ 595,715 100.0

From the point of view of banana exports the year was disappointing, but
progress was made in extending and improving the cultivation of the fruit.
A far larger export production is in prospect in 1936-37.
Fruit grown in the new Artibonite plantation of the Standard Fruit arid
Steamship Company of Hayti did not begin to mature until after the close
of the fiscal year. It is estimated that the production of fruit from this
plantation alone in 1936-37 will reach 300,000 stems. Almost 900 acres of
land at present are under cultivation in this single plantation, besides rapid-
ly increasing areas of land being developed by private planters. At the
present writing, deliveries of the mature fruit from the company's Arti-
bonite plantation are being made, although it is necessary to transport the
fruit by rail to Port-au-Prince. Transportation of Artibonite bananas by
rail to Port-au-Prince will continue until a dock now under construction at
Saint Marc is completed by the company.
Other evidence of progress in the development of this new industry
during 1935-36 may be set forth as follows:
:The company is extending its Artibonite development by utilizing
water from the Riviere Bois irrigation system. A law to facilitate the


--- =






HAITI: REPORT OF FISCAL REPRESENTATIVE


use of water from this system was promulgated on September 7, 1936.
The government under this law guarantees users specified quantities of
water from the system in return for a water tax considerably higher than
the general tax paid by users of water from other government irrigation
systems. This new Artibonite development of the fruit company in less
than a year's time is expected to add 1.500 acres to the existing 1.000 acre
plantations.
Well-drilling by the company in the North was continued throughout
the year with satisfactory results. Three out of the five wells drilled have
been successful, and are serving to irrigate considerable areas of land
suitable for banana cultivation.
Near Cayes, a nursery extending over an area of about 158 acres was
nearing completion at the year-end. More than 100,000 new plants out of
an expected final total of about 175,000 had been set out by the fruit
company in this nursery. Adjacent is a tract of land covering 1,000 acres
which the fruit company plans to develop within less than a year into an
irrigated banana plantation having a yield as high as that of the original
Artibonite development.
The fruit company is arranging for the construction of banana sheds
.and a wharf at Cayes to handle the large quantity of fruit to be obtained
from this region.
Toward the end of the fiscal year, prices paid to producers at the com-
pany's buying stations increased appreciably, overcoming earlier dis-
satisfaction with the returns obtained by producers for their fruit. The
price paid by the company for fruit delivered at the company's shipping
sheds was Gdes. 2,00 per count bunch at the end of the year under report.
However, producers still have cause for complaining that transportation
costs to the shipping sheds and rejections of fruit by the company eat up
much of their returns. Interior buying dep6ts maintained by the company
at strategic points (and required under the company's contract), are badly
needed. In many areas, potentially suitable for bananas, nothing has been
done.
To aid small banana planters through the agency of the government
agricultural service, the company paid a total of Gdes. 50,000 during the
fiscal year 1935-36 to the government treasury. An additional sum of Gdes.
25,000 has been added to the arrount mentioned since the close of the fiscal
year. These funds are to be applied by the National Service of Agriculture
to the general program of extending banana cultivation. Disbursements are
accounted for in the same manner as ordinary government expenditures.
Several hundred individual cash advances to planters, secured by future
crops, are reported by the fruit company to have been made.

Other Exports
Cacao exports rose from 1,148,880 kilos in 1934-35 to 1,641,124 kilos in
1935-36, indicating a gain of 492,244 kilos, or 42.8 per cent. The average






HAITI: REPORT OF FISCAL REPRESENTATIVE


price received for Haitian cacao, however, fell off slightly, and in value a
gain of 40.7 per cent was registered. Cacao shipments were valued at Gdes.
567,026 in 1935-36, a gain of Gdes. 164,063 from the 1934-35 total.
Both in quantity and in value, cacao exports in 1935-36 were better than
in any year since 1929-30. Although the average price received in 1935-36
was somewhat less than during the previous year, there was noteworthy
improvement during the latter months of the year.
SThe average price received for dacao during the past seven years has
been as follows:
Fiscal years: Gde. per kilo:
1935-36............................................. .345
1934-35............................................. .351
1933-34................................................. 299
1932-33.................................................. 248
1931-32................................ ................... .320
1930-31................................ ....... .439
1929-30................................... ....... 868

Logwood prices rose slightly in 1935-36, and exports increased in quantity
by 28.68 per cent to a total of 12,220,125 kilos. Exports in 1935-36 were
valued at Gdes. 476.521, a gain of Gdes. 109,590 over the value of logwood
exports in 1934-35.
Although shipments of this formerly important item on the export list
have increased, annual exports in quantity are still less than half the
average for the five years ending in 1930-31; and in value, exports are less
than a fifth of the average annual value (Gdes. 2,600,025) received for
logwood exports during the same five years. Prices have failed to recover
appreciably, as is shown in the table below, giving average annual prices
per 100 kilos:
Fiscal years: Gdes. per 100 kilos: Fiscal years: Gds. per 100 ilos:
1935-36............. 3.90 19130-31................. 7.58
1934-35............. 3.86 1929-30 ................ 9.12
1933-34................ 4.68 1928-29................ 10.73
1932-33................. 4.63 1927-28................ 9.73
1931-32................ 6.76 1926-27.................. 9.22

Little can be expected in the way of recovery in the Haitian logwood
trade until demand for the dye extracted from the wood produces a rise in
prices. The chemical dye industry has not yet developed a synthetic dye
equal to the natural dye extracted from logwood.
Exports of goatskins were valued at Gdes. 413,441 in 1935-36, or Gdes.
12,829 less than the value-of 1934-35 shipments. In quantity, exports sini-
larly declined from 173,744 kilos in 1934-35 to 165,467 kilos in 1935-36.
Exports of Haitian rum also declined slightly in value, although in
quantity shipments increased from 23,127 liters in 1934-35 to 42,350 liters
in 1935-36. Direct sales of bottled rum to the American market have
dropped off. The increase in quantity of total exports is explained by the
fact that during 1935-36 high quality Haitian rum was exported in bulk
to the Virgin Islands to be blended with the local product of the islands,
and marketed abroad. This effort to find an outlet for the Haitian product






HAITI:' REPORT OF FISCAL REPRESENTATIVE


appears to give more hope of success than direct sales of rum in the limited
and highly competitive market in the United States for rum of the better
qualities. Development of the Virgin Islands outlet is hoped eventually to
provide the plant capacity and financial resources needed to carry on the
intensive sales promotion needed if exports of Haitian trade-marked rum
to the United States are to be increased.
Honey exports increased in value from Gdes. 124,915 in 1934-35 to Gdes.
152,695 in 1935-36. In quantity, exports increased from 406,376 kilos in
1934-35 or 477,200 kilos in 1935-36. The latter figure compares with
average yearly exports of 577,253 kilos in the five years ending in 1930-31.
Haitian logwood honey is of excellent quality if properly prepared.
Sweet oranges, dashewnuts, turtle shells and corn were the only other
exports of any importance in 1935-36. Shipments of oranges to various
countries were valued at Gdes. 35,645, but the yield to the shippers is
reported to have been so small that for the time being exports have been
abandoned. Exports of canned and fresh pineapples in 1935-36 were valued
at only Gdels. 1,707. It will be impossible to anticipate increasing exports
of fresh fruit until the granting of tariff concessions by the foreign con-
suming centers offers sufficient inducement to planters for a further
investment of capital. Experiments in shipping guano also were unsucces-
ful, and the enterprise Which began operations more than a year ago has
been abandoned.

Commercial Conventions
Trade between France and Haiti under the regime of trade concessions
by Haiti designed to favor the development of commercial relations be-
tween the two countries was interrupted indefinitely on March 18, 1936,
by notice that the French government had denounced, effective April 18,
1936, the commercial convention of April 12, 1930, and the rider, or
"avenant" dated March 10, 1934.
That the exchange of notes on July 5, 1935, ending a shorter interruption
which occurred in that year, was of a temporary nature was cleary indicated
in the last annual, report of this office.* It was not entirely unexpected,
therefore, that the country which continued to buy almost fifty per cent of
Haitian exports, and from which Haiti purchased little more than five per
cent of its imported supplies, chose to exercise in March of this year the
privilege which it had of denouncing the then existing commercial arrange-
ment on thirty days' notice.
There resulted an almost immediate drop in commercial exchanges be-
tween France and Haiti, since the minimum tariff rates previously accorded
by each country to the commerce of the other no longer were applicable.
These minimum rates favored Haitian purchases of French merchandise
particularly, since in the more important categories they were supplemented

*Annual Report of the Fiscal Representative, fscal year 1934-35, page 43.






HAITI: REPORT OF FISCAL REPRESENTATIVE


by, exclusive tariff reductions on trade-mtarked French specialties granted
to merchandise originating from no country other than France, whereas
France applied to Haitian coffee, and to other exports of Haitian origin, the
same duties levied on imports of the same commodities originating from
the leading foreign suppliers to France of those commodities.
The fundamentally cause of the decision of the French government was
undoubtedly the continued lack of balance between Haitian purchases of
French merchandise and French purchases of Haitian merchandise. The
immediate cause, however, was set forth in the "Moniteur Officiel du
Commerce et de l'Industrie" of the French government, in its issue of March
26, 1936, as follows:
The Haitian Government, by Executive Order.dated January 25, 1936, and publish-
ed January 27, has given more precisely the classification of merchandise the sale of
which at retail is exclusively reserved to persons of Haitian origin.
This decree makes it impossible for French retailers established in Haiti to exercise
their profession. A communique of the French Minister of Commerce indicates that
under the above conditions, the French Government finds itself obliged to denounce
the commercial agreement of April 12, 1930, and the rider to it oi March 10, 1934.
However well justified the immediate cause of this decision may have
been, the fact remains that sooner or later, under the policy of attempting
to balance exports and imports with each individual country, the same
decision in all probability would have been made by France. The lack of
equilibrium in merchandise exchanges between the two countries, a con-
dition which had existed for many years, could no longer be ignored by a
country faced with the serious monetary and economic problems which at
that time had to be met by the French government.
UIMess both countries are willing to admit the desirability of triangular
trade between nations, the only alternative is for each nation to restrict its
yearly sales to the other to a value approximating the Valte of the goods
which Haiti is capable of purchasing from France. Unfortunately for
Haiti, the spread of the concept of economic self-sufficiency abroad has
made doubtful the possibility of the larger European nations recognizing,
in their trade relations with Haiti, the force behind the argument that a
return to triangular trade will bring about more quickly and in greater
measure the general increase in commercial exchanges which those nations
at present seek to achieve under exclusive bi-lateral agreements.
It has been recognized as being almost axiomatic that when interna-
tional trade relations are-founded on the principle that the values of mer-
chandise exchanged must be nearly equal, as between two countries, that
the general level of trade between those countries will drop to the general
level, represented by the trade of the country which sells the least amount
of goods to the other country.
This depressing effect of exclusive bi-lateralism on the general volume
of international commerce can be no better demonstrated than in the
present instance. Haiti normally buys from France goods valued at be-
tween two and three million gourdes. Past experience shows that regard-






HAITI: REPORT OF FISCAL REPRESENTATIVE


less of trade concessions or forced purchases (as in the case of Haitian
purchases of jute bags from France), Haiti is unable to buy French export
goods--most typical of which are the luxury specialities for which France
is famous and for which the Haitian demand is necessariJy very limited
-to a value which will bring total yearly exports to a figure above
the level mentioned. France, on the other hand, needs and can easily buy,
Haitian coffee valued at six -or seven times the value of all the merchan-
dise Haiti can possibly buy from France. Any attempt to balance merchan-
dise exchanges obviously would simply reduce the total value of exports
and imports to around the six million gourdes level. One party would gain
practically nothing; and the other party would be faced with the serious
problem of selling in other markets merchandise (coffee) valued at some
fifteen million gourdes annually. The only recourse would be to direct
unsold merchandise to new and uttried markets where it is perhaps not yet
needed, and where, if it can be sold at all, there may be a sacrifice as to the
value received over the period of readjustement needed to secure entry into
the new market. Fortunately, after denunciation of the treaty with France.
as explained above, Haiti was able quickly to adapt its coffee-selling
practices to the new conditions, and there was little, or no, actual loss.
Small as the Haitian share of world trade is, this sequence results in a
net lowering of the level of world commerce and a depressing force on
the price of goods entering into international commerce.
The 21 States of the Pan American Union represented at the Montevideo
conference of 1933 sought to combat these influences by accepting the
principle that trade agreements should not be exclusive; that any new
trade agreements entered into by nations adhering to the principle accepted ,
at the conference-and Haiti was one of those nations-should incorporate
the unconditional most-favored-nation clause.
The major European powers, however, have in large measure embarked
on the course of achieving economic self-sufficiency and protecting their
respective currencies. But today there are everywhere indications that even I
the European countries, preoccupied as they are by internal troubles and by
the threat of a European war, are coming to accept more and more the idea
of a general plan to lower trade barriers and bring about a general increase
in world commerce.
Trade relations between Haiti and France were broken at a time when {
European difficulties had reached a crisis; when the "gold bloc" was
struggling hard to maintain the gold standard; when no one knew when
or how the French franc would finally succumb, or how quickly France
could adjust herself to a revalued currency. Since then, the anticipated fall
of the franc has occurred. France has successfully weathered a financial
storm; the franc at last, it is hoped, has found its natural level; and that
country together with England and the United States have agreed to work
together under a tripartite agreement in maintaining a degree of stability
between their respective currencies.






HAITI: REPORT OF FISCAL REPRESENTATIVE


1 Thus, the outlook today is far different from what it was in March,
t 1936, when France felt obliged to break off trade relations which Haiti. A
: cheaper franc is stimulating French exports. With some stability at last
I achieved between the major currencies, and with the threat of a sudden
Fall of the franc removed, the element of chance entering into international
, trade transactions has much less force. France can now afford, as it could
* not six months ago, to take a broader view in shaping its policies respecting
- international trade relationships.
SThere is good reason to believe, therefore, that the two countries may
I agaih soon find a common basis for agreement respecting trade between
them. Certainly, the idea of lowering trade barriers is gaining strength
Sin France as it is in Latin-America; and with acceptance of that principle
there may follow a return to the concept of triangular trade under which
France and Haiti for many years in the past worked together harmoniously
Sand to their mutual advantage.
S Although trade relations between Haiti and France are still unsettled,
progress was made during the year under review in improving and con-
solidlating trade relations between Haiti and other foreign countries.
By an exchange of notes dated April 6, 1936, and April 15, 1936, Haiti
and Canada agreed to extend until April 15, 1937, the modus-vivendi by
which each country had agreed to grant unconditional most-favored-nation
privileges to the commerce of the other. The new exchange of notes
contemplates the eventual signature of a treaty regulating commerce be-
tw.eet the two countries.
Belgium also, on July 9, 1936, signed a temporary commercial agreement
by which the commerce of each country receives most-favored-nation
Treatment. This agreement is to remain in force until such time as a
definitive commercial treaty is signed; or it may be denounced by either
party on three months' notice.
Under these agreements, imports from both Belgium and Canada will
receive the benefit of the Haitian minimum tariff. Haiti in return has
assurance that coffee sold in Belgium will not be subject to less favorable
treatment than that accorded to coffee of any other origin.
The agreement with Belgium has been of great aid to Haitian commerce,
for Belgium has purchased much of the coffee excluded from the Havre
market. In recent months Belgium in turn has enjoyed a greater share of
the Haitian import trade.
Canada, on the other hand, still buys little from Haiti, although Haiti
furnishes a good market to Canada for fish, flour, potatoes, butter, canned
meats, paint, paper, and rubber tires. It is to be hoped that the two countries
nay soon sign the definitive agreement already contemplated, and that it
will permit Haiti to sell advantageously in Canada some of the commodities
at present excluded because of "Empire" preferences. Sugar is a leading
product of Haiti which now is restricted by Canada.. Negotiations toward






HAITI! REPORT OF FISCAL REPRESENTATIVE


a definitive treaty should examine into the possibilities of according to Haiti
privileges commensurate with the trade advantages which Canadian
commerce already receives in Haiti.

Tariff Modifications
There were comparatively few legislative or executive measures during
the fiscal year 1935-36 affecting the tariff or its application.
By an Executive Order dated May 7, 1936, imported merchandise, with
certain exceptions, is required to bear directly on the article itself the nime
of the country of origin. Improperly marked merchandise is made dutiable
under the maximum tariff, which is double the amount of the minimum
tariff rates. This requirement, similar to regulations imposed' by other
countries, provides additional customs control over the origin of imports,
and gives merchants and consumers alike added guarantee as to the true
origin of foreign merchandise purchased by them.
A law published May 25, 1936, clarified the provisions of the law of
September 4, 1905, relative to contraband, and modified certain other
provisions of the law concerning manifests and bills of lading, relieving
ships coming from abroad from certain formalities recognized as being of
no practical value.
By a law published October 21, 1935, the import duty on gasoline was
increased from Gde. 0.50 per gallon to Gde. 0.60 per gallon. At the same
time, an internal revenue tax of Gde. 0.10 per gallon (the amount of the
increase in the duty) was made applicable to gasoline then in stock. This
measure was for the purpose of obtaining new revenues.
In the hope of favoring the exportation of guano, the duty on guano
exports was reduced to Gdes. 7.50 per ton by an executive order published
October 10, 1936. Although large deposits of commercially marketable
guano exist in Haiti, recent efforts to exploit the deposits have not been
successful.
By an executive order published January 16, 1936, the export duties on
logwood and logwood roots were suspended for an additional year.

Customs Administration
The general organization of the customs service remained throughout
the fiscal year without change except for minor shifts in the personnel.
Haitian directors of customs, in accordance with the provisions of the
Agreement of August 7, 1933, remained in control of the collection of
6ustomns revenues at the various custom houses with only customs audit,
inspection and central administrative supervision exercised by the Office of
the Fiscal Representative at Port-au-Prince and by the three resident
inspectors located at Cap-Haitien, Saint Marc and Cayes.
Another year of successful operation under the administrative changes
brought about by the Agreement of August 7, 1933, adds to the satisfaction






HAITI':-REPORT OF FISCAL REPRESENTATIVE


which' this office has had occasion to express before as to the manner in.
which the Haitian members of the customs staff have taken over from their
American predecessors the authority and responsibility of applying the
customs laws and regulations at the respective custom houses. To be sure,
regretable irregularities have been discovered by the inspectors, but prompt
and effective measures have been taken to prevent loss to the treasury. It is
gratifying to be able to report that the customs auditing function retained
by this office under the Agreement has revealed no increase in the routine
corrections of errors and omissions disclosed by the usual thorough exami-
nation given to customs documents by the customs auditing service.
It is the belief of this office that the success met in this respect is due
to the establishment early in the administration of the customs service of
a system of employment and of promotion based so far as possible on,
the merit system. Due recognition in the form pf promotions and pay
increases have been accorded impartially to officials and minor employees
alike whenever ability and loyalty have been demonstrated; and this system,
has been in effect sufficiently long to give to all members of the organi-
zation full realization of the fact that hard work and the wii to improve
eventually will receive recognition so far as the sums available for customs
activities permit.
To be sure, low revenues and the pressing need for economies in the
mid-depression years in many aases precluded deserved promotions; and
members of the customs personnel even were charged with additional duties
at a time when general salary reductions had tb be enforced. Employees
and officials alike in the past have mide such sacrifices willingly. It is the
earnest opinion of this. office that the morale of the customs personnel now
is stronger than ever before, and that as a loyal, efficient organization it
would be difficult to find its'superior in any government or private organi-
zation in Haiti.
This office has long advocated the extension of the merit system to other
government services, and particularly to those services charged in any way
with the collection of revenues or the disbursement of government funds.
Honest, efficient administration cannot be obtained if favoritism and politi-
cal expediency are allowed to have any part in organizations charged with
handling government funds.
The auditing of customs bills and of documents covering imports and
exports, together with the assembling of customs statistics, were carried
out as usual during the past year by a staff of about thirty Haitian officials
and employees under the direction of Mr. T. J. Grant. The customs auditing
function has proved its value after many years of experience.
The administrative inspection of customs activities is as essential as the
central auditing function, but this important function has gone through years
of experimentation without as yet becoming definitely fixed. The inspecting
function not only involves the -routine physical examination of customs
records; and inquiries into administrative procedure at the various custom






HAITI: REPORT OF FISCAL REPRESENTATIVE


houses, but it serves to coordinate customs activities and assure uniformity
in the application of the customs laws and regulations. The changes
required by the Agreement of August 7, 1933, interrupted a period when
periodical inspections at custom houses were carried out by traveling
inspectors, and when, in the more important customs districts, collectors
in charge reported periodically at the central office for instructions and
for decisions on whatever matters of importance arose. The administrative
changes which went Into effect on January 1, 1934, necessitated a consider-
able reduction in the staff able to devote all or part of its time to in-
spectioss. To use effectively the services of officials available for this duty,
the inspecting function to some extent was decentralized and resident in-
spectors at Cap Haitidn, Saint Marc and Cayes were given charge of the
inspection work covering all customs activities in those districts, with a
fourth district (Port-au-Prince, Jacmel, Petit GoAve, Miragokne, Betladere
and Glore) covered by inspectors sent out from Port-au-Prince.
This system has worked reasonably well in practice, but the limited
personnel available for this work, together with the need for combining
customs inspection with the inspecting work carried out by the Internal
Revenue Inspection Service gives little opportunity for achieving the
degree of coordination believed desirable. It is therefore the recommen-
dation of this office that whenever any general change is contemplated in
the organization of the customs service means will be fonutd to give greater
emphasis than is possible at present to the essential function of making
periodical inspections in all customs districts.

Internal Revenue Inspection Service
The activities during the fiscal year 1935-36 of this division of the office
of the Fiscal Representative are fully described in the Report of the In-
pector General annexed to this report.
. There were no changes in that service of an administrative nature worthy
of conmient. Its activities were carried out regularly as an impartial check
on the collection of internal revenues and the application of the internal
tax laws. The administration of internal revenues since January 1, 1934,
has been entirely separate from the other activities of the Office of The
Fiscal Representative.
There has been a strong tendency in modifying the internal revenue taxes
to favor those taxes, such as the taxes on land, soap, vegetable oil, etc.,
(and previously the gasoline tax) which require a minimum amount of
administrative effort in their collection. On the other hand, the potentially,
remunerative taxes on alcohol and tobacco, which are difficult to collect
unless special effort is directed toward their enforcement, have been receiv-
ing less attention, with a consequent diminishing effect on their yields.
This transition, in that emphasis in moving toward that group of taxes
requiring less administrative effort is making less important the activities






HAITI: REPORT OF FISCAL REPRESENTATIVE


of the Internal Revenue Inspection Service. It will therefore be noted in
the report of the Director General, that there has been noticeable re-
trenchment in the work of his department during the past year.

Government Revepues
Total Revenues
Government receipts from ai4l sources totalled Gdes. 34,598,364.33 during
the fiscal year 1935-36, exceeding the corresponding total for 1934-35 by
Gdes. 4,506,723.37, or by 14.98 per cent.
Budget estimates had predicted revenues totalling Gdes 34,250,000.
Actual receipts, therefore, exceeded estimates by Gdes. 348,364.33.

CART No. 4
TOTAL REVENUE RECEIPTS OF HAITI AND EXPENDITURES FROM REVENUES
FISCAL YEARS 1916-17 TO 1935-36
M/LL/ON5 OF GO/URDEL .
60-
PEVENUE5
50-- -
EXPEND/TUeES









06-/77n-/816/99---20-2- z-Z-Z- Z-ZZ44-- 5 5-26--Z7-Z---Z-SZ330-3/l-3--2 ..35536
10--~~






S4/ePL-U. :5 DEF/C/T

Except in the previous year of a short coffee crop, and the two mid-
depression fiscal years (1930 to 1932), annual revenues have consistently,
reached a figure of Gdes. 34,000,000, or better, in a period extending back
for twelve years. Past experience shows thatt annual receipts of Gdes.
34,000,000 are sufficient to provide current revenues with which to meet
all ordinary government operating expenses, provide for full service of the
Public debt, and leave a small balance for the usual unavoidable contingen-
cies which sometimes *require expenditures in excess of the ordinary
budgeted allocations.
Essentially, therefore, the past year from a fiscal standpoint brought
nortnal revenues to the government treasury, and a return to the general
level of revenues interrupted by the poor coffee crop of 1934-35. The







i56 HAITI: REPORT OF FISCAL REPRESENTATIVE

revenue curve shown in Chart No. 4 has nearly reached the curve of total
expenditures, even though expenditures in both of the last two years have
included items, such as Gdes. 5,000,000 expended in 1934-35 to purchase
the capital stock of the Banque Nationale de la R6publique d'Haiti, which
should not be considered as ordinary operating charges.
Government revenues are classified in three main groups: (1) customs
revenues; (2) internal revenues; and (3) miscellaneous receipts. The gain
in customs revenues in 1935-36 accounted for most of the increase in total
revenues when comparison is made with collections in the previous year.
Internal revenues also improved, but miscellaneous receipts declined, due
mostly to the sale of treasury investments in bonds of the Republic, and
the consequent decline in investment income.
The relative importance of the main categories of government revenues
is shown in the table below:
Sources: Gourdes Per cent:
Customs:
Imports ................................................ 17,470,978 61 50.5
Exports ................................................ 11,327,788.71 32.7
Miscellaneous customs............................ 144,598.23 0.4
Internal Revenues.......................................... 4,695,426.40 13.6
Miscellaneous government receipts.................. 692,641.83 2.0
Receipts from Communes................................ 266,930.55 0.8
Total revenues, 1935-36........................ 34,598,364.33 100.0

The rise in exports placed the yield of the export taxes in a position of
greater importance in 1935-36. Compared with 32.7 per cent of total
revenues indicated above, the export revenues in the prior year amount(
orily to 21.2 per cent, while import revenues in 1935-36 declined to 50.5 pec
cent from 59.1 per cent of the total in 1934-35.

Customs Receipts
Total receipts from customs sources amounted to Gdes. 28,943,365.55 in
1935-36. This figure compares with Gdes. 24,314,958.63 in 1934-35, and
Gdes. 30,433,182.65 in 1933-34. Customs receipts totalled Gdes. 31,266,223.58
in 1932-33 when a bumper coffee crop produced an exceptionally high yield
in revenues derived from the duties on exports.
Compared with the 1934-35 total, customs revenues in 1935-36 increased
by Gdes. 4,628,406.92, or by 19.02 per cent. As in the case of total revenues,
customs receipts did not reach the total figure of the two years previous
to 1934-35, although they exceeded by several million gourdes the totals
for customs receipts reported in each of the mid-depression years (1930-31
and 1931-32).
Of total revenues derived from customs sources in 1935-36, the import
tariff produced 60.36 per cent, the export duties 39.14 per cent, and mis'
cellaneous customs collections (storage charges, fines, penalties, etc.) 0.50
per cent. The same sources during the previous year furnished 73.06 per
cent, 26.27 per cent and 0.67 per cent of total customs receipts, respectively.






HAITJ: REPORT OF,FISCAL REPRESENTATIVE


- As a ,result of lessened activity in the import trade, the yield of
the import tariff declined from Gdes. 17,764,303.92 in 1934-35 to Gdes.
17,470,978.61 in 1935-36. The drop in revenues from this source amounted
to Gdes. 293,325.31, or 1.7 per cent. The drop in import revenues was not
so marked as the fall in value of the import trade (7.87 per cent) because
tariff modifications put into effect April 1, 1935, (cotton textile's, cement,
soap, etc.) together with the new tax on gasoline and the effects of the new
maximum tariff on certain imports combined to increase the tax burden
of the import tariff.
The revenue yield of the import trade under the principal categories of
imported merchandise in each of the past two years presents an interesting
comparison:
1935-36 1934-35
Gdes. (000's) Gdes. (000's)
Cotton goods ........................................................... 5,382 5,627
Flour ........................................................................ 3,128 2,520
Other foodstuffs and beverages.............................. 2,070 2,078
Gasoline and kerosene.......................................... 1,304 1,430
Iron and steel products, machinery and apparatus.... 903 1,134
Chemical and pharmaceutical products................... 835 1,177
Wool, linen, silk goods, jute bags, etc....................... 686 786
Cigarettes and tobacco............................................ 669 422
Soap ................................................. ..... ..... 628 535
Leather, shoes, and leather goods.......................... 441 392
Cement, lumber, etc................................................... 331 379
Paper, etc.............................................. ............. 232 219
Rubber goods ..................................................... 218 206
Autos and trucks...................................................... 171 174
Earthenware, etc ..................................... ............... 167 260
Glassware ................................................................ 112 111
All others................................................................. 194 314


Total ................................................................ 17,471


17,764


Flour, tobacco, soap, leather goods, paper and rubber goods produced
more revenues in 1935-36 than in 1934-35. The sharp gain in income
derived from the duty on flour is particularly striking. It was due not only
to increased quantities of flour imported but to the fixed duty of Gde. 0.25
per net kilo which replaced the former sliding scale based on wheat prices
in effect until April 1, 1935. During the first six months of 1934-35 the
duty under the sliding scale has varied from Gde. 0.20 to Gde. 0.21 per net
kilo. The present fixed duty of Gde. 0.25 per net kilo is therefore pro-
ductive of more revenues.
Under the tobacco classification revenues increased largely because of
the heavier imports of cut tobacco used for the manufacture in Haiti of
cigarettes made of foreign prepared tobacco. This branch of the domestic
industry, according to the customs figures, has increased its production
considerably during the past two years.
Although cotton goods imports dropped off sharply (10.17 per cent) in
1935-36, the revenues derived from the duties on cotton goods declined
only 4.4 per cent. The relatively small,decline was due to higher duties on,
certain commrnon grades of piece goods in effect sinxe April 1, 1935.






HAITI: REPORT OF FISCAL REPRESENTATIVE


SThe principal decline in import revenues, by commodity groups, was
recorded in the case of the chemical and phanrmacqutical category. This
group includes vegetable oils and other materials used in making soap,
imports of which fell off in 1935-36. Iron and steel products, including
machinery, also were less productive of revenues in 1935-36, and the kero-
sene and gasoline group recorded similar results due to lessened imports of
gasoline in 1935-36.
The export duties in 1935-36 produced revenues totalling Gdes. 11,327,-
788.71, exceeding the previous year's total of Gdes. 6,387,351.37 by Gdes.
4,940,437.34, or by 77.35 per cent.
Compared with export revenues in previous year, the 1935-36 total
exceeded the corresponding figure recorded in each of the last ten years
with the exception of 1932-33 (Gdes. 13,226,893.15), 1929-30 (Gdes. 11,-
952,580.99), and 1927-28 (Gdes. 14,040,033.56). From the standpoint of
export revenues, therefore, the total collected in 1935-36 compared favor-
ably with totals recorded in the pre-depression years.
By sources, export revenues were as follows i'n 1935-36 and in 1934-35:
1935-36 1934-35
Gourdes Gourdes
Coffee ..................................... 10,935,486 5,766,061
Cotton ................................. ...... 122,723 131,787
Sisal ........................ ......... .. 81,019 71,209
Bananas ....................................... 40,827 28,240
Miscellaneous ............................ 147,734 390,054
Total................................ .. 11,327,789 6,387,351

Receipts in the "miscellaneous" classification were more than cut in half
due to the suspension on May 28, 1935 (and until May 30, 1938) of the
export duties on raw and refined sugar, molasses, and cane syrup. The
former duties on sugar had yielded Gdes. 152,630 during the first eight
months of 1934-35 prior to promulgation, of the executive order by which
the duties were suspended,
The yield of the duties on bananas and sisal reflect the gain in exports
of these commodities; and, of course, receipts from the duty on coffee
exports were nearly doubled because of the good crop of 1935-36.
It is interesting to note that while total government revenues increased
by Gdes. 4,506,723.37 in 1935-36, when comparison is made with receipts
in 1934-35, the increase in the size of the coffee crop alone produced an
increased revenue yield of Gdes. 5,169,425. Coffee alone, therefore, account-
ed directly for improved ,revenue in 1935-36, and there was a net decline in
the income derived from aN other sources.
As often has 'been' pointed out, the dominant position of the export duties
in the fiscal ;structure produces widely fluctuating year-by-year revenues,
with variations depending directly on the size of the annual coffee crop.
This feature obviously is undesirable; but until new revenues from other
sources, and particularly from internal taxes, are created, there is no
alternative other than to adjust government expenditures annually to







HAITI: REPORT OF FISCAL REPRESENTATIVE


variations in government income -or better still, to build up treasury
reserves in years of good crops to provide a cushion in years of declining
receipts. Unfortunately, the size of the annual coffee crop cannot be predict-
ed satisfactorily in advance, and fiscal administration in' Haiti consequently
resolves itself largely into a continual process of adjusting expenditures
to receipts which not only fluctuate widely from year to year, but which
exhibit wide seasonal variations corresponding with the periodical swings
of coffee exports.
Measures to correct this situation by placing greater emphasis on internal
sources of revenues, (especially on alcohol and tobacco taxation) have met
with success in the past, but unfortunately the progress made in' developing
more stable sources of income was largely nullified five years ago by the
abandonment of alcohol and tobacco as major sources of revenue. Since
then, new taxes on lard substitutes, vegetable oil, soap and salt have recover-
ed a small part of the loss in alcohol and tobacco ,revenues, but internal
sources of revenue as a whole, unlike customs receipts, have not regained
the ground lost during the depression. Customs revenues in 1935-36 nearly
reached the 1929-30 level, but internal revenues in 1935-36 were only 71
per cent of the total of Gdes. 6,620,164.04 recovered from internal taxes in
1929-30, despite the enactment of new tax legislation in the meantime
establishing a number of new sources of internal revenue. It is dear,
therefore, that the fiscal policy of the government should emphasize a return
to the excise taxes as a major source of government revenues.

Internal Revenue Receipts
Receipts of internal revenues from all sources totalled Gdes. 4,695,426.40
in 1935-36, compared with Gdes. 4,519,504.32 in 1934-35, registering a gain
of Gdes. 175,922.08, or 3.89 per cent. Both the excise and other internal taxes
as a group gave a higher yield in 1935-36 than in the preceding fiscal period.
Internal .revenue collections have varied little during the past five years.
In part this relative stability is due to the fact that revenues from internal
sources characteristically are not subject to the wide fluctuations of revenues
derived directly from imports and exports. Also, the total tax income has
been held at about the same level by new taxes which largely have
compensated for revenue losses in a number of important tax categories,
such as the alcohol and tobacco taxes, losses which may be ascribed to
changes in tax legislation iRather than to economic forces.
The table below shows total internal revenue collections in each of the
five past years, together with the relation between excise collections and
"other" internal revenues:
Fiscal Years: Excise: Other Internal: Total:
Gourdes Gourdes Gourdes
1931-32...................... 1,178,076.27 2,752,830.02 3,930,906.29
1932-33...................... 1,844,434.20 3,146,887.99 4,991,322.19
1933-34...................... 1,804,538.79 3,244,363.39 5,048,902.18
1934-35...................... 1,379,168.61 3,140,335.71 4,519,504.32
1935-36...................... 1,413,572.56 3,281,853.84 4,695,426.40






HAITI: REPORT OF FISCAL REPRESENTATIVE


'It should be explained that excise collections comprise the direct taxes
applied to alcohol and tobacco products, gasoline, vegetable oils, lard substi-
tutes, soap, and salt. All other internal tax receipts are included in the
f'other internal" category. '
': Since January. 1, 1934, the administration and collection of internal
revenues has been carried on by an exclusively Haitian organization in
accollaince'with the change in administration required by the Agreement
of August 7, 1933. The Office of the Fiscal Representative, however,
administers an Internal Revenue Inspection Service charged with inspecting
tax collections. The latter service is independent of the Internal Revenue
Service.
- iInassmuch as the actual collection and administration of the taxes is no
longer within the scope of the activities of the Office of the Fiscal Repre-
sentative, this report, so far as concerns the internal revenues, is limited
chiefly to recording the results obtained in the collection of the taxes.
Details concerning the administration of the tax laws will be found in the
regular reports of the Internal Revenue Service; and the activities of the
Inspection Service are set forth in the annual report of that service annexed
to this report.
* Under the Agreement of August 7, 1933, the recording of government
receipts is still a function of this organization. In view .of the respon-
sibilities of this Office in connection with the inspection of internal revenues
and the maintenance of a balanced budget, a brief analysis of internal
revenue collections is appropriate in this report.
Internal revenue collections are accounted for under some forty different
tax classifications. Grouping the less important of these classifications
together, collections of internal revenues were as follows in each of the
last two fiscal years:
1934-35 1935-36 Increase
xci: Gourd Gourdes Gourdes ourdes'
Alcohol, wines, etc.............. 496,325.93 367,174.56 129,151.37*
Tobacco .............................. 468,170.70 390,257.82 77,912.88*
Other excise........................ 414,671.98 656,140.18 241,468.20
Stamp Receipts............................. 679,984.87 803,737.86 123,752.99
Telegraph and telephone................ 501,068.73 500,998.17 70.56*
Income tax.................................. 525,134.54 464,747.48 60,387.06*
Occupational tax on foreigners.... 291,534.78 347,564.57 56,029.79
Public land rentals...................... 345,618.91 332,881.27 12,737.64*
Documentary recording fees.......... 311,725.01 316,118.69 4,393.68
Water service fees........................ 202,565.85 262,559.05 59,993.20
Consular fees.................................. 83,628.05 71,627.35 12,000.70*
Vital statistics fees...................... 60,019.51 64,353.25 4,333.74
Other internal .............................. 139,055.46 117,266.15 21,789.31*
4,519,504.32 4,695,426.40 175,922.08
(Net increase: Gdes. 175,922.08)
It will be noticed that except for a substantial drop in the yield of the
alcohol and tobacco taxes, together with decreased returns from the income
tax, the movement of tax receipts in 1935-36 was generally upward.
*Decrease.






HAITI:.-REPORT OF FISCAL REPRESENTATIVE


Revenues from alcohol have been progressively less since. the basis of,,
taxation was changed in 1931 from taxes applied to the actual volume of
alcohol produced to taxes calculated on the capacity of the stills to produce.
The latter method of applying the taxes has not been successful. In the
absence of remedial legislation, the alcohol tax situation has grown steadily
worse.
The difficulty, frequently discussed in the Annual Reports of this office,
is the insistence of a politically articulate group of small distillers who,
nevertheless, have neither capital nor scientific equipment,, that the govern-
ment should provide legislation assuring them a profit equal to, or surpass-
ing, that supposed to be obtained from well- equipped and scientifically.
controlled distilleries. Every possible suggestion to provide this group
with the profits, which their own incapacity definitely renders impossible,.
has been made. Many of these suggestions have been carried out. The
inevitable and inescapable result has been the burdening and hindering of.
the more efficient distillers, the loss of reasonable and necessary revenues
to the State, and the continued demonstration that an inefficient plant can-.
not yield a profitable return. This is the situation which basically is pre-
sented as an excuse for the non-payment of taxes'by a large group of these
small and, individually, relatively unimportant distilleries. Even with the
non-payment of taxes, however, they have not made money. Certainly, it
is unfair to penalize efficiency in the well- equipped distilleries by tolerating.
bootleg competition; and in those parts of the country where such compe-
tition exists, it is unfair to compel the cane-growers to receive low prices
for their cane simply because the 'law-abiding, but unfortunately under,
capitalized, distillers to whom they ordinarily sell their cane cannot operate,
even casually, unless they force down the prices for their raw materials.
The only just and equitable legislation controlling alcohol is that based
upon volume produced, rather than upon capacity to produce. Such legis-
lation must be impartially enforced. Revenue then will be provided to the
State, the growers of cane will be encouraged, and the distillers who are
capable of efficient management of their plants profit. The incapable and
the inefficient will go out of this business. Nor should this be regarded as
a serious calamity, for the continued existence of a group which can never'
hope to make a profitable business from the industry in which it is engaged
can only serve to maintain disappointment and dissatisfaction. The sooner
this type of distiller engages in another business, as for instance, bananas,
the sooner he will better serve his family and his country. A new alcohol
law is urgently needed to prevent a complete disorganization in this
industry, such as we have seen already in the prepared tobacco industry,
where not only the factories but the Haitian tobacco growers have been,
ruined by defective legislation.
In the last six years, revenues from domestic alcohol dropped from well
Over Gdes. 1,400,000 annually to barely Gdes. 400,000 in 1935-36. The to-:






HAITI: REPORT OF FISCAL REPRESENTATIVE


bacco industry is in much the same situation. A substantial further decline
in receipts from this source occurred in 1935-36, as is shown in the table.
In an endeavor to supply the deficiency in alcohol and tobacco revenues
new excise taxes have been provided from time to time; first, by
taxes on ,salt and gasoline (the latter being combined later with the import
duty on gasoline); and then by taxes on land substitutes, vegetable oil,
soap and matches. Revision of the stamp taxes also helped supply the
deficiency in excise revenues, and last year a tax was placed on radio tubes.
The latter was of little help, having yielded only Gdes. 6,726.40.
The net effect has been to maintain internal revenue collections at about
the same level during the past four years. Unless the excise legislation is
corrected, or unless new taxes are devised, internal revenues may be expect-
ed to show little change in the future.
Changes in yields under the individual items in the table above require
little comment. Better administration and law enforcement in the case of
documentary stamps and sales of stamped paper contributed to higher tax
yields under these categories. The same is true of water service fees.
Declines in income tax receipts reflect the changes in retail trade brought
about by the new legislation at the beginning of the fiscal year.
The Internal Revenue Administration deserves much credit for its success
in collecting a multitude of unimportant taxes, productive of relatively
little revenue, and requiring especial vigilance and perseverance to make
them productive at all. The Intetnal Revenue Administration cannot by
itself make internal sources of revenues yield a fair share of the government
income until more power to secure adequate enforcement of existing tax
laws is granted, and until outstanding deficiencies jn the present alcohol and
tobacco legislation are corrected.

Miscellaneous Receipts
Miscellaneous government receipts declined by 30.01 per cent from a total
of Gdes. 989,814.39 in 1934-35 to Gdes. 692,641.83 in 1935-36.
The drop in revenues from this 'source, amounting to Gdes. 297,172.56,
was expected, since the greater part of these receipts is derived from
treasury investments in bonds of the Republic, and most of the holdings of
these bonds recorded at the beginning of the fiscal year 1934-35 were
disposed of during that year, as well as in 1935-36, resulting in a sharp
drop in interest returns on investments.
Of total receipts classified as miscellaneous government revenues, and
amounting to Gdes. 692,641.83 in 1935-36, the sum of Gdes. 368,268.96 was
derived from: (1) return on bond investments; (2) interest on the govern-
ment's time deposit in New York funds; and (3) the government's share
(one-third) of the dividend declared in July, 1936, on the capital stock of
the Banque Nationale de la R6publique d'Haiti. This share amounted to
Gdes. 68,500. The contract of sale of the bank provided that one-third of
the net profits would be paid to the government in that manner. Olf the





HAITI: REPORT OF FISCAL REPRESENTATIVE


remaining two thirds, half was applied to increase the bank's surplus, and
the other half was ,devoted to financing developments tending to increase
the export of agricultural products, in accordance with the provisions of
the contract of sale.
Treasury investments in Series A, B, and C bonds of the Republic de-
clined from a total of Gdes. 9,041,512.45 on September 30, 1934, to Gdes.
2,944,260.55 on September 30, 1935, and to Gdes. 1,109,644.05 on September
30, 1936. Interest received on these investments has declined corresponding-
ly, which fact accounts for most of the drop in miscellaneous receipts of
the government.
Next to interest on investments the chief source of miscellaneous income
is the interest paid on the government franc deposit for the redemption of
bonds of the 1910 French loan. Income from this stoutce, converted to
gourdes, amounted to Gdes. 247,488.25 in 1935-36, or Gdes. 41,512.85 less
than the total received from this source in 1934-35. Bonds are continually
being presented to the fiscal agent of the loan for redemption, and conse-
quently the balance in the redemption account is steadily diminishing.
Bonds redeemed in 1935-36 numbered 3,833, compared with 8,758 bonds in
1934-35. At September 30, 1936, there remained on deposit to cover future
redemptions of these 'bonds a balance of Fes..25,973,920, compared with
Fcs. 27,928,486.25 as of September 30, 1935. The redemption fund is more
than sufficient to redeem all bonds of the 1910 loan not yet presented for
redemption. The government receives interest at the rate of 2Y2 per cent on
the franc deposit. The interest is converted monthly into dollars and
deposited to the credit of the government as miscellaneous receipts.
"All other" miscellaneous receipts in 1935-36 amounted to Gdes. 76,884.62,
compared with Gdes. 72,461.57 in 1934-35. Chiefly, these receipts consist
of interest and amortization on treasury loans to communes, and funds
reverting to the treasury through prescription of unpaid treasury checks.
Loans to communes showed a balance of Gdes. 816,110.38 on September
30, 1936, as against Gdes. 808,812.48 on September 30, 1935. Interest and
repayments on these advances totalled Gdes. 37,528.62 during 1935-36 and
Gdes. 35,551.32 during the previous year. ,
The communes which have benefited from advances made from the
government treasury in recent years with few exceptions have paid interest
and amortization charges regularly. There are, however, a number of
outstanding cases where communes have done nothing to service some of
the less recent loans amounting in the aggregate to a considerable sum.
A new tariff of communal taxes designed to augment communal revenues
went into effect a year ago. With the increased income derived from the
new taxes, it should be possible for the government to arrange with com-
munes in default on their interest and amortization payments to begin
retiring their debt to the State. With over Gdes. 800,000 due the treasury
as a result of these advances, the eventual retirement of the existing loans
should provide a substantial amount of cash to be paid into the treasury.






HAITI: REPORT OP FISCAL REPRESENTATIVE


- Receipts from Communes
The collection of communal revenues by the Internal Revenue Service in
all communes of the Republic excepting Port-au-Prince has now been in
force for three years. Results on the whole have been satisfactory.
The Internal Revenue Service retains 15 per cent of all communal reve-
Snues collected by it as a service charge to cover the cost of collection. The
amount of this service charge was Gdes. 266,930.55 in 1935-36 compared
with Gdes. 267,363.62 in 1934-35. It is evident, therefore, that there was
very little change last year in the gross yield of the communal taxes in
Spite of the scaling upward of the various taxes which furnish revenues to
.the communal administrations.
The fifteen per cent service charge referred to is included, for accounting
purposes, under a separate classification in all tables showing government
revenues appearing in this report, and wherever reference is made to total
government revenues in the text of this report the amount of the service
charge is included in the total.


Government Expenditures

Total government expenditures from revenues amounted to Gdes. 36,-
631,574.03 in 1935-36.
Chart No. 4 reveals that revenues increased, and expenditures dropped,
from the 1934-35 totals. While the steepness of the decline in expenditures
was due mostly to the fact that the sum of Gdes. 5,000,000 was disbursed
in the prior year in payment of the purchase price of the capital stock of
the Banque Nationale de la Republique d'Haiti, there was nevertheless a net
economy in 1935-36, amounting to Gdes. 723,436.63, if the bank-ptrchase
-operation is excluded from the total for 1934-35. It ils therefore correct to
:state that the gross operating costs of the government were less in 1935-36
than in 1934-35, and by a sum of about three-quarters of a million gourdes.
The chart also shows that the spread between revenues and receipts was
not excessive.. The actual figures were Gdes. 34,598,364.33 for revenue
receipts, and Gdes. 36,631,574.03 for expenditures from revenues, leaving
an excess of expenditures over receipts of Gdes. 2,033,209.70, as compared
with a similar deficit in 1934-35 of Gdes. 12,263,369.70 (or of Gdes. 7,263,-
369.70 if the bank-purchase operation is excluded from the account).
Here it should be explained that all references in this report to total
.expenditures (except where otherwise specifically stated for purpose of
analysis) include both ordinary budgetary disbursements and disbursements
-from extraordinary or supplementary appropriations. There is no "extra-
ordinary budget" in the sense that special appropriations created during the






HAITI,: REPORT OF FISCAL REPRESENTATIVE


budgetary year for flood relief, public works, etc., are separately accounted
for. In other words, the various expense totals represent total dis-
bursements regardless of the nature of the appropriation from which they
were drawn..
The only exception is in the case of deposits in the government treasury
of bonds and guarantees, trust funds, payments to revolving funds, and
receipts or profits realized by bureau of the government operating certain
public services. These are separately accounted for, and only the net
disbursements appear in the monthly and, yearly listing of. receipts and
expenditures, and in every case, they are carried as an item separate from
revenue receipts and expenditures from revenues. However, such receipts
during the accounting period usually are not far removed from dis-
bursements, of the same nature, so that the net effect on cash is not great.
In 1935-36, for example, receipts in these "non-fiscal" accounts exceeded
withdrawals by Gdes. 131,915.12. In 1934-35, there was a net withdrawal,
or debit item, of Gdes. 89,516.31, and in 1933-34 a net withdrawal of Gdes.
68,432.47. On September 30, 1936, the balance in the "non-fiscal" accounts
amounted to Gdes. 621,212.23, as against Gdes. 497,123.89 as of September
30, 1935.
The expenditure curve of Chart No. 4 therefore correctly presents all
government operating expenditures, including service of the public debt,
and disbursements of an extraordinary nature-in short, it presents all dis-
bursements from the treasury from current revenues; or, where an annual
deficit is recorded, from revenues accumulated in prior years as part of the
treasury reserve.
The record for the past five years shows a net excess of expenditures
over receipts of Gdes. 15,164,569.16 (or of Gdes. 10,164,569.16 if the bank-
purchase operation is excluded). The annual surplus or deficit during the
five-year period has been as follows:
Fiscal years: Surplus Deficit
1931-32........................... .................. 4,864,369.90
1932-33.......................... 4,046,490.59 ...................
1933-34............................ .................. 50,110.45
1934-35 ............................ .................... 12,263,369.70*
1935-36 ............................................... 2,033,209.70
Total........................ 4,046,490.59 19,211,059.76
(Net deficit: Gdes. 15,164,569.16)

There has been, it is true, a considerable drain on treasury reserves
because of these recurrent deficits; but for the most part, the deficit of Gdes.
15,164,569.16 may be assigned to a single year, 1934-35 when a short coffee
crop brought unexpectedly low receipts. Moreover, of the deficit recorded
in.that year, almost half (Gdes. 5,000,000) was due to the bank-purchase

*Including the sum of Gdes. 5,000,000 representing the purchase price of the capital stock of the Banque
National de la Ripublique d'Haiti.






HAITI: REPORT OF FISCAL REPRESENTATIVE


operation already mentioned. Strictly speaking this was not an operating
expense, since it simply involved an exchange of cash for ownership of a
profitable enterprise, but for convenience in accounting, the item is included
in the figure for total government expenditures from revenues in 1934-35.
It should be noted that despite a period of world depression, there was
recorded in 1932-33 a surplus of Gdes. 4,046,490.59, and in the following
year expenditures and revenues were very nearly equal. Considering the
relative inflexibility of government expenditures, and the period of world
wide depression through which we have passed, it is considered that the
Haitian government has met with extraordinary success in adjusting its
expenses to wide year-by-year variations in government income. It is
believed that few countries can present a better record in this respect.
If Haiti were to present its receipts and expenditures in the manner so
commonly followed by other countries today, viz., by separating ordinary
expenses from extraordinary expenses (relief disbursements, etc.), the
following would be the record over the depression period:
Total Operatingt
Revenues Expenses: Surplus:
Gdes (000's) Gdes (000's) Gdes '(000's)
1929-30................... 38,648 38,421 227
1930-31................... 31,746 35,479 3,733*
1931-32................... 28,024 31,285 3,261*
1932-33................... 37,305 31,674 5,631
1933-34................... 36,752 32,588 4,164
1934-35.................. 30,092 34,136 4,044*
19.35-36................. 34,598 34,393 205
237,165 237,976 811*

Thus, by eliminating all extraordinary expenses, which in effect represent
disbursement from treasury resources of funds for relieving unemployment,
for flood and epidemic relief, for public works and other purposes assimi-
lated to the "extraordinary" depression expenditures of other governments,
we find that Haiti during seven yeans of depression has come within only
Gdes. 811,000 of meeting all of its ordinary operating costs, including full
service of the public debt, and without recourse to any borrowing whatso-
ever, and without creating any floating indebtedness or neglecting any of
the essential operating functions of government. This is an extraordinary
achievement, the equal of which would be difficult to find in the financial
administration of any other government during the seven depression years.
The budget for the year under report contemplated expenditures totalling
Gdes. 34,249,781.07. Since revenue receipts totalled Gdes. 34,598,364.33,
the original program of expenditures was entirely covered by receipts, with
the sum of Gdes. 348,583.26 to spare. However, supplementary and extra-
ordinary appropriations allocated during the year increased beyond the
original budgetary appropriations the sum of money actually disbursed.

*Defcit.
tAfter eliminating extraordinary expenditures.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Supplementary and extraordinary appropriations in the following aggre-
gate amounts were opened during 1935-36 in favor of the government
services and departments listed below:
Supplementary Extraordinary
appropriations: appropriations: Total:
Gourdes Gourdes Gourdes
Public Works Administration............................ 826,000.00 826,000.00
Department of Foreign Relations...... 9,223.00 434,700.00 443,923.00
Department of the Interior............ 2,202.00 445,000.00 447,202.00
National Service of Agriculture........ 179,525.20 195,961.91 375,487.11
Department of Finance.................................. 181,340.55 181,340.55
Garde d'Haiti ................................ 100,000.00 80,000.00 180,000.00
National Public Health Service........ 101,745.96 25,164.11 126,910.07
Department of Religion................... .................. 24,500.00 24,500.00
Department of Commerce............... 5,000.00 .................... 5,000.00
Vocational Educational Service....... 5,750.00 .................... 5,750.00
Department of Public Instruction.... ................ 3,333.30 3,333.30
403,446.16 2,215,999.87 2.619,446.03
The above amounts constituted authorizations to expend, and not actual
expenditures. In a number of instances, the appropriations granted were
accompanied by corresponding compressions either in budgetary allocations,
or in other extraordinary or supplementary appropriations. For example,
salaries of Government employees for one month (November, 1935) were
reduced by 5 and 10 per cent, as a contribution to aid the government in
bringing relief to flood sufferers. And here it should be recalled that extra-
ordinary appropriations give authority to expeid funds during a period of
two years from the date of the appropriation, whereas budgetary and
supplementary appropriations are expendible only within the limits of the
fiscal year. Supplementary appropriations simply augment existing budget-
ary allocations. They may be accorded only by law. Extraordinary
appropriations, on the other hand, cover purposes not foreseen directly in
the budget, and they may be created either by law or, when the legislative
body is not in session, by executive order.
Unused balances in extraordinary appropriations at September 30, 1935,
amounted to Gdes. 309,468.22. As shown above, new extraordinary ap-
propriations created during the year amounted to Gdes. 2,215,999.87, mak-
ing a total of Gdes. 2,525,468.09. At the end of September, 1936, there
remained an aggregate amount of Gdes. 196,457.33 representing unused
balances of extraordinary appropriations.
Extraordinary appropriations created in 1935-36 were collectively in the
amounts, and for the purposes, listed below:
Gourdes:
Receptions and public celebrations........................ 370,000.00
Roads .......... ............................................. ...... 360,000.00
Flood Relief ............................................................ 220,000.00
Frontier Commission........... ............................ 200,700.00
Flood control, drainage, irrigation...................... 172,000.00
Legislative elections................................................ 150,000.00
Public buildings................................................. 150,000.00
Municipal improvements........................................ 125,000.00
Agricultural extension (coffee, coconuts, etc.)........ 103,428.99
Municipal water works........................................ 94,500.00
Purchase of automotive equipment (Garde d'Haiti
and National Service of Agriculture) .............. 79,032.92
Telephone and radio communications.................... 74,500.00
Control of anthrax epidemic.................................. 46,164.11
M miscellaneous .................................................. 70,673.85
2,215,999.87






HAITI: REPORT OF FISCAL REPRESENTATIVE


During the previous year, extraordinary appropriations totalled Gdes.
2,822,795.04, of which sum allocations, for road building, irrigation, flood
control, agricultural extension, and similar appropriations for work of a
constructive nature totalled about Gdes. 1,156,000, as against approximately
SGdes. 635,000 appropriated for similar work in 1935-36.
The government was not so successful in 1935-36 as in the previous year,
therefore, in directing funds appropriated from its treasury reserves toward
the accomplishment of work such as road building and irrigation, and in
other respects building foundations 'for an expansion of agricultural pro-
duction. The October floods, and the anthrax epidemic required urgent
appropriations. Public celebrations, the cost of holding elections, and the
work of the frontier commission, were considered sufficiently important to
require the appropriation of the funds indicated above, amounting in all to
more than Gdes. 700,000. Because of these unforeseen charges against the
treasury, there remained comparatively small sums which could be spared
for constructive developments such as had been undertaken in recent prior
years from surplus revenues or treasury reserves.
The figures given above relative to extraordinary appropriations, as has
been remarked, are authorizations to expend, and not actual expenditures.
The figures for actual expenditure in 1935-36 from extraordinary appro-
priations were as follows by departments and services:
Gourdes
Public Works Administration.............................. 902,705.33
Department of Foreign Relations.......................... 454,427.63
Department of the Interior.................................. 439,662.10
Department of Finance.................................... 169,342.41
National Service of Agriculture......................... 154,579.88
Garde d'Haiti ...................................................... 66,660.29
Department of Religion.......................................... 24,500.00
National Public Health Service.......................... 23,444.40
Department of Public Instruction............................ 3,333.30

Total....... ........................................................ 2,238,655.34

This report on government expenditures has discussed the matter of
extraordinary appropriations in considerable detail, and quite properly so,
since the manner in which surplus funds or treasury reserves are utilized,
the nature and importance of the contingencies which arise each year for
which extra funds have to be appropriated, and the amount of extra-budge-
tary money which is appropriated for constructive purposes, provide a
particularly useful and illuminating means of measuring the care with
which the public funds are administered.
The ordinary budgetary appropriations are less flexible, and budgetary
expenditures vary comparatively little from year to year. The relation
between budgetary (and supplementary) expenditures, and disbursements





HAITI: REPORT OF FISCAL REPRESENTATIVE


from extraordinary appropriations for the past three fiscal periods is given
below:


SExpenditures: 19q5-36
Gdes '(000's)
Ordinary and supplementary............... 34,393t
Extraordinary .................................... 2,239

36,632


1934-35
Gdes (000M)
34,136
3,219

37,355


1933-34
Gdes (000's)
32,588:
4,214

36,802


The ordinary budget of expenditures for the fiscal year 1935-36 authoriz-
ed total expenditures of Gdes. 34,249,781.07, or Gdes. 200,279.52 more than
the net total of budgetary authorizations for the previous year. Supple-
mentary appropriations, less budget compressions and sums reverting to
the treasury at the year-end, carried budget expenditures to a total of
Gdes. 34,392,918.69 in 1935-36, or Gdes. 256,809.99 more than the compa-
rable total for 1934-35.
Total expenditures (including those from extraordinary appropriations),
by government departments and services, in 1935-36 showed comparatively
little variation from the corresponding figures for the previous year. The
totals for 1935-36 by departments and services, together with the increase
or decrease in each case, are tabulated below:


National Service of Agriculture............
Department of Foreign Relations........
Garde d'Haiti......................................
Department of Finance........................
Department of Labor...........................
Service of the Series A, B and C Loans
National Public Health Service............
Internal Revenue Administration..........
Department of Religion......................
International Institutions....................
Office of the Fiscal Representative........
Department of Agriculture...................
Department of Justice...........................
Department of Commerce....................
Department of Public Works................
Department of the Interior...................
Department of Public Instruction..........
Public Works Administration...............


Total Expenditures
1935-36
Gourdes
1,898,919.69
1,040,433.27
6,824,393.28
979,130.20
623,934.44
8,699,965.33
2,766,783.19
971,221.21
452,834.90
90,000.00
1,409,270.94
94,701.30
1.396,230.83
339,815.97
31,297.61
2,208,130.74
1,847,304.65
4,957,206.48


Total............................................. 36,631,574.03


Increase over
1934-35
Gourdes
271,542.35
250,885.80
143,713.47
80,697.41+
61,354.94
40,320.913
32,522.78
25,931.94
13,224.74
15,000.00
39.69*
764.01*
11,861.55*
20,054.04*
21,405.12*
133,991.00*
163,574.51*
1,306,941.07*

723,436.63
(net decrease)


tThese items represent ordinary and supplementary expenditures of the Government during the year including
the full cost of service of the public debt. Expenditures from accruals to the operating funds of the services
,charged with revenue collection are also included..
IThis figure does not include Gdes. 5,000,000 expended for purchasing the capital stock of the Banque Na-
*tionale de la Republique d'Haiti.
tAfter excluding from expenditures in 1934-35 the sum of Gdes. 5,000,000 representing the purchase price of
the capital stock of the Banque Nationale de la Rdpublique d'Haiti.
*Decrease.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Although expenditures for public instruction appear to have declined by
Gdes. 163,574.51, this is not actually the case since early in 1935-36 a large
number of rural schools were transferred to the administration of the
National Service of Agriculture. A corresponding increase in expenditures
Was recorded by the .latter service.
The accounting system devised by this office permits a detailed classifi-
cation of all government expenditures by governmental functions (legisla-
tive, judicial, executive, etc.) as well as by objects of expenditure (salaries
and wages, supplies, administration, etc.)
Since there was relatively Elittle variation in government expenditures
during 1935-36, when comparison is made with disbursements by depart-
ments and services during the previous year, the changes in expenditures
classified by functions likewise are of relatively small importance, and no
points of any particular significance can be deduced from the accounts.
Payments in connection with service of the public debt, amounting to 23.84
per cent of total expenditures, continued to be the most important single
'item. Expenditures of the police and military force (Garde d'Haiti) were
Next in importance with 18.70 per cent of the total', followed by educational
activities with 10.09 per cent. Financial administration comprised 8.12 per
cent of total expenditures, and public health activities 7.70 per cent.
Expenses classified under "Administration and Operation", "Repairs
and Maintenance" and "Fixed Charges", the latter comprising chief
service of the public debt, remained in 1935-36 with very little change from
the corresponding accounting classifications for the previous year. Expenses
under "Acquisition of Property" declined from a total of Gdes. 2,574,602.62
in 1934-35 to Gdes. 1,407,818.29 in 1935-36.
Subdividing expenses for administration and operation, we find that total
government disbursements for salaries and wages amounted to Gdes.
18,337,820.02 in 1935-36, registering a decline of Gdes. 220,040.47 from the
corresponding 1934-35 total. It is interesting to note that disbursements
for salaries and wages in 1935-36 were almost exactly 50 per cent of total
expenditures of the government.
Payments for supplies and materials increased from Gdes. 3,214,043.72
in 1934-35 to Gdes. 3,312,170.37 in 1935-36; transportation expenses from
Gdes. 1,447,137.23 in 1934-35 to Gdes. 1,627,908.51 in 1935-36, and "special
and miscellaneous" expenses (excluding, for sake of comparison, the bank-
purchase operation from the 1934-35 account) from Gdes. 639,458.91 in
1934-35 to Gdes. 946,402.06 in 1935-36.

Customs Service
For the fourth year in succession the cost of customs operations and other
expenses connected with the activities of this office in 1935-36 remained
just above a total figure of Gdes. 1,400,000 for the year. The exact figure
for 1935-36 was Gdes. 1,409,270.94 which compares with Gdes. 1,409,310.63
in 1934-35, Gdes 1,417,528.08 in 1933-34, and Gdes. 1,415,531.12 in 1932-33.





HAITI: REPORT OF FISCAL REPRESENTATIVE


'The expenses of this service are budgeted with particular care, which
accounts in part for the striking similarity in the annual figures for total
disbursements. The cost accounting system put into effect in 1924, and
improved in 1928, permits detailed analysis of expenditures and enables the
customs administration to exercise effective accounting control over its
operations.
This elaborate accounting control is particularly necessary in this orga-
nization, since its expenses are limited by the Agreement of August 7, 1933,
to 5 per cent of customs revenues, and with an income subject to the wide
variations characteristic of customs collections, it is essential that expenses
be carefully planned in advance and adjusted from time to time to conform
with fluctuating availabilities.
Accruals to the operating fund of this service (the "5 per cent fund")
amounted to Gdes. 1,447,168.28 in 1935-36, compared with Gdes. 1,215,747.93
in 1934-35 when the short coffee crop of that season produced sharply
diminished customs receipts and hence smaller availabilities for customs
operations. The gain of Gdes. 231,420.35 in accruals to the five per cent
fund did not permit increased expenditures, since it was felt advisable to
add to the small reserves of Gdes. 58,348.41 in the fund carried over form
the previous year. With accruals to the fund amounting to Gdes.
1,447,168.28 in 1935-36, and expenses amounting to Gdes. 1,409,270.94, a
small surplus (Gdes. 37,897.34) was recorded, which surplus, added to the
reserve at the previous year-end, left a balance of Gdes. 96,245.75 in the
five per cent fund at September 30, 1936.
It should be remarked that in the twenty years during which this office,
and the Office of the Financial Adviser-General Receiver to which it
succeeded, have been in operation, the expenses of the service have been
maintained strictly within the limit of accruals to the 5 per cent fund.
Furthermore, the service has from time to time contributed sizeable amounts
for permanent additions or improvements to customs property and govern-
ment buildings. It has also usually contributed the entire amount due yearly
to the Banque Nationale de la R6publique d'Haiti as its contractual com-
mission of one per cent of customs revenues for treasury service. This
annual payment was again made in 1935-36. It amounted to Gdes.
289,433.66, compared with Gdes. 243,149.59 in 1934-35.
The cost accounting system applied to the expenses of this organization
establish the same classifications as in the case of other government
services. The accounts for 1935-36 reveal that expenses for administration
and customs operation declined from a total of Gdes. 1,131,906.99 in 1934-35
to Gdes. 1,096,345.86 in 1935-36. In the latter period, expenses under the
same general classification comprises 77.80 per cent of all disbursements
from the 5 per cent fund, a decline from 80.31 per cent recorded the previ-
ous year. Charges for general administration dropped from Gdes. 597,-
777.34 in 1934-35 to Gdes. 588,807.95 in 1935-36. The cost of customs





HAITI: REPORT OF FISCAL REPRESENTATIVE


operations similarly dropped from Gdes.. 534,129.65 in 1934-35 to Gdes.
507,537.91 in 1935-36. Repairs and maintenance costs declined by Gdes.
5,238.84 to a total of Gdes. 15,977.73. "Fixed charges", consisting of the
annual customs contribution toward payment of the one per cent treasury
commission due the Banque Nationale de la R6publiqtte d'Haiti, as already
mentioned, increased to Gdes. 289,433.66 in 1935-36.
Subdividing administration and operating expenditures, we find that
total disbursements for salaries and wages were Gdes. 940,721.40 in 1935-36,
a decline of Gdes. 39,561.32 from the 1934-35 figure. The cost of supplies
and materials remained practically the same in both periods (Gdes. 57,-
499.70 in 1935-36 and Gdes. 56,239.64 in 1934-35). The "transportation"
account, was charged with Gdes. 87,583.61 in 1935-36, an increase of Gdes.
23,925.92 from the 1934-35 figure. Changes in other accounts were un-
important excepting in the case of "special and miscellaneous" costs, under
which account the 1935-36 total of Gdes. 4,828.85 dropped from Gdes.
22,572.84 in 1934-35. The relatively high charge in 1934-35 was due to
expenses in connection with the independent audit of the accounts of the
organization conducted early in 1934-35. These audits take place at ir-
regular intervals. No audit of this kind was arranged for in 1935-36.
The tables covering custom's expenditures annexed to this report permit
an interesting analysis of the cost of collecting customs revenues in
Haiti. The record shows that for every gourde in customs revenues collect-
ed in 1935-36, the sum of Gde. 0.0203 was expended for customs adminis-
tration. Repairs and maintenance, acquisition of property, and the one per
cent commission paid the Banque Nationale de la Republique d'Haiti
absorbed an additional Gde. 0.0109. All other customs expenses, consisting
of the cost of operating the various custom houses, amounted to Gde.
0.0175 per gourde collected.
Gonaives (Gde. 0.0119 per gourde collected) continued to lead as the port
where customs revenues are recovered more economically than at any other
port. Port-au-Prince remained in second place (Gde. 0.0156), or slightly
under the average of Gde. 0.0175 for all custom houses. Jacmel and Cap
Haitien were in third place with Gde. 0.0165 each, followed by Petit Goive
(Gde. 0.0176); Miragoine, (Gde. 0.0187); Cayes, (Gde. 0.0204); Saint
Marc, (Gde. 0.0242); J6r6mie, (Gde. 0.0261); and Port-de-Paix, (Gde.
0.0267).
In comparing the above data with the like record for 1934-35, the cost
of collecting customs revenues at all ports, without exception, was less
.than in the preceding year.
It is confidently believed by this office that no country comparable to
Haiti can exhibit a record of economy in the cost of collecting customs
revenues even approaching the figures set forth above.
Internal Revenue Service
SFunds to cover the cost of collecting internal revenues and inspecting
tax collections are provided by an operating fund consisting of 15 per cent





HAITI: REPORT OF FISCAL REPRESENTATIVE


of internal revenues collected. Of this fund, an amoruhnt not exceeding 5 per
cent of internal revenues collected is to cover the cost of inspection work
carried on by a section of the office of the Fiscal Representative known
as the Internal Revenue Inspection Service. In addition, the Internal
Revenue Service, as distinct from the Inspection Service, retains 15 per
Scent of communal revenues collected by that service to cover the cost of
collecting communal revenues.
Total accruals to these funds in 1935-36 were as follows:
Internal Revenue Service Gourdes
10 per cent of Internal revenues............................. 469,542.64
15 per cent of communal revenues......................... 266,930.55
736,473.19
Internal Revenue Inspection Service:
5 per cent of internal revenues................................ 234,771.32
Total................................................................ 971,244.51

Actual expenditures by the two services from these funds during 1935-36
are given below:
Gourdes
Internal Revenue Service.......................................... 793,077.51
Internal Revenue Inspection Service...................... 178,143.70
971,221.21

As remarked above, the operating fund of the Inspection Service is not
to exceed 5 per cent of revenues collected. However, the Agreement of
August 7, 1933, provides that sums not needed by the Inspection Service
within its allowance shall be made available to the Internal Revenue
Service. Inspection costs have been found to be considerably less than the
full-five per cent allowance, and the Inspection Service therefore was able
to contribute the sum of Gdes. 56,627.62 from its allowance for 1935-36.
A similar contribution of Gdes. 41,220.69 was made in 1934-35. The 1935-
.36 contribution explains the fact that expenditures of the Internal Revenue
Service in 1935-36 exceeded the 10% and 15%o allowances given in the first
table above.
The Internal Revenue Service in 1935-36 not dnly was able to meet all
of its operating costs but it also paid in full the one per cent treasury
commission due the Banque Nationale de la R6publique d'Haiti for its
services in acting as a-depositary of internal revenue collections. In the
previous year a small part of the treasury commission had to be paid from
general government funds.
Combining all costs of the two services, we find that the net increase of
Gdes. 25,931.94 over total costs in 1934-35, resulting from the disbursement
of increased availabilities, was accounted for chiefly under the "acquisition
of property" account. Disbursements under this classification in 1935-36
exceeded similar disbursements in 1934-35 by Gdes. 22,741.11.






74 HAITI: REPORT OF FISCAL REPRESENTATIVE

Comparing the same periods, payments for salaries and wages declined
by Gdes. 4,913.58 in 1935-36; transportation by Gdes. 10,512.29; and repairs
by Gdes. 197.41. Costs for supplies increased by Gdes. 8,704.83; for rent,
by Gdes. 74.00; for fixed charges (the treasury commission) by Gdes.
5,611.00; and for special and miscellaneous items, by Gdes. 4,424.28.
As to the costs of the Internal Revenue Inspection Service, these were
as follows in each of the two fiscal periods:


1935-36
Gourdes
Salaries ...................................... 102,270.00
Supplies .................................... 1,399.05
Transportation ............................ 65,880.10
Miscellaneous ........................... 464.00
Repairs ...... ................................... 17.50
Equipment ................................. 8,113.05
Total................................... 178,143.70


1934-35
Gourdes
104,730.00
1,710.17
66,955.14
237.50
20.00
11,101.72

184,754.53


Disbursements under the more important headings declined in each case.
Transportation. costs remained relatively a heavy charge, due to the fact
that the nature of the activities of the Inspection Service require constant
travel in all parts of the Republic.*

Treasury Position

Operations during the fiscal year 1935-36 brought little change at the
year end in most of the items on the treasury balance sheet. The excess of
expenditures over receipts, amounting approximately to two million gour-
des, necessarily reduced the unobligated treasury surplus, but the loss in
cash produced by the operating deficit was covered by sales of treasury
investments in bonds of the Republic. Cash balances at September 30, 1936,
in the aggregate, reached a total slightly higher than the corresponding
cash total at Septemlber 30, 1935.
Continuing the practice in previous reports of this office, there is present-
ed below a simplified arrangement of the detailed statement (Table No. 45)
of treasury assets and liabilities:


Alssts Sept. 30, 1936
Asset Gourdes
Current assets................................... 2,873,039.46
Investments ..................................... 6,109,644.05
Other assets ...................................... 4,236,883.63
13,219,567.14
Liabilities
Current Liabilities ........................... 1,865,096.42
Reserves ....................................... 9,438,610.38
Surplus ............................................ 1,915,860.34
13,219,567.14


Sept. 30, 1935
Gourdes
2,645,990.26
7,944,260.55
4,418,564.98
15,008,815.79

1,710,405.50
9,431,312.48
3,867,097.81

15,008,815.79


*Further details regarding the activities of the Inspection Service will be found In the annexed report of the
Director General of that Servime.





.tAITI: REPORT OP FISCAL REPRESENTATIVE


An examination of the balance sheet reveals that the investment account,
as between the two dates, declined by Gdes. 1,834,616.50 and that the
surplus declined by Gdes. 1,951,237.47. Other accounts showed little change.
Current assets at September 30, 1936, consisted of: (1) cash deposits
in the Banque Nationale de la R6publique d'Haiti, in gouitdes (Gdes. 1,937,-
482.23); (2) demand deposits in the Banque Nationale de la R6publique
d'Haiti in New York funds (Gdes. 813,176.65); New York funds in time
account requiring thirty days' notice of withdrawal (Gdes. 30,847.70);
cash in the hands of disbursing officers (Gdes. 91,292.08); and receipts in
suspense (Gdes. 240.80).
The cash balances mentioned are the amounts carried on the books of
the Banque Nationale de la R6publiique d'Haiti as of the date given. The
liability on account of treasury checks drawn and not yet paid is expressed
by a separate item, amounting to Gdes. 951,181.11, included on the state-
ment among current liabilities. Other amounts included among current
liabilities as of September 30, 1936, were: (1) unused balances in extra-
ordinary appropriations (Gdes. 196,457.33); the liability represented by
trust funds, bonds, guarantees, and other "non-revenue" accounts (Gdes.
621,212.23) and the unused balance in the operating fund of the Fiscal
Representative (Gdes. 96,245.75). All of these sums are extra-budgetary
funds which the treasury might be called upon to pay at any time.
Obligations represented by appropriations in the ordinary budget of
expenditures are not included as a liability on the treasury report at the
year-end. Such obligations are presumed to be fully covered by current
revenues during the ensuing year. Balances in the extraordinary appropri-
ations may be drawn upon at any time during a period of two years from
the date the respective appropriations were created. Since they do not
necessarily bear any relation to current revenues, they are included among
current treasury liabilities.
In brief, the treasury report shows that current treasury obligations as
of September 30, 1936, amounting to Gdes. 1,865,096.42 were covered by
liquid cash assets of slightly more than a million gourdes in excess of that
amount. In this respect the treasury position as of the last mentioned date
.was somewhat better than it was on the same date the previous year.
But in addition to cash assets, the treasury held on September 30, 1936,
investments, amounting, at their cost price, to Gdes. 6,109,644.05. These
investments were of two kinds: first, the capital stock of the Banque Na-
tionale de la Republique d'Haiti purchased at a price of Gdes. 5,000,000,
and carried on the books at that amount at September 30 of both years;
and secondly, investments in bonds of the Republic, listed at their cost
value of Gdes. 1,109,644.05 as of September 30, 1936, and at Gdes. 2,944,-
260.55 as of September 30, 1935.
The investment in the Banque Nationale de la R6publique d'Haiti cannot,
of course, be considered as a liquid asset, and to express that fact there is




HAITI: REPORT OF FISCAL REPRESENTATIVE


included under "reserves" on the liability side of the balance sheet an item
of Gdes. 5,000,000. At the same time, it should be noted that ownership of
the stock represents ownership in a profitable institution which, in the first
full year of operation under its new status, yielded a substantial return on
the investment.
The investment in bonds of the Republic has changed in character during
the past two years due to the marked price appreciation of the Series A
and C bond's in the New York market. Today they represent a quick asset
readily convertible into cash at a return greater that the average price at
which the bonds were purchased. The Series A bonds held by the treasury
at September 30, 1936, were purchased at an average price of 76.2, whereas
all transactions in the bonds on the New York Stock Exchange have been
at close to par during the past year or more. Treasury holdings of these
bonds accounted for above under "investments", might therefore with equal
propriety be included among current assets of the treasury.
At September 30, 1936, these treasury investments consisted of: (1)
Series A bonds carried on the books at Gdes. 383,407.25 (par value Gdes.
503,000); Series C bonds carried at Gdes. 528,894.30 (par value Gdes.
Gdes 543,998.70); and Series B bonds carried at Gdes. 76,177.50 (par value
Gdes. 80,500). In addition, there were Series A bonds carried at Gdes.
121,165.00 and earmarked for the Garde d'Haiti savings account.
Under "other assets" there were included as usual only: (1) the balance
in the account maintained at the Banque Nationale de la R6publique d'Haiti
to cover fiduciary currency out of circulation; and (2) outstanding loans to
communes.
Fiduciary currency in circulation at September 30, 1936, was higher
than at the same date a year ago, and reserve requirements were corre-
spondingly less. The reserve account amounted to Gdes. 3,420,773.25 at
September 30, 1936, compared with Gdes. 3,609,752.50 at September 30,
1935. This account is adjusted monthly so that the balance in the reserve
account at no time exceeds the average of fiduciary currency in the vaults
of the Banque Nationale de la R6publique d'Haiti for the previous month.
The amount of this deposit will decrease, and treasury cash will increase,
as subsidiary coinage is lost or destroyed and as commercial need for
subsidiary coins increases.
The account representing sums owed the government treasury by com-
munes showed little movement during the year. Advances totalling Gdes.
46,340.55 were made to the communal administrations of Gonaives and
Jacmel during the year. These new advances, less partial repayments of
loans, carried the total amount outstanding as of September 30, 1936 to
Gdes. 816,110.38, from Gdes. 808,812.48 as of September 30, 1935.
Many communes are unable, or are making no effort to pay off their
obligations to the treasury. The outstanding amounts represent treasury
assets only to the extent that the beneficiaries of treasury advances are able




.HAITI: REPORT OF FISCAL REPRESENTATIVE


and willing to repay the sums borrowed. Since repayments are slow, it
..has been the practice, for the sake of conservative accounting, to set aside
from surplus an amount corresponding to the balance of outstanding
treasury advances, and there is consequently included among reserves, as
of September 30, 1936 an item of Gdes. 816,110.38.
Experience in recent years has shown that communal administrations
which are beneficiaries of government loans in some cases do not appreciate
the nature of their obligations to the State and make less effort than they
.should to improve their credit standing by liquidating their obligations
promptly. Neglect of contractual obligations in individual instances reflects
not only on the credit of the contmunal administrations doncer4ned, but
Supon the security of advances of this kind as a group. When resources
permit, the treasury can be of much assistance to the comimrnual govern-
ments; built such assistance certainly cannot be readily forthcoming if
beneficiaries continue to neglect their obligations to the State.

Public Debt
Regular service of the funded debt of the Republic during 1935-36 re-
duced the gross amount of the debt to Gdes. 49,092,715.80 as of September
30, 1936, from Gdes. 54,930,599.85 on the same date of the previous year.
In only ten years the public debt of the Republic has been reduced by
one-half. The public debt today is only onethird, approximately, of the
gross debt recorded twenty years ago. A search of the records covering
.the early history of the public debt of Haiti justifies the statement that in
the last sixty years the public debt, both internal and external, has never
Been at a figure as low as it is at present.
As of September 30, 1936, the gross public debt of the Republic consisted
of the following items:
Gourdes*
Series A bonds.................................................... 38,663,841.80
Series B bonds................................................ 537,109.90
Series C bonds............................................... 6,269,264.10
Fiduciary currency .......................................... 3,622,500.00
49,092,715.80
The last item mentioned above represents simply the government's
'liability to protect fiduciary currency uncovered by the fiduciary currency
reserve, and it is here carried in the debt statement simply in continuation
of the practice of a number of years. It is entirely a matter of opinion as to
whether or not the item should be included in the debt statement. It was
"originally included largely in the interest of presenting a conservative
-accounting, and of avoiding any possible accusation of window-dressing.
*The fiduciary currency is, of course, non-redeemable. At present an aver-
age of about half of the original issue of Gdes. 7,245,000 in nickel and
bronze coins is used in the ordinary conduct of business, and of the balance
inmany coins undoubtedly have been lost or destroyed in the thirty years




HAITI: REPORT OF FISCAL REPRESENTATIVE


since they were originally coined. That either the Banque Nationale de la
R6pu1blique d'Haiti or the government would ever be called upon to redeem
them is highly doubtful, even if they were legally redeemable. Never-
theless, half of the issue, corresponding roughly to the part in circulation, is
regularly carried as part of the public debt on the debt statement, and
early all of the balance, representing coins in the vaults of the Banque
National de la R6pudblique d'H'aiti and out of circulation, are covered by
the fiduciary currency reserve deposit with the bank, which is adjusted
monthly to conform with the average face amount of coins out of circu-
laditon the previous month. The whole arrangement represents a most
conservative accounting of the nickel currency issue.
The other items above represent the face amounts of bonds of the three
series of the 1922 dollar loan still outstanding, less small amounts remain-
ing in the respective sinking funds at the year-end and not yet applied to
the redemption of bonds.
These amounts remaining in the sAinking funds were as follows at
September 30, 1936:
Gourdes:
Series A sinking fund.............................................. 721,158.20
Series B sinking fund.............................................. 190.60
Series C sinking fund.............................................. 72,499.55
Total............... ........................................ 793,848.35

Otherwise, there was no internal or external funded indebtedness at -
September 30, 1936, and no floaating indebtedness whatsoever except for
the usual government obligations incurred in the course of regular oper-
ations, all of which at the beginning of 'the new fiscal year were covered
by appropriations ini the ordinary budget, including a fund of Gd;es. 91,200
for the liquidation of claims.
The debt statement therefore presents the situation as conservatively as
possible, and if anything the statement errs on the side 'of benhg ultra-
conservative.
The statement of the public debt does not include outstanding bonds
of the French 1910 loan. These bonds were legally called in 1923.
Sufficient French francs had been paid to redeem the entire issue.
Enough funds remain on deposit to redeem all bonds still outstand-
ing of the original issue of 130,000 bonds of 500 francs each. That many
bonds (50,506, according to a recent accounting), many of which undoubt-
edly have been lost or destroyed, have not yet been presented for re-
domption in no wise creates an obligation on the Haitian government, for
any doubts entertained as to the possibility that the bonds might be paya-
ble in gold francs, rather than In current francs, were dispelled by a clear-
cut decision before the bonds were called; and subsequent events in mone-
tary history regarding the "gold clause" in government obligations, and
the decisions rendered in foreign countries in matters relating tb the gold




HAITI: REPORT OF FISCAL REPRESENTATIVE


clause, have confirmed in every way the original stand of the Haitian
government. And here it should be stressed that the 1910 loan bonds
contain no "gold clause".
Bonds of the 1910 loan carry the title "Republic of Haiti External
Loan 5% Gold 1910". There was pledged for payment of the principal,
interest and expenses of the loan: (1) one American Gold Dollar for every
100 pounds of coffee exported; and (2) a 15 per cent special surtax in
American gold on importations. These two provisions account for the
appearance of the word "gold" in the title. Neither the loan contract, nor
the bonds themselves, state that either the principal, or the interest, is
payable in gold and the law by which the contract was ratified omits the
word "gold" in mentioning the title of the loan. Since principal and interest
are (according both to the bonds and to the contract) payable in "francs",
it is considered that the tender of francs fully satisfies the government's
obligation. Consequently, bonds of the loan not'yet offered for redemption
are not included in any official statement of the national debt.
Bonds of the 1910 loan have been retired rapidly in recent years (7275
in 1932; 9566 in 1933; 9934 in 1934; 8266 in 1935; and 3228 from January
1, 1936 to September 30, 1936).
Recent action by the French government in again revaluing its currency
makes more remote than ever the possibility of any payment being made
in gold francs.
The public debt of Haiti, therefore, consists essentially of the bonds of
the 1922 dollar loan still outstanding. Of the three series of the loan issued,
the Series B, or internal issue, had practically been extinguished at the end
of the year under report; and in fact, the few remairnilng bonds of that
issue have since then been redeemed, or called for redemption, through the
ordinary operation of the sinking fund At the present writing, therefore,
the Republic of Haiti no danger has an internal funded debt.
Consequently, the public debt of the Republic at Sept. 30, 1936, consisted
essentially of the two external issues, designated as Series A and Series C.
Of these, the Series C issue was not offered publicly, the bonds having been
given in exchange for bonds of the National Railroad Company of Hai't
on the basis of $72.39 principal amount and interest of "C" bonds for
$96.53 of raillway bonds. The bonds are callable as a whole on October 1,
1938, and mature October 1, 1953. Interest, as in the case of the "A" bonds,
is payable semi-annually (October 1 and April 1) at 6 per cent. The bonds
are not quoted on any stock exchange, but since they are secured equally
with the "A" issue, transactions in the bonds closely follow quotations for
the Series A bonds.
The Series A bonds, as in the case of the other two issues, are direct
obligations of the Republic, and are a specific first charge upon internal
revenues and customs revenues, subject only to a prior charge on customs
revenues (not exceeding 5 per cent thereof) for expenses of administration.





HAITI: REPORT OF FISCAL REPRESENTATIVE


They are callable as a whole at par on or after October 1, 1937, and mature
on October 1, 1952. The bonds are listed on the New York Stock Exchange..
and compliance has been made with the registration requirements of the
Securities and Exchange Convnission.
Series A bonds were issued to provide funds chiefly to refund the franc
debt,. to pay the internal floating debt, and for other purposes, including
public works. Bonds in the face amount of $16,000,000 were issued, and
proceeds to the Haitian government reached $14,741,920. A detailed ac-
counti)g of the proceeds and the disposition of those 'proceeds is given
below:


Proceeds:
Proceeds of the Serie A issue......................
Interest at 6% from Oct. 1, 1922 to the date
of execution of the contract.......................
Interest at 2Y2% from Oct. 9, 1922 to Nov.
29, date on which proceeds.......................
were deposited with fiscal agent by The
National City Company.............................
Interest on proceeds deposited with the fiscal
agent .................................... ..............


Disposition of Proceeds:
Capital and interest due on note to the Banque
N rationale .................................... .............
Purchase of 83,500,000 francs for redemption
of loans of 1896 and 1910.......................
Payment of arrears on guarantee of interest
and amortization on bonds of the National
Railroad Company of Haiti.......................
Payment of arrears of interest on internal
funded debts of 1912, 1913 and 1914,
A, B, C............................... ..................
Cash awards of Claims Commission...............
Extra contractual amortization of debt as
authorized by Protocol of October 3, 1919
Expenditures for public works.......................
Total.................................... .....


$14,741,920.00

13,333.33


50,208.85
234,482.86


$15,039,945.04


1,853,609.13

6,037,650.00

2,160,856.90

1,065,152.47
1,211,100.45
300,000.00
2,411,576.09*

$15,039,945.04


The bond contracts covering each of the three bond issues call for
specified payments to be made each month for ikaterest and amortization.
From such payments, sufficient funds are set aside to cover the next interest
payment. 'The balance is applied to purchases of the bonds ih the open
market at par or below (qr by call by lot annually if market purchases
cannot be made at par or better). The monthly payments to the fiscal
agent ihorease gradually each year. Thus, monthly payments for service
of the Series A issue amotlnted to Gdes. 489,583.35 in each month of the
fiscal year 1935-36, as against Gdes. 487,500.00 ih the previous fiscal period.
This has the effect of slightly accelerating bond retirement each year.


*This amount was expended nnder many individual appropriations for different purpose (mostly for roads.
Irrigation, vocational schools, etc.) Small unused balances in these appropriations, amounting in all to about
Gdes. 8,00, reverted to the treasury.




HAITI: REPORT- OF FISCAL REPRESENTATIVE


However, the rapid retirement of outstanding bonds chiefly has been due
to: (1) the fact that the fiscal agents have been able to punrhase bonds for
amortization since 1931 and until a year ago at prices considerably under
par; (2) the policy in the early years of the loan of devoting surplus reve-
nues to debt reduction in excess of contractual requirements; (3) the ac-
celerating effect of large disbursements for debt retirement In the :early
years of the loan resulting in a rapid decline in interest requirements, and
leaving correspondifngfly greater amounts available for amorti'zatiton pur-
poses; and (4) the fact that.the authorized issue of Series B bonds (on
which the schedule of interest and amortization payments was based) was
considerably greater than the amount of bonds actually issued, resulting in
especially rapid retirement of the Series B issue.
.In 1935-36, payments for service of the bonds applied to interest re-
quifrements amounted only to Gdes. 2,934,658.90, while the balance applied
to amortization totalled Gdes. 5,730,904.10 for the three series.
Total interest charges on the funded debt in 1935-36 amounted only
to Gdes. 2,934,658.90, or 8.48, per cent of total revenue receipts in that
year. Amortization charges were 16.56 per cent of revenue receipts.
Since the Series B issue has been called, and payments for service of that
issue at the present date are no longer required, there will be a saving to
the public treasury of over a million gourdes in 1936-37, and of over Gdes.
1,800,000 in 1937-38. These figures represent fands which otherwise would
have to be paid for debt service of the "B" issue. At the end of the current
year, therefore, interest-and amortization charges of the total debt should
comprise a much smaller portion of government revenues that they did
in 1935-36.
Enough has been given of the recent debt history of the Republic to
show that as a debtor nation Haiti has maintained its credit standing and
improved its financial situation to a greater extent than the majority of
foreign countries which in the past have had occasion to resort to the money
market.
Prices for Series A bonds during the past three fiscal years have steadily
risen. Quotations on the New York Stock.Exchange covered the following
range during the fiscal years mentioned:
Fiscal Years: High Low
1933-34 ...................................................... 82 68V4
1934-35 ..................................................... 92 79
1935-36...................................................... 99/4 91%

Since the close of the fiscal year under report, prices for the bonds have
reached par, putting Haitian bonds in a class with very few issues o f Latin
American countries. Of all the government bonds of Latin American
countries traded in New-York, issues of only three countries, up to No-
vember 21, 1936, had reached, or exceeded, the price of Haitian Series A
bonds. These three countries were the Argentine Republic, Cuba and Pa-




HAITI: REPORT OF FISCAL REPRESENTATIVE


nama. Furthermotn re, except in the case of the Argentine issues, each of
the other two countries had government issues outsttanding whik h com-
manded prices far inferior to the prices paid for Haitian bonds bf any
issue. In the period from January 1, 1936, to November 21, 1936, the
lowest quotations for any government issue of the countries mentioned,
traded on either of the two New York exchanges, were as follows:
Republic of Haiti.............................................. 931
Argentine Republic......................... ............ 97%
Cuba ................................. .............. 37
Panama ................................................ ....... 58

The market price of securities is the final arbiter of the credit standing
of any country. As measured by present market prices, Haiti's credit
standing is equalled or surpassed only by the United States and Canada in
North America; by Norway and Denmark among the Scandinavian
countries; by Czechoslovakia, Finland, France, the Irish Free State and
Poland among other European countries; and by Australian and Japan in
the rest of the world exclusive of the three Latin American countries
mentioned.
A comparison of high and low prices for Haitian Series A bonds, to-
gether with the corresponding quotations for representative Argentine,
Colombian and Brazilian issues, is given below over a ten year period:
Haiti Argentina Colombia Brazil
6/52 6/57 6/61 6y2 /57
H. L H. L. H. L. H. L.
1927.............. 100%N-99 101% -97% 934 -923
1928............. 101 -98 101i3-99 95Y2-87 99y--93 4
1929............. 101 -96Y 101 -92% 91 -65 96Y -70
1930................ 100/4-92 99% -87 82 -55 874--47/2
1931............... 97 -55 983/ -35%3 78 -19 70 -12
1932............. 84 -52 68 -34% 40 -13Y4 25y2-14
1933.............. 79 -67 75y2-40Y4 493-16y 30 -1
1934.............. 823 -743 89y4-53 40/2-21 36Y4-20/4
1935............... 95 -82 99 -90!4 37 -19% 31Y-18
1936*.............. 100 -93%4 102%-97~2 293%-19 37y4-22%

With a record of uninterrupted service of its present debt, with the princi-
pal amount of bonds outstanding amounting to little more than $9,000,000,
and interest charges (although the bonds carry a six per cent coupon)
absorbing only slightly more than eight per cent of current revenues, it is
not surprising that the bond market has placed so high an appraisal on
Haitian securities.
In view of the prevailing low interest rates on bonds, of which many
issues do not have so fine a record for debt service as the Haitian bonds,
the latter are entitled to an even higher market appraisal-a price which
better reflects their present high yield.


*To December 16, 1936.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Service of Payments
The Service of Payments is essentially the general accounting and dis-
buising office, where control accounts covering all government receipts and
expenditures are centralized, where vouchers authorizing payments are
received, audited, and recorded, and where treasury checks are prepared
for signature. Accounting operations extend to cover transactions relating
to service of the public debt, government investments, deposits and with-
drawals of guarantees, cash bonds, and other "non-fiscal" receipts and
expenditures. Payrolls of government employees and pension lists are pre-
pared by the Service of Payments.
Statistics covering all financial operations are compiled and detailed
monthly reports are issued regularly. The accounting system follows
modern, approved methods, and permits the accumulation and segregation
of accounting Idata to the extent that full information is always available
regarding government finances. Cost accounting extends to the classi-
fidation of expenses into a dozen different accounts covering salaries,
supplies, transportation, etc., subdivided according to the different adminis-
trative divisions of the government, and further classified' by functions
(executive, judicial, etc.). The financial tables published in this report
represent the annual compilation of accounting data accumulated during
the fiscal year, together with comulative data' extending back under the
more important headings, as far as twenty years.
The present organization results from the experience of many years
during which the accounting system gradually has been improved and
amplified, until now it meets every need. The government accounting
office, as now constituted, is believed to compare favorably with the gener-
al government accounting of any other comparable country. Haiti can take
pride in being able to present data regarding government finances which
in scope and completeness surpass similar data available to the governments
of much larger countries.
Not only is information regarding financial transactions complete, but
what is equally important, is always promptly available. Current data
covering all government receipts, expenditures and other financial trans-
actions occurring during the month are assembled, tabulated, and made avail-
able to government officials within fifteen days following the close of the
month, and financial data of public interest are published in the Monthly
Bulletin of this Office, together with current commercial statistics, about
the twentieth of each month. At the end of each fiscal year the annual
detailed compilations of financial data are usually available in complete
form within a month following the close of the period.
Financial and commercial statistics lose much of their value if current
figures are not made promptly available. There can be no criticism on this
score so far as concerns Haiti.
Promptness in making statistics available, in issuing treasury checks, in
making payments of salaries and pensions, and in carrying out other




HAITIr REPORT OF FISCAL, REPRESENTATIVE,


operations of the Service of Payments is in part due to the use of modern
bookkeeping machines, including check-signing machines, mechanical ad-
dressing machines, check-protecting machines, calculating machines
and other mechanical equipment. Monthly checks covering salaries of
government employees and pensions are in the hands of the disbursing
officers throughout the country a few days before the end of the month
when they are due. Delays in making payments are very infrequent and
occur only when communications are interrupted by floods and damage to
roads.
All vouchers and supporting documents authorizing disbursements from
appropriations, as well as changes in government payrolls and pension lists,
are routed to the Service of Payments where, if in order, treasury checks
are prepared and sent to the proper official attached to the Office for signa-
ture. All checks drawn against treasury accounts are signed by a delegate
of the Department of Finance, excepting checks drawn against funds to the
credit of the Fiscal Representative. After signature, checks are distributed
to the various government offices where the expenses originated; or in the
case of salary payments at Port-au-Prince the checks are distributed direct-
ly to beneficiaries. Customs officials act as agents for distributing salary
and pension checks in customs districts outside of Port-au-Prince; and
where payments have to be made in rural sections, officers of the Garde
d'Haiti effect due distribution of checks during the course of their regular
inspection trips in the interior. Agents delivering checks to beneficiaries in
localities remote from banks and commercial establishments carry with
them sufficient cash so that checks can be cashed upon delivery when the
beneficiaries so desire. Alll salaries, pensions, and in fact payments of any
nature originating from the Service of Payments, are made by treasury
check, providing payees with a convenient, negotiable medium of payment,
and giving the treasury a formal and permanent record of each transaction.

Supplies
The central supply office, known as the Bureau of Supplies, continued as
a division of this organization to furnish stationery, office supplies and
equipment to the office of the Fiscal Representative and to the several
departments and services of the government. By concentrating purchases of
supplies in this manner, substantial economies are realized through being
able to buy in large quantities at commercial discounts. Furthermore, con-
centration in one organization makes it possible to standardize forms, carry
smaller inventories, and in general to fulfill the function of the office at a
lower cost to the government than would be the case if each government
department did its own buying.
Paper is the most important item among purchases by the Bureau of
Supplies. Paper of many grades is bought in large lots in commercial sizes,
and is cut by the Bureau to meet requirements. Orders for printed forms
are transmitted through the Bureau to the Government Printing Office for





HAITI: REPORT OF FISCAL REPRESENTATIVE


execution. Inventories of the hundreds of forms required by the govern-
ment services are kept in stock at all times. Requisitions for supplies are
filled promptly and at cost prices plus a small commission (3%, 5% or
10%) to cover the cost of administering and operating the Bureau. Since
the Director of the Bureau divides his work between administering the
Bureau of Supplies and work connected directly with the activities of the
Office of the Fiscal Representative, only half of his salary is charged to the
Bureau of Supplies.
The Bureau of Supplies is not operated to yield a profit. Commissions
charged are designed merely to cover operating and administration costs..
These costs amounted to Gdes. 21,242.63 in 1935-36, as against Gdes. 21,-
260.52 in 1934-35.
Gros sales totalled Gdes. 195,600.73 in 1935-36, compared with Gdes.
182,122.93 in 1934-35. The increase was due not to greater volume of pur-
chases but to the marked increase in prices for stationery and other office
supplies which took place during the year.
After deducting operating expenses from the gross profit of Gdes. 25,-
085.36 recorded in 1935-36, there remained a nominal profit of Gdes. 3,842.-
73 at the year-end. This compares with a net profit of Gdes. 105.66 in
1934-35.
Assets of the Bureau of Supplies at September 30, 1935, consisting chiefly
of inventories, amounted to the sum of Gdes. 187,757.04 on September 30,
1936, compared with Gdes. 185,444.41 on September 30, 1935. Receivables,
at Gdes. 11,337.38 on September 30, 1936, were sLightly higher than the
figure (Gdes. 9,083.82) recorded on Septenmber 30, 1935. Inventories were
valued at Gdes. 157,589.11 on September 30, 1936. and at Gdes. 161,076.63
on September 30, 1935. There were no liabilities at September 30, 1936,
leaving a surplus of Gdes. 187,757.04.

The Budget and Financial Legislation
The fiscal year 1935-36 was notably free from difficulties in the adminis-
tration of the budget -for that year, and in the preparation and final, ac--
ceptance of a balanced budget for 1936-37.
The 1935-36 budget on the whole was found to cover with reasonable
adequacy operating requirements of the government- during the year. To
be sure, certain appropriations were found to be deficient, and supple-
mentary appropriations totalling Gdes. 403,446.16 had to be created.during
the course of the year. Also, accruals to operating funds calculated on a
percentage basis, as in the case of the five per cent fund of this office, were
somewhat larger than the original budgetary appropriations for these pur-
poses, due to the-increase in revenues beyond budget ways and means.
These increases, less a number of compressions in budget appropriations
found possible during the year, carried net ordinary and' supplementary
budget appropriations from the sum of Gdes. 34,249,781.07 listed in the





HAITI: REPORT OF FISCAL REPRESENTATIVE


budget of expenditures as originally promulgated, to a net total of Gdes.
34,565,141.68. The latter figure compares with prior years, and with the
ordinary budget voted for 1936-37, as followss:
Ordinary and Supplementary
Fiscal Years: Appropriations:
Gourdes
1932-33............................................... 32,096,549.66
1933-34................................................ 32,863,794.84
1934-35.............................................. 34,049,501.55
1935-36.............................................. 34,565,141.68
1936-37 (ordinary budget)................ 33,237,546.87
It should be added here that extraordinary appropriations (funds es-
tablished for purposes not provided for in the budget), were as follows
during the four years ending in 1935-36:
Fiscal Years: Gourdes:
1932-33................................................ 2,911,947.42
1933-34............................................... 3,708,999.00
1934-35................................................ 2,822,795.04*
1935-36................................................ 2,215,999.87
The above figures are given simply to show the relation between bud-
getary appropriations for ordinary government operations and those ap-
propriations authorizing expenditures for extraordinary, or non-operating,
purposes. Ordinary and supplementary appropriations have tended to
increase in the four-year period indicated, whereas extraordinary appropri-
ations in total amount have decreased.
The new budget for 1936-37 in pmctically every respect provides as much
money for ordinary government operating expenses tinder the detailed
articles of the budget as did the budget of the prior year. That the budget
is more than a million gourdes less than the 1935-36 budget is due very
largely to the economies effected through extinction of the Series B bond
issue.
To permit a comparison between the two budgets, there is given below
a table showing original total appropriations for the two fiscal years, by
budget chapters, together with the respective increases and decreases in
appropriations:
Budget for Budget for
1935-36 193-37 Decreae
Budget Chapters Gourdes Gourdes Gourdes
Public Debt ........................ 8,802,063.00 7,593,218.80 1,208,844.20
Foreign Relations ................ 592,680.50 592,680.50 ..
Finance .............................. 3,001,221.00 2,918,721.00 82,500.00
Commerce ........................ 342,835.00 342,835.00
Interior .............................. 11,129,952.30 11,313,262.30 183,310.00t
Public Works...................... 4,109,700.00 4,081,900.00 27,800.00
Justice ................................ 1,412,106.00 1,407,306.00 4,800.00
Agriculture ........................ 1,670,534.77 2,010,819.97 340,285.20t
Labor .................................... 659,163.00 629,363.00 29,800.00
Public Instruction ............... 2,074,748.00 1,892,662.80 182,085.20
Religion .............................. 454,777.50 454,777.50 ....... ..
34,249,781.07 33,237,546.87 1,012,234.20
*This igure does not include the sum of Gdes. 5,000,000 representing the purchase price of the capital
stock of the Banque Nationals de la Ripublique d'Haitl.
tIncrease.





HAITI: REPORT OP FISCAL REPRESENTATIVE


The decrease under "Public Debt" was due to the fact that only Gdes.
575,000 had to be appropriated in 1936-37 for service of the "B" loan, as
against the sum of over Gdes. 1,800,000 which would have had to be
appropriated if the loan were to remain alive throughout the year. This
large saving, reduced in small part by slightly larger bond service pay-
ments required for the other two issues in accordance with the bond
contracts, produced the net economy indicated in the table.
Under the Department of Finance, net economies of Gdes. 82,500 were
due partly to a slight scaling down of appropriations for pensions, but
chiefly to the fact that with estimated ways and means conservatively set
at only Gdes. 33,240,000 (as compared with an estimate of Gdes. 34,250,000
in the 1935-36 budget), the appropriations for the operating funds of the
customs and internal revenue services, being based on percentages of
receipts, necessarily were fixed at lower figures.
The appropriation of Gdes. 6,831,108.00 in favor of the Garde d'Haiti
increased funds available to that service by Gdes. 150.000. This increase
simply reflects an increase in personnel already made effective. Another
change in the budget of the Department of the Interior increased avail-
abilities for secret police by Gdes. 30,000 in the new budget, while allo-
cations for public health were cut by Gdes. 19,800.
The net decline of Gdes. 27,800 in allocations for public works reflects
small reductions for personnel and purchases of supplies and equipment.
Under the Department of Agriculture, about half of the increase was
due to the transfer of rural schools, formerly. under the direction of the
Department of Public Instruction, to the administration of the National
Service of Agriculture. This change in administration was made effective
early in 1935-36. The remainder of the net increase in the allocation for
that department was due to an increase amounting to Gdes. 157,000 in
the appropriation for agricultural extension activities.
The decline recorded in the table above under the budget of the Depart-
ment of Public Instruction was due to the change already mentioned in
the administration of the rural schools.
On the whole, the new budget represents an improvement over the 1935-
36 budget, the outstanding change being, of course, the appropriation of a
a fairly large additional sum for agriculture. No compressions were made
which would interfere with government operations at their present scale.
It is to be regretted, however, that it has been seen fit to reduce again the
annual appropriation for public health. This vitally essential government
service has found great difficulty in operating within the limits of its
annual allocation. A supplementary appropriation in the amount of Gdes.
101,745.96 had to be created in September, 1936, to provide funds with
which to meet current obligations. A similar appropriation in the amount
of Gdes. 170,000 had to be granted the previous year. By scaling down-
Ward the expenses of less important government functions, it should be




HAITI: REPORT OF'FISCAL REPRESENTATIVE


found possible to allocate in future budgets a more adequate sum for
public health. The allocation for the postal service also is chronically
deficient.
Despite these defects, it may be safely said that the 1936-37 budget is
balanced. The ways and means estimate is quite conservative, and revenues
'at present estimates, it is hoped, may exceed total appropriations by enough
to provide operating funds to cover the deficiencies noted.
Aside from various customs measures already described in the section
on "Tariff Modifications", the fiscal year 1935-36 was almost devoid of
important new legislation or executive orders directly affecting revenues.
There were a number of excellent new laws and regulations affecting the
coffee trade, having for their purpose the enforcement of better coffee
*preparation. An executive order published January 6, 1936, similarly
provided penalties for the sale or transport of cotton containing discolored
fibers or foreign matter. A law published on October 21, 1935, increased
the duty on gasoline by Gde. 0.10 per gallon. Another revenue measure
was a law published February 6, 1936, which scaled upward the then
existing internal taxes on lard substitutes, vegetable oil, soap and matches
manufactured in Haiti.
Legislative sanction was not given during the fiscal year to any im-
portant new industrial concessions or other contracts affecting revenues or
business. Shortly after the close of the fiscal year, however, a contract
was sanctioned providing for the establishment at Port-au-Prince of a shoe
factory having certain specified privileges of an exclusive nature in Haiti
and contemplating the creation of an important industry not only for the
manufacture of shoes for the domestic trade, but also for export.
A law published February 10, 1936, rescinded the law of August 29,
1935, sanctioning the public works contract signed by the State and Mr.
Jules Jean-Baptiste Debachy August 23, 1935*, and declared' the contract
void because of non-performance.
A law published the same date authorized the government to contract,
in one or several operations, an external loan not to exceed $30,000,000
with a view to executing the program of economic equipment and final
retirement of the remaining bonds of the 1922 loan.

Currency
The gains in foreign trade and revenues in 1935-36 were not accompanied
by any marked increase in .money circulation. The fact that the import
trade, which gives the best measure of the volume of domestic business,
showed no increased activity, gives a reasonable explanation of why an
increase in currency circulation failed to result from the rise in export
values.

p For details regarding this contract, see Annual Report of the Fiscal Representative, fiscal year 1934-35
page 79.


I--





HAITI: REPORT OF FISCAL REPRESENTATIVE


Notes, subsidiary coins, and estimated United States currency in cir-
culation on September 30, 1936, and on September 30, 1935, are given
below:
Sept. 30, 1936 Sept. 30, 1935
Gourdes Gourdes
Notes of the Banque Nationale de la R6pu-
publique d'Haiti .................................... 6,910,883 6,660,705
United States currency (estimated)........... 2,200,000 2,125,000
Subsidiary currency.................................... 3,733,148 3,582,300
12,844,031 12,368,005

The circulation of notes of the Banque Nationale de la R6publique
d'Haiti, averaged over a number of years, reaches a peak in March when
cotton and sugar exports are added to the usually fairly heavy shipments of
coffee exported in that month. From that month, circulation diminishes
gradually, and reaches its lowest level in August in the middle of the "dead
season".
The fiscal year 1935-36 was no exception to the usual sequence, except
that note circulation did not reach its lowest point until September.
Averaged over the year, note circulation amounted to Gdes. 7,879,959
in 1935-36, compared with Gdes. 7,914,191 in 1934-35. Note circulation is
still far below'the average recorded in the boom period of five years ending
in 1929 when average circulation rose to Gdes. 13,581,258.

Banking and Credit
As in the case of currency circulation, banking operations in 1935-36
failed to reflect any increased business activity; and here again the failure
to show any noticeable reaction to a good coffee crop and a generally good
export year may be ascribed to the slump in imports and in retail trade.
Total loans and discounts of the two banking institutions doing business
in Haiti averaged Gdes. 6,370,311.33 during the fiscal year 1935-36, compar-
ed with Gdes. 6,362,868.53 in 1934-35. As an interesting comparison, loans
and discounts averaged Gdes. 15,717,631.01 in 1930-31, and Gdes. 11,184,-
437.23 in 1931-32.
Deposits in banks, on the other hand, increased. Excluding government
deposits in the Banque Nationale de la R6publique d'Haiti, average balances
on deposit in the two banks amounted to Gdes. 13,449,748.13 in 1935-36, as
against Gdes. 12,945,906.08 in 1934-35. Deposits were almost as high as
they were six years ago, when they reached an average of Gdes. 14,442,-
504.20.
The plan of facilitating the granting of loans to small borrowers an-
nounced in the last Annual Report of this office was carried out by the
enactment in February, 1936, of a law authorizing the Banque Nationale
de la R6publique d'Haiti to lend to government employees at rates of
interest not exceeding 12 per cent per annum. Loans not exceeding the
amount of one month's salary are guaranteed by the government through




HAITI: REPORT OF FISCAL REPRESENTATIVE


its undertaking not to fill vacancies where the person leaving government
employ for any reason has failed to pay notes due the bank. The amount
which otherwise would have been paid to the employee as salary is paid to
the bank, up to the amount due the bank.
This method of extending personal loans to salaried employees, although
it might be considered somewhat unorthodox as commercial banking
practice in larger countries, nevertheless supplies a definite need in Haiti
where government employees represent by far the largest class of salaried
workers-a class which chronically has been the chief prey of unscrupulous
money-lenders.
In a further endeavor to eradicate abusive practices by money-lenders,
a usury law was published on March 9, 1936, establishing the maximum
legal rate of interest at 12 per cent, and providing penalties for infractions.
While usury laws give little help to those unwilling, or too incompetent,
to protect themselves, they do, if effectively drafted, act as a deterrent to
those money-lenders who operate openly in violation of all the principles
of social order. If justice is actively administered with the necessary
cooperation of the public under the new usury law, the infliction of just
penalties for infractions will go far to create among borrowers an under-
standing of the civil rights and legal protection to which they are entitled.

Claims
There is little of importance to report regarding the settlement of claims
during the fiscal year 1935-36. No new claims of any great importance
came up for consideration during the year. One long outstanding claim,
involving a disbursement of Gdes. 39,437.50, was liquidated during the
year. The balance of Gdes. 51,696.88 disbursed from the regular budgetary
appropriation for settlement of claims, restitution of over-payments, and
pension adjustments, was composed of nearly forty individual items of
which the largest was in the sum of Gdes. 15,000, with the majority of the
remaining payments consisting of small amounts of less than Gdes. 1,000
each.
Haiti for some years past has been in the fortunate position of having
no floating debt of any consequence represented by adjudicated claims,
unpaid awards or contingent items of similar nature. Claims for damages
and restitutions inevitably arise, but in recent years the annual budgetary
appropriation for the settlement of such current claims has been adequate
to permit liquidation of all justifiable charges against the government.
The large floating debt which had accumulated twenty years ago was
entirely liquidated in the years following the flotation of the 1922 loan.
Cash awards from the proceeds of the Series A issue, awards in the form
of bonds of the "B" issue, and finally the exchange of Series C bonds for
bonds of the National Railroad Company of Haiti, the unpaid interest and
amortization on which had been unconditionally guaranteed by the Haitian





HAITI: REPORT OF FISCAL REPRESENTATIVE


government, and was to be met by annual payments, cleared up most of the
floating debt. Subsequently, new contracts entered upon with the P.C.S.
Railroad and the National Railroad Company of Haiti brought an end to
the period of uncertainty as to the final amount of the floating debt. Fur-
thermore, the reestablishment of peace and tranquility, the formation of a
well ordered and progressive government, and the confidence and satis-
faction of the people in the government, make it very unlikely that
obligations, such as those which in the past led to large pecuniary awards,
will so far as can be foreseen again be incurred. In large part, the fact that
new and perplexing problems of this nature no longer arise is due to the
competence of the administrative officers of the government, and to the care
and sense of responsibility with which new obligations are assumed. If the
function of government is properly performed, if the legal aspects of
contracts and obligations assumed and-the financial ability of the State
to carry out those obligations are given proper consideration, there need
be little fear in the future of the creation of a floating debt such as that
which in the past has been a heavy burden on the government.

Personnel

Mr. D. A. Witcomb, an American member of the staff of this office, died
suddenly on February 2, 1936, after a brief illness. He was 38 years old
at the time of his death.
Mr. Witcomb joined the service in November 1929, as an assistant in
the Customs Audit Section of the Head Office.- His ability gave him quick
promotion, and he served successively in various executive capacities in
the customs service. At the time of his death, he was Resident Inspector
of Customs at Port-au-Prince, in charge of all customs inspection in that
city as well as in the customs district which includes the ports of Jacmel,
Petit GoAve and Miragoine.
Mr. Herwick Pressoir, for many years chief of the Parcel Post Section
of the Port-au-Prince custom house, died on December 10, 1935, at the
age of 72 years. He first was employed at customs work at Jacmel in 1915.
From 1917 until the time of his death he served continuously at the Port-au-
Prince custom house.
On the American staff, the organization lost the services, through resig-
nation, of Captain John Davis. Captain Davis had served since October 1,
1929, as Captain of thePort of Port-au-Prince and Surveyor General of
Customs. Through his knowledge and long experience in maritime matters
he brought efficient aid to this organisation and to the Haitian government
in a post of responsibility. It is fitting to recall here that Captain Davis
holds many decorations for distinguished service, among them the highest
decoration of the American government. Some years ago he received a
medal from the Compagnie G6enrale Transatlantique for the efforts he made,
at the risk of his life, in saving the French ship Caracoli, afire in Port-au-





HAITI: REPORT OF FISCAL REPRESENTATIVE


Prince harbor. Later, he rendered notable service to the Dominican govern-
ment after the hurricane of 1930. These incidents are typical of his long
and, active career, during which eight years of distinguished service were
devoted to the Haitian government. His retirement from active duty is a
loss both to this office and to the government.
In recognition of his services to the Haitian government, His Excellence
the President of the Republic in December, 1934, conferred upon Captain
Davis the "Honor and Merit" order of the Repuiblic.
Mr. Leo H. Gardiner, formerly employed at the Port-de-Paix custom
house, was appointed to the post of Assistant Director of Customs at Port-
au-Prince in February, 1936. Mr. Gardiner had been on temporary duty
at Port-au-Prince since July, 1935.
Customs officials who left the service during 1935-36 included Mr. E.
Thrasybule, Mr. G. Labrousse, and Mr. Paul Rouzier. Otherwise, there
were no important changes in personnel.

Conclusion
This report has given the record of a year which on the whole was free
of any startling new developments in commerce and finance-a year when
revenues and commerce may be considered as being about average; when
agricultural production for export has continued upward; and when a
certain amount of progress in economic development has been recorded.
If there was disappointment and anxiety during part of the year in the loss
of what had been the most important Haitian outlet for coffee exports, that
feeling now is tempered by the fact that a new market has been entered
successfully, making the Republic largely independent of the economic and
political forces which continually threaten trade relations with Europe.
Revenues have held up well. The public debt, through full payment as
usual of all debt charges, has again been reduced until now we can clearly
foresee the time when the present debt will no longer exist. In fact, the
internal debt, which sixteen years ago was calculated at more than Gdes.
50,000,000, already has been extinguished. In the normal course of events,
and if no new debt is created and no refunding operation should mean-
while intervene, we can expect to see Haiti become in a very few years one
of those few and fortunate nations which have no public debt.
In the trying years of world depression the Republic was not only extra-
ordinarily successful in avoiding much of the financial stress in which so
many nations became involved, but it made material progress in bringing
"to its people some real measure of the economic and social betterments in
which the country long had been deficient.
To keep its people from feeling too severely the effects of world de-
pression it has expended many millions of gourdes from treasury reserves
and from surplus revenues. It has assimilated thousands of its citizens
repatiated from neighboring countries because of less favorable economic




HAITI: REPORT OF FISCAL REPRESENTATIVE


conditions in those countries. It has built irrigation and drainage systems;
it has constructed new roads, bridges and public buildings. It has not only
maintained, but it has in many ways expanded or improved the economic
and social equipment of the country.
To bring about the needed lifting of the standard of living the govern-
ment has exerted itself constantly to promote greater diversification and
volume of agricultural production. In this it already has made remarkable
progress. Not only has export production of leading commodities shown
a steady rising trend, but new products, particularly bananas, have been
added to the export list.
There has been considerable apprehension because the development of
the banana industry has not been in accordance with expectations-expec-
tations which were justified by the contractual provisions under which the
company entered Haiti. Certainly, the export of fruit has not, and cannot,
attain the figures contemplated, within the time estimated. Entry into a
country completely unexplored, in so far as soil analysis, wind intensity
and water availabilities for irrigation, are concerned, is not an easy matter;
and when to these important factors is added one of the multiplicity of
small land holders, it is indeed difficult to estimate the time element accu-
rately. The driving of artesian wells along the north coast has met with
success and with failure about equally divided;'and the destruction of hopes
of proprietors of land where water has not been found has been balanced by
the confidence and satisfaction of the favored who have had successful wells
driven in the vicinity of their properties. There are no great tracts of land
available for large plantations. In the Artibonite Valley, signatures neces-
sary for producers' contracts, leases, etc., respecting banana land have
averaged more than one signature per acre of land secured. The history
of other banana producing countries proves conclusively that successful
production automatically assures a progression which accelerates up to the
limit of potential profitable production. Therefore, delays in the experi-
mental period cannot be taken as a criterion of the future progress of the
industry. It is believed that Haiti is to become one of the important banana
producing countries and that the fruit company will ultimately provide the
cooperation which will accomplish a remarkable economic change in the
Republic. The fact remains that several millions of gourdes, represented
by new capital investment and by sales of fruit, already have entered Haiti.
It is reported that the company' investigation of potential banana land to
date has revealed that no less than 70,000 acres of land are suitable for
banana cultivation. An average yield of 265 payable stems per year per
acre, which the company estimates as entirely possible, should eventually
produce 18,550,000 stems of bananas per year from this acreage.
The banana development, however, is only one feature-although with
coffee it is potentially, of course, the most important one-of an agricultural
program which recently has added coconuts, amberseed, divi-divi and pea-
nuts to the products now being extensively cultivated in Haiti. The peanut




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