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.,
Physical Description:
Mixed Material
Publisher:
Port-au-Prince, Imprimerie de l’Etat, 1935-.

Notes

General Note:
4-trUS-1933-40
General Note:
Hollis 005938280

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University of Florida
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ILLMC
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LLMC31883
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HAITI

ANNUAL REPORT
OF THE

FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER 1936-SEPTEMBER 1937











SHAITI



ANNUAL REPORT

OF THE


FISCAL REPRESENTATIVE


FOR THE FISCAL YEAR


OCTOBER, 1936 SEPTEMBER, 1937




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'Etat
PORT-AU-PRINCE, HAITI


r-:
i

i/





CONTENTS


Pages
Foreign Commerce.................................................... ..................................... 4
Origin of Imports.................................................................................................. 6
Destination of Exports.................................................. ................................ 10
Balance of Trade............................................................................................. 14
Ports of Entry for Imports................................................ ........................... 17
Ports of Shipment for Exports........................................... ......................... 18
Shipping .......................................... ................. ............................................ 19
Freight Rates ........................................................ ............................... 22
Tourist Trade........................................................ ................................. 27
Foreign Commerce by M onth............................................... ........................ 28
Commodities Imported................................................... ................................ 29
Commodities Exported................................................ ................................... 35
Coffee .................:............................................................................ ... 37
Cotton ......................................................................................................... 44
Sugar .......................................................................................................... 46
Sisal .......................................... ................. .......................................... 48
Bananas ........................................ ................ ....................................... 49
Other Exports .............................................................................................. 52
Commercial Conventions ................................................................................... 54
Tariff M modifications ......................................................... .............................. 57
Customs Administration ................................................... .......................... 59
Internal Revenue Inspection Service........................................ .................... 63
Government Revenues ..................................................... ............................. 64
Total Revenues.................................................... ................................... 64
Customs Receipts ..................................................... .............................. 66
Internal Revenue Receipts........................................................................ 68
M miscellaneous Receipts............................................. .............................. 72
Receipts from Communes............................................. .......................... 74
Government Expenditures .................................................... ......................... 74
Customs Service.................................................... ................................. 80
Internal Revenue Service.......................................... ............................. 84
Treasury Position................................ ................. .......................................... 85
Public Debt ............................................................. ..................................... 91
Service of Payments............................................... ......................................... 93
Supplies ............................................................ ............................................. 96
The Budget and Financial Legislation................................... ........................ 97
Banking and Credit.............................................................................................. 104
Currency ......................................................................................................... 105
Claims ............................................................................................................. 106
Personnel ............................................................. ........................................ 108
Conclusion ........................................................................................................ 110
Tables ................................................................................................................. 113
Annex: Report of the Inspector General, Internal Revenue Inspection Service.... 153
Expenditures ................................................................................................ 155
Personnel .................................................................................................... 156
Internal Revenue Receipts............................................................................ 156
Conclusion .................................................................................................... 158
Tables ........................................ .................. ........................................ 159
Appendix: Schedules............................................................................................ 165




IV STATISTICAL EXHIBITS
TABLES
Pages
1. Value of Imports and Exports, and Excess of Imports or Exports, fiscal
years 1916-17 to 1936-37........................................................................ 115
2. Value of Imports showing countries of origin in percentages, fiscal years
1916-17 to 1936-37................................................................................ 115
3. Value of Exports showing countries of destination in percentages, fiscal
years 1916-17 to 1936-37........................................................................ 116
4. Value of Total Foreign Commerce by countries in percentages, fiscal years
1916-17 to 1936-37.................................................................................... 116
5. Value and Percentages of Value of Imports, Exports and Total Foreign
Commerce by countries, fiscal year 1936-37........................................... 117
6. Value of Imports by Ports of Entry, fiscal years 1916-17 to 1936-37........ 118
7. Value of Exports by Ports of Shipment, fiscal years 1916-17 to 1936-37 118
9. Net Tonnage of Steam and Motor Vessels in Foreign Commerce Entered
by Registry and Months, fiscal year 1936-37........................................... 119
10. Net Tonnage of Sailing Vessels in Foreign Commerce Entered by Registry
and M months, fiscal year 1936-37.............................................................. 120
11. Value of Imports by Registry of Carrying Vessels, fiscal year 1936-37.... 121
12. Value of Exports by Registry of Carrying Vessels, fiscal year 1936-37.... 122
13. Value of Imports by Months and Ports of Entry, fiscal year 1936-37
com pared w ith 1935-36............................................................................ 123
14. Value of Exports by Months and Ports of Shipment fiscal year 1936-37
com pared w ith 1935-36................................................... .................. 124
15. Value of Imports by Commodities, fiscal years 1916-17 to 1936-37........ 125
16. Quantity of Imports by Commodities, fiscal years 1916-17 to 1936-37.... 126
17. Value of Exports by Commodities, fiscal years 1916-17 to 1936-37........ 127
18. Quantity of Exports by Commodities, fiscal years 1916-17 to 1936-37.... 127
19. Quantity and Value of Five Principal Exports by ports, fiscal year 1936-37
compared with 1935-36............................................................. 128
20. Percentages of Value of Exports by Commodities, fiscal years 1916-17
to 1936-37 .................................... .... ................... 129
21. Quantity and Value of Exports by Commodities and Months, fiscal year
1936-37 ..................................................... ..................... ........... ........ 130
22. Operating Fund of the Fiscal Representative, fiscal years 1916-17 to
1936-37 ......................................... ..... 131
23. Expenses of Fiscal Representative by Objects of Expenditures, fiscal years
1916-17 to 1936-37................................................... 131
24. Classification of total Expenditures of the Fiscal Representative, fiscal year
1936-37 ......................... .......................................... .................. 132
25. Classification of Administration and Operation Expenditures of the Fiscal
Representative, fiscal year 1936-37.............................. ........... 132
26. Distribution of Expenditures from the Operating Fund of the Fiscal
Representative, fiscal year 1936-37.................................. 133
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 1936-37................................................... ........................ 134
28. Total Cost of Collecting each Gourde of Customs Receipts, fiscal years
1919-20 to 1936-37........................... ........... 135
29. Operating Allowance of Internal Revenue Service, fiscal years 1923-24
to 1936-37.. .................... .................... .......... ............. 135
30. Revenues of Haiti by Sources, fiscal years 1889-90 to 1936-37................ 136
31. Relation between Import and Export Values and Customs Receipts, fiscal
years 1916-17 to 1936-37.... ......................................... 137





STATISTICAL EXHIBITS


Pages
32. Customs Receipts by Months, fiscal years 1916-17 to 1936-37................... 137
33. Customs Receipts by Ports, fiscal years 1916-17 to 1936-37................... 138
34. Customs Receipts by Sources and Ports, fiscal year 1936-37................... 139
35. Customs Receipts by Sources and by Months, fiscal year 1936-37............ 139
36. Distribution of Customs Receipts, fiscal years 1916-17 to 1936-37........ 140
37. Miscellaneous Receipts by Sources and Months, fiscal year 1936-37........ 140
38. Total Receipts of the Haitian Government by Sources, Months, and Ports,
fiscal year 1936-37.................................................................................. 141
39. Ordinary, Supplementary and Extraordinary Appropriations from Revenue,
Fiscal years 1934-35 to 1936-37......................................................... 142
40. Revenues and Expenditures, fiscal years 1934-35 to 1936-37................... 143
41. Functional Classification of Expenditures, fiscal year 1936-37............. 144
42. Classification of Total Expenditures by Departments and Services, fiscal
year 1936-37......................................................................................... 145
43. Classification of Administration and Operation Expenditures by Depart-
ments and Services, fiscal year 1936-37....................................... ............ 146
44. Reimbursements to Appropriations, fiscal years 1933-34 to 1936-37........ 147
45. Receipts and Expenditures, fiscal year 1936-37........................................... 148
46. Revenues and Expenditures and Excess of Revenues or Expenditures, fiscal
years 1916-17 to 1936-37..................................................................... 149
47. Treasury Assets and Liabilities.................................. ............................. 149
48. Public D ebt .................................................................................................. 150
49. Expenditures from Revenue for the Public Debt and Relation of such
Expenditures to Revenue Receipts, fiscal years 1935-36 to 1936-37........ 150
50. Profit and Loss Statement, Bureau of Supplies, fiscal year 1936-37............ 151
51. Balance Sheet, Bureau of Supplies............................................................ 151
52. Notes of the Banque Nationale in Circulation by Months, fiscal years
1919-20 to 1936-37...................................... ................ 152
53. Loans and Deposits of Banks in Haiti by Months, fiscal year 1936-37.... 152
CHARTS
1. Value of Total Imports and Total Exports, by Months, fiscal years 1929-30
to 1936-37 ........................................................ ............................... 28
2. Quantities of Leading Commodities Exported and Imported, fiscal years
1916-17 to 1936-37.................................................................................. 33
3. Average Coffee Prices, F.O.B. Haitian ports, fiscal years 1916-17 to
1936-37 ........................................................... ................................ 41
4. Quantities of Bananas Exported, by Months, fiscal years 1931-32 to
1936-37 ............................................................................................... 51
5. Total Revenue Receipts of Haiti and Expenditures from Revenues, fiscal
years 1916-17 to 1936-37.................................................................. 65
ANNEX: INTERNAL REVENUE SERVICE
TABLES
L Internal Revenue Receipts by Sources, fiscal years 1934-35 to 1936-37.... 161
2. Internal Revenue Receipts by Collection Prefectures, fiscal years 1934-35
to 1936-37 ................................................................................................ 162
3. Internal Revenue Receipts by Sources and Prefectures, fiscal year 1936-37 163
4. Internal Revenue Receipts by Sources and Months, fiscal year 1936-37.... 164
APPENDIX: SCHEDULES
1. Quantity and Value of Imports into Haiti by Countries of Origin........... 167
2. Quantity and Value of Exports from Haiti by Countries of Destination.... 198
3. Customs Receipts by Sources, by Ports and by Months, fiscal year 1936-37 206





















HAITI
ANNUAL REPORT OF THE FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER, 1936 SEPTEMBER, 1937









HAITI
ANNUAL REPORT OF THE FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER, 1936 SEPTEMBER, 1937

OFFICE OF THE FISCAL REPRESENTATIVE
Port-au-Prince, Haiti, December 1, 1937.

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 twenty-first annual report on
the commerce and finances of the Republic of Haiti. The report covers
the fiscal year ending September 30, 1937, 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.
Despite a poor coffee crop, government revenues in the fiscal year 1936-
37 were only Gdes. 149,693.14 less than the sum of Gdes. 34,598,364.33
collected the previous year, when' an excellent coffee crop had been har-
vested.
Government expenditures from revenues, totalling Gdes. 35,033,437.11,
exceeded revenue receipts by Gdes. 584,765.92. 'This is a substantial re-
duction from the deficit of Gdes. 2,033,209:70 recorded the previous year.
The small deficit in 1936-37 was met entirely from cash resources of the
treasury.
In past years, a coffee crop as disappointing as last season's harvest inva-
riably brought with it greatly diminished volume of foreign trade, busi-
ness stagnation, and low government revenues. Invariably, government
receipts in poor crop years have been several million gourdes less than
government expenditures. This happened in 1920-21; again, in the two
mid-depression years (1930-31 and 1931-32); and more recently in 1934-
35, when the coffee crop was even smaller than in 1936-37.
That business and government revenues were not similarly affected in
the past fiscal year, was due to the following factors:
First,'a vigorous demand for imported goods continued throughout the
year. In value, the import trade in 1936-37 exceeded the total for the pre-




HAITI: REPORT OF FISCAL REPRESENTATIVE


vious fiscal period by 21.5%. Activity in importing was possible in a poor
coffee year chiefly because in the.preyious fiscal period exports in value
had exceeded imports. The favorablee" balance of trade in 1935-36 had
amounted to over nine million gourdes.
Secondly, export commodities (other than coffee) quantitatively made
an excellent showing in 1936-37. Sisal and banana exports set new high
records for quantities shipped. The cotton crop was only slightly under
the previous year's crop, despite further boll weevil damage. Sugar ex-
ports, in quantity, were only slightly under the previous year's total.
SThirdly, commodity prices showed general improvement. Coffee prices
averaged sixteen per cent higher than in the previous year, compensating
to some extent for the deficiency in quantities exported. Higher cotton
prices made the 1936-37 crop of greater value than the 1935-36 crop,
although the latter crop was larger in .size. In value, sugar production
reached a higher figure than in any previous year since 1919-20. Sisal
prices continued to rise during most of the year. Cacao exports, in value,
were nearly double the 1935-36 total. Contract prices paid to banana pro-
ducers were raised by agreement between the government and the fruit
company. Logwood shipments, in value, have not been higher since 1934-
35. Minor export products for the most part registered similar gains.
The combined effect was a rise of nearly six million gourdes in the value
of total foreign commerce in 1936-37, when comparison is made with the
previous year. The export trade in value was 5.05 per cent under the
1935-36 total, although coffee exports (representing more than half of
total exports) dropped by 20.29 per cent in value. The import trade, with
prices higher and retail buying still active, recorded a 21.51 per cent gain
in value.
The balance of trade showed an excess of imports amounting to Gdes.
1,221,210. This adverse trade balance is small, however, considering that
total commerce was valued at Gdes. 90,930,110.
Government revenues derived from the duties on. exports were Gdes.
3,307,781.34 less (than in 1935-36. This drop was due entirely to the small
coffee crop and hence reduced income from the specific duties on coffee.
Revenues from the import tariff, on the other hand, rose by Gdes.
3,188,914.45 from the 1935-36 total of Gdes. 17,470,978.61. The gain in
the import trade, therefore, produced revenues which nearly compensated
for the drop in receipts from the export duties.
Internal revenue receipts were Gdes. 269,246.58 greater than in 1935-36,
a gain of 5.7 per cent.
That total revenue receipts of the government declined, in a poor coffee
year, by only Gdes. 149,693.14, was not due, however, entirely to the gains
in the import trade and to gains in exports of commodities other than
coffee. To maintain the budget in balance it was found necessary during
the year to supplement revenues by means of increased duties and taxes.





HAITI: REPORT OF FISCAL REPRESENTATIVE 3

An increase in the tax on cigarettes produced most of the gain in internal
revenues. Duties on gasoline imports were raised by Gde. 0.05 per gallon.
The surtax on import duties was raised to 10 per cent from 5 per cent.
While revenues in 1936-37 were maintained practically level with reve-
nues in the previous year, government expenditures from revenues were
reduced. Expenditures f r o m revenues in 1936-37 totalled Gdes.
35,033,437.11, or Gdes. 1,598,136.92 less than in 1935-36. Of this reduc-
tion, Gdes. 1,243,398.06 represented decreased expenses for debt service,
due to the retirement in October, 1936, of all remaining bonds of the Series
B, or internal issue. Since most of these bonds had been 'retired the pre-
vious year, only Gdes. 539,803.62 were needed in the 1936-37 budget to
complete the operation. Retirement of the internal debt relieves the budget
of an annual charge exceeding Gdes. 1,800,000.
Fulfilment of contractual payments for service of the public debt reduced
the gross debt of the Republic on September 30, 1937, to Gdes.
44,317,295.95. This compares with Gdes. 49,092,715.80 on September 30,
1936.
The excellent record of the Haitian government with respect to service
of its public debt was reflected in the market price of its bonds. Quotations
on the New'York Stock Exchange rose to a high of 101 3/8 in August, 1937.
High prices for Series A bonds made it impossible to utilize all sinking fund
money by purchases in the open market at par or better within the con-
tractual time limit. Accordingly, bonds having a nominal value of $309,500
were called for redemption by the fiscal agent of the loan in July, 1937.
This was the first time that Haitian bonds had been called in this manner,
since 1928.
Because of the deficit in government fiscal operations in 1936-37, which,
as we have seen, was met entirely by treasury reserves, the unobligated
treasury surplus was reduced by approximately the amount of the deficit
(Gdes. 584,765.92). The unobligated surplus amounted to .Gdes.
1,383,246.39 at September 30, 1937, as against Gdes. 1,915,860.34 at' Sep-
tember 30, 1936.
A much larger deficit the previous year had reduced the unobligated
treasury surplus by Gdes. 1,951,237.47, from Gdes. 3,867,097.81 as of Sep-
tember 30, 1935.
Although operations during the past year have reduced cash reserves,
there is some satisfaction to be had in the fact that the drain on cash was
so small in a year when the coffee crop was far below average in size.
It will be recalled that the past fiscal year began with the coffee trade
still in doubt as to whether or not it could sell all of the coffee crop. These
doubts quickly disappeared when it became evident that other countries,
particularly the United States and Italy, would readily'buy coffee which
could not be sold in France., The closure of the French market did not have
the disastrous consequence that the coffee trade had feared. On the con-




HAITI: REPORT OF FISCAL REPRESENTATIVE


irary, as we. have seen, the 1936-37 crop was completely disposed of, and at
prices which averaged sixteen per cent higher than the average price of the
1935-36 crop. OQte large market, Italy, has been regained, and a complete-
ly'idw 6iitlet, the United States; has been opened to Haitian quality coffee.
SThe coffee trade has profited by the forced change in marketing practices.
It has learned that the preparation of Haitian coffee must be improved
if it's to cbnipete successfully inr world-markets. The coffee trade already
has'improved its methods of curing,-grading, and marketing coffee. From
a mediocre product, it has developed a quality coffee which,; it is believed,
will soon have a preferred place among "mild" coffees.
Thus, -in a year and a half a revolutionary change has taken place in
the Haitian coffee trade. Coming before the recent collapse of Brazilian
coffee valorization and unparalleled destruction of coffee values, the change
has'given the domestic industry some measure of security where. only
disaster otherwise would have been encountered.

Foreign Commerce

The foreign commerce of Haiti has increased steadily in value during
each of the past three years. Exports and- imports together were valued
at Gdes. 76,790,826 in 1934-35. From that figure, foreign commerce values
rose to Gdes. 85,159,220 in 1935-36, and to Gdes. 90,930,110-in the fiscal
year under review.
The rise in foreign commerce values in 1936-37, when comparison is
made with the previous year, amounted to Gdes. 5,770,890, or 6.78 per
cent. In value, total foreign commerce in 1936-37 was 23.86 per cent higher
than-the mid-depression low of Gdes. 73,411,945 recorded in 1931-32.
Although the trend has been upward, there remains much ground to be
gained before th'e money value of Haiti's trade approaches the figures
recorded in the last high period. In 1927-28, total foreign commerce reached
a high point of Gdes. 214,577,513,-or more than double the 1936-37 figure.
The gain noted during the past year was due entirely to a pronounced
increase' in the import trade. Imports increased in value from Gdes.
37,920,626 in 1935-36 to Gdes. 46,075,660 in 1936-37. The gain amounted
to Gdes. 8,155,034, or 21.51 per cent.. The export trade, on the other hand,
declined in value by Gdes. 2,384,144, or by 5.05 per cent, from the 1935-36
figure' of Gdes. 47,238,594. -
That imports gained in a year when the value of exports dropped off
was due' primarily to the heavy surplus of exports over imports during the
preceding year. In that year the excess of exports over imports amounted
to Gdes. 9,317,968, creating purchasing power for imported commodities
which was applied to the acquisition of foreign goods during the subse-
quent year. Importing was further sustained in the latter part of 1936-37
by prospects of a good coffee harvest in the subsequent crop year.





HAITI: REPORT OF'FISCAL REPRESENTATiVE


In the last analysis, business iri' 1936-37 was simply taking up some of
the slack of the previous twelve months, when importing had been tempo-
,rarily retarded by a number of factors. Among these were: 1) the denun-
ciation of the Haitian-French commercial treaty, creating some business
uncertainty throughout 1936; and 2) the law regulating retail trade, which
necessitated a period of business adjustment.
By the beginning of 1937 it had become evident that all the coffee crop
could be sold advantageously, regardless of the French market. Moreover,
the retail trade had quickly adjusted itself to the new regulations. Import
purchasing therefore continued throughout the year at a higher level than
the previous year.
Exports were, of course,.restricted by the small coffee crop of the 1936-37
season. Nevertheless 'the decline of only 5 per cent in export values was
remarkably small, considering that the coffee crop was one of the poorest
on record in recent years, and that in value it was nearly six million gour-
des under the value of the previous year's crop. The explanation lies in
advancing export commodity prices during the year and gains in the value
of export products other than coffee.
As usual, the United States in 1936-37 participated to a greater extent
in Haitian foreign commerce than any other country. Imports from, and
exports to, the United States in 1936-37 were valued at Gdes. 35,993,656,
or 39.56 per cent of total foreign commerce. The United Kingdom was in
second place, with 16.98 per, cent of the total, and France was third with
9.27 per cent.
In the previous year, the American share, had been only 33.04 per cent of
the total, with France in second place (28.52 per cent) and the United King-
dom in third place (13.99 per cent). Loss of the French coffee market,
causing an abrupt change in the direction of coffee exports, was the leading
factor in increasing the predominance of the United States in Haitian fo-
reign commerce.
Not since 1927-28 had the United States handled so large a portion of
Haitian trade. In that year the United States had accounted for 39.85 per
cent of the total: But imports from that country, rather than exports, had
given the United State its predominant position in 1927-28. -In the inter-
vening years purchases of American goods steadily diminished, while sales
to the United States increased.
The contrary occurred in the case of Haiti's foreign trade with France.
The latter country's share of total trade since 1927-28, and until the last
fiscal 'year, had varied between 21.30 per cent' and 32.33 per cent. In
1936-37, this participation dropped to 9.27 per cent, making Fr,aace third
in importance, after the United States and the United Kingdom. French
purchases of coffee ard other Haitian exports dropped in value by' 67 per
cent. French sales to Haiti 'dropped by 44 per cent.





.5 HAITI: REPORT OF FISCAL REPRESENTATIVE

Origin of Imports
The United States in 1936-37 continued to be the leading supplier of
imported commodities; but the American share of total imports declined
from 56.47 per cent in 1935-36 to 50.98 per cent in 1936-37.
During the past ten years, the American share of the import trade has
been as follows:
Fiscal Years Per Cent Fiscal Years Per Cent
1936-37................... 50.98 1931-32.................. 67.58
1935-36................... 56.47 1930-31................... 68.69
1934-35.................... 48.39 1929-30.................... 70.09
1933-34.................... 48.39 1928-29................. 69.85
1932-33.................. 62.22 1927-28................... 75.30

Thus, American sales to Haiti in 1936-37 resumed the steadily downward
trend observed during the above period. The only notable break in this
decline occurred in 1935-36 when American exporters of cotton goods
recovered part of the market which had been lost to Japan during the
previous two years. Japan since then has retained an important share of
the textile market. Meanwhile, British cotton goods exporters have been
successful in bringing about a substantial rise in their sales to Haiti.
In order of importance, the countries supplying imported commodities
to Haiti in 1936-37 were the United States, the United Kingdom, Germany,
Japan, Belgium and France. These six countries alone furnished 88.01
per cent of total imports in that year, compared with 89.08 per cent during
the previous year. Of these countries, the first four remained in the same
order of importance in both years. In 1936-37, however, France lost its
position as fifth in importance to Belgium.
However, the most striking change in the direction of the import trade
in 1936-37 was not the decline in purchases from France but the rising
importance of British goods among commodities purchased abroad.
The British share of the import trade amounted to .17.81 per cent in
1936-37, compared with an average of only 8.69 per cent during the pre-
vious ten years. Gains have been recorded during each of the past three
fiscal years. Imports of British goods comprised 9.16 per cent of total
imports in 1934-35 and 12.63 per cent in 1935-36. If imports from Canada
and other parts of the British Empire are included iki the total, the share
amounted to 20.67 per cent in 1936-37, compared with 15.87 per cent in
1935-36.
Purchases of goods from the British Empire in value reached a total of
Gdes. 9,529,105 in 1936-37. This compares with sales valued at Gdes.
7,618,010 during the same period. Imports from the United Kingdom
alone were valued ,at Gdes. 8,205,856 and exports at' Gdes. 7,243,690.
The Haitian import trade as a whole in 1936-37 increased in value by
Gdes. 8,155,034, or by 21.51 per cent when comparison is made with the
previous fiscal year. Imports from the United Kingdom during the same





HAITI: REPORT OF FISCAL REPRESENTATIVE


period increased in value from Gdes. 4,787,708 in 1935-36 to Gdes. 8,205,856
in 1936-37, indicating a gain of Gdes. 3,418,148, or 71.4 per cent.
The principal imports from the United Kingdom are cotton goods
(especially cotton prints, and dyed piece goods), other textiles, comnnon
soap, agricultural implements, tires and woolen goods. In the more im-
portant categories of cotton goods, the value of imports from the United
Kingdom increased from Gdes. 2,686,636 in 1935-36 to Gdes. 5,761,695
in 1936-37, or by 114.5 per cent. Soap imports remained practically sta-
tionary (Gdes. 1,315,588 in 1936-37 and Gdes. 1,320,955 in 1935-36). Im-
ports of British made coffee machinery and agricultural implements,
valued at Gdes. 234,353 in 1936-37, were nearly double the 1935-36 figure.
The United States .and England each supplied 36 per cent of Haitian
imports of cotton textiles and other cotton goods received in 1936-37. In
the previous year, 45 per cent of cotton goods' had been of American origin
and 27 per cent of British origin. Japan's share declined from 23 per cent
in 1935-36 to 20 per cent in 1936-37.
Although the United States in 1936-37 became less important as a fur-
nisher of the chief import commodity, imports from the United States
nevertheless increased in value. Imports of American origin were valued
at Gdes. 23,491,902 in 1936-37, compared with Gdes. 21,416,082 in 1935-36.
The gain amounted to Gdes. 2,075,820, or 9.7 per cent. We have seen that
the import trade as a whole, however, increased by 21.51 per cent.
The United States in 1936-37 remained the principal supplier of impor-
tant articles of domestic consumption such as wheat flour,* meats, butter,
milk, canned foodstuffs, automobiles, trucks and other vehicles, chemical
and pharmaceutical products, patent medicines, glassware, electrical ap-
pliances, leather goods, kerosene, fuel oils, lubricating oils, cigarettes, cut
tobacco, building materials (except cement) and machinery.
Aside from the textile group, the most important gains recorded in sales
of American merchandise to Haiti were: fuel oil (up Gdes. 298,217 in
value of imports); gasoline (up Gdes. 84,480); lubricating oil (up Gdes.
45,589); sugar machinery (up Gdes. 147,879); miscellaneous machinery
(up Gdes. 175,625); cigarettes (up Gdes. 124,015); motor trucks (up Gdes.
134,844); steel sheets (up Gdes. 100,016); and soap (up Gdes. 75,019).
Other imports, where gains ranging up to Gdes. 50,000 were recorded, in-
cluded: structural steel; manufactured brass articles; lard; electrical
appliances (exclusive of radios); lumber; nails; manufactured wooden
articles; paper; hats; perfumes; patent medicines. For the most part, the
increased value of imports in the last-mentioned groups was due to the
general rise in prices which had taken place during the past year, rather
than to any gain in quantities imported.


l Canada's hard wheat processed in the United States and shipped to Haiti, forms an important part of this
floar.




HAITI: REPORT OF FISCAL REPRESENTATIVE


The principal decline in imports of American goods was recorded in the
case of pickled or smoked fish, imports of which from the United States
dropped in value by Gdes. 344,345. Canada obtained a larger share of
this market in 1936-37. Kerosene imports from the United States declined
in value by Gdes. 153,284; automobiles by Gdes. 122,959; chemical and
pharmaceutical products (except patent medicines) by Gdes. 107,325; cut
or granulated tobacco by Gdes. 73,388; leather goods and shoes by Gdes.
87,852. Smaller declines were recorded in the case of furniture imports,
agricultural implements, glassware, canned meats and jute bags.
Germany in 1936-37 supplied Haiti with goods valued at Gdes. 3,249,615.
Imports from Germany increased in value by Gdes.' 775,235, or by 31.3
per cent, from the previous year's figure.
Germany is the principal supplier of cement, agricultural implements,
enamelled kitchenware, cutlery and malt liquors. That country is also an
important supplier of tinware, glassware, leather goods and paints. The
gain in German trade in 1936-37 was due largely to increased imports of
cotton prints. In value, imports of this class of German goods increased
by Gdes. 302,375. Jute bags of German origin increased in value by Gdes.
69,776; miscellaneous chemical and pharmaceutical products by Gdes.
69,444; cotton hosiery by Gdes. 69,305; and agricultural implements by
Gdes. 59,365. Smaller gains were recorded in the case of miscellaneous steel
articles, beer, hats, cutlery, electrical appliances, toilet preparations, paint,
and patent medicines. Declines affected chiefly the glassware group (down
Gdes. 91,724); enamelled ware (down Gdes. 63,616),; silk goods (down
Gdes. 39,529); nails, rice, paper, steel sheets, leather goods and cheese.
SInrports from Japan during the past. two years have been confined almost
exclusively to the cotton goods group. Japan in 1936-37 sold merchandise
valued at Gdes. 3.217,661, or Gdes. 919,960 more.than in 1935-36. The
increase amounted to 40 per cent, accounted for under the cotton. goods
group, chiefly plain-woven cotton cloth. Also, Japanese cotton knit goods
increased in value from Gdes. 9,952, in 1935-36 to Gdes. 100,715 in 1936-37,
Belgium in 1936-37. registered one of the more striking gains in sales
of commodities to Haiti. Imports from that country increased in value
from Gdes. 807,678 in 1935-36 to Gdes. 1,270,961 in 1936-37, or by 57.4
per cent. Imports of soap from Belgium declined by a small amount.
Otherwise, all of the more important classes of merchandise which Belgium
sells to Haiti registered gains in 1936-37. Miscellaneous machinery imports
(chiefly shoe machinery) increased in value by Gdes. 196,837; steel sheets
by Gdes. 95,407; cotton prints by Gdes. 70,601; miscellaneous pharmaceu-
tical products by Gdes. 25,428; and goads'of linen and other fibers by Gdes.
22,449. Smaller gains were made in imports from Belgium of glassware.
kitchenware, jute bags, miscellaneous leather goods and rubber tires.





IA1TI: REPORT OF FISCAL REPRESENTATIVE


Imports from France declined by 43.8 per cent in a year when total im-
ports increased in value by 21.5 per cent. Haiti purchased French mer-
chandise valued at Gdes. 1,121,078 in 1936-37, compared with a correspon-
ding sum of Gdes. 1,996,165 the previous year. The comparison is made
with a year when imports from France already were below normal.
The reason for the decline, of course, was the fact that during more
than half of the fiscal year French merchandise w,as subject to the Haitian
maximum tariff and imports from that country had almost vanished. After
the exchange of notes in April, 1937, by which Haiti agreed to make mer-
chandise of French origin dutiable under the minimum tariff, imports from
France picked up sharply, as shown below:
Value of Imports Percentage of
from France Total Imports
Gourdes Per Cent
October, 1936................................... 40,123 1.04
November ...................................... 55,809 1.51
December ................... ................ 65,455 1.46
January, 1937................................. ..... 45,110 1.12
February ...................................... 69,200 1.91
M arch ...................................... 84,581 1.91
April ...................................... 59,134 1.31
May ..................................... 65,253 1.95
June ...................................... 112,821 3.41
July ...................................... 121,178 3.82
August ...................................... 207,533 5.92
September .................................... 194,881 4.72

Total.......................... ........... 1,121,078

It will be observed that nearly half of all imports from France in 1936-37
were received in the last four months of the period, after French merchan-
dise had been accorded minimum tariff privileges; also, that in the last
two months of the period the French share of the total import trade had
returned approximately to the normal level.*
It is not considered likely that consumption of French goods in Haiti
will diminish greatly because the former preferential tariff rates are no
longer in effect. France sells chiefly luxury articles and specialties in its
export trade. The price consideration is secondary to quality and repu-
tation. Consumption of these articles in Haiti is limited to a comparatively
small class whose buying habits so far as concerns French specialties
are little influenced by price. This explains the failure of the former prefer-
ential tariff rates to bring about the expected increase in consumption of
French goods. It is improbable that even greater concessions of that nature
to French trade would produce any marked rise in consumer purchasing.

*Imports from France were 5.26 per cent of total imports in 1935-36. In the five years ending in 1935-36,
imports from France comprised 5.48 per cent of total imports.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Declines in the value of articles purchased from France in 1936-37 are
given below:
Commodity Imports 1935-36 Imports 1936-37 Decline
Gourdes Gourdes Gourdes
W ines and liquors.......................... 309,298 92,366 216,932
Pharmaceutical products .............. 306,177 208,475 97,702
Perfumes, cosmetics, etc. .............. 234,761 100,921 133,840
Miscellaneous machinery .............. 104,145 136,123 31,978*
Cotton yarns and miscellaneous
cotton goods ............................ 95,607 86,102 9,505
Silk, woolen, linen goods................ 89,348 51,401 37,947
Paper ............................................ 75,361 78,573 3,212*
Table oils............................... ....... 41,495 27,972 13,523
Rubber tires ................................ 40,896 3,979 36,917
Brassware .................................... 16,040 5,541 10.499
Earthenware, pottery, etc................. 15,371 14,775 596
Other imports .............................. 667,666 314,850 352,816
Total .................................... 1,996,165 1,121,078 875,087

It will be noticed that imports of French specialties (wines, pharmaceu-
ticals and perfumes) dropped off more sharply than did the other classes
of imports. Merchants sold wine from stock during the past year and
imported very little French wine. Meanwhile Italian and Spanish wines
were imported in considerably greater quantities than before. German
pharmaceutical products largely supplied the shortage of similar French
products.
Imports from the Netherlands increased by 19.9 per cent to a total value
of Gdes. 1,015,518 in 1936-37. Canadian sales to Haiti, consisting mostly
of preserved fish and wheat flour, increased in value from Gdes. 890,681
in 1935-36 to Gdes. 972,160 in 1936-37.

Destination of Exports

France for many years prior to 1936-37 had been the principal market
for Haitian coffee, and a leading market for other' exports. It was only
during the war years, and again in 1919-20, that France relinquished its
predominant place in the Haitian export trade. Nearly half of all Haitian
exports were sold to importers in France during the past twenty years.
An abrupt change took place in 1936-37 after France in April, 1936, had
denounced its commercial convention with Haiti. France took only 20 per
cent of the 1936-37 coffee crop, as against 67.2 per cent of the previous
crop. Of total exports, France took only 16.31 per cent in 1936-37, as
agaInst 47.20 per cent in 1935-36.
Coffee formerly sold to France had to be sold in other markets. Moreover,
France in 1936-37 purchased smaller quantities of cotton, logwood and
honey. The re-distribution of these sales among other countries produced
wide changes in the participation of foreign countries in the Haitian export
trade.

*Increase.





HAITI: REPORT OF FISCAL REPRESENTATIVE


. The United States and its possessions in 1936-37 became the principal
market for Haitian exports, with the Briti:sh Empire in second place, and
France and French possessions in third place. Belgium remained in fourth
place, although it substantially increased its purchases of Haitian exports.
In the previous year France had been in first place followed by the
British Empire, the United States and Belgium. Together, these countries
absorbed 74.17 per cent of Haitian exports in 1936-37, compared with 87.86
per cent in 1935-36.
In order of relative importance, other countries buying Haitian products
in 1936-37 were Italy, Denmark, Germany, Sweden and the Netherlands.
In the previous year the order of importance had been Denmark, Germany,
Japan, the Netherlands and Italy. Italy and Sweden both became impor-
tant ;purchasers of Haitian coffee ibn 1936-37.
The United States in 1936-37 purchased Haitian merchandise valued at
Gdes. 12,501,754. This amount is 27.87 per cent of total Haitian exports
during the year.
If shipments to United States possessions are included in the above, the
share of the export trade taken by the United States amounted to Gdes.
12,657,577, or 28.22 per cent of total exports.
In the previous fiscal period, shipments to the United States had been
valued at Gdes. 6,727,449, or 14.24 per cent of total exports. The export
trade with that country, therefore, was very nearly doubled in a year when
the total value of the export trade declined.
Values of exports to the United States, by principal commodities, for
the last two fiscal years are shown below:
1936-37 1935-36
Gourdes Gourdes
Coffee ................................... 4,091,623 6i9,251
Sisal ....................................... 3,333,204 2,670,115
Bananas .................................. 1,877,323 771,669
Cacao ...................................... 963,359 565,015
Goatskins ................................ 778,386 413,441
Sugar (raw and refined).......... 455,779 630,960
Logwood ................................ 449,567 276,756
Molasses ................................ 392,601 570,151
Rum .......................................... 68,743 121,677
All others ................................ 91,169 88,414
Total ........................... 12,501,754 6,727,449

The United States purchased practically all of the bananas, cacao, goat-
skins, molasses and rum exported from Haiti in 1936-37. In addition,
American importers purchased 19 per cent of the coffee crop, 87 per cent
of sisal exports, and 67 per cent of logwood exports.
The United Kingdom in 1936-37 purchased Haitian goods valued at
Gdes. 7,243,690, or 16.15 per cent of total exports. If exports to Canada,
Jamaica and a few other countries of the British Empire to which Haiti
sells commodities are included in the last figure, purchases by the British




HAITI: REPORT OF FISCAL, REPRESENTATIVE


Empire in 1936-37 amounted to. Gdes. 7,618,010 or 16.98 per cent of total
exports.
The United Kingdom, purchased Haitian commodities valued at the fol-
lowing amounts during each of the past two fiscal years:
1936-37 1935-36
Gourdes Gourdes
Raw cotton .............................. 3,354,344 3,681,655
Raw sugar ................ .............. 3,369,612 3,038,815
Cottonseed cake ........................ 472,347 381,795
All others ................................ 47,387 28,494
7,243,690 7,130,759

The United Kingdom in 1936-37 purchased 86 per cent of raw sugar
exports, 42 per cent of raw cotton exports and 75 per cent of cottonseed
cake exports. British importers also purchased small quantities of honey
and turtle shells.
Canada's only purchases in 1936-37 were sisal valued at Gdes. 263,027
(8 per cent of sisal exports) and cottonseed cake valued at Gdes. 27,920.
Sales to Canada have been disappointing in view of the fact that Haiti
furnishes a good market for Canadian products. Canada .in 1936-37 sold
to Haiti goods (mostly flour and fish) valued at Gdes. 972,160. The latter
figure does not include considerable quantities of flour milled in the United
States from Canadian wheat and included in customs statistics for imports
from the UnIted States.
French purchases of Haitian commodities during each of the last two
fiscal years are shown below:
1936-37 1935-36
Gourdes Gourdes
Coffee ........................................ 4,634,804 19,560,539
Cotton .................................... 2,510,616 2,529,149
Logwood ................................ 95,753 143,011
Honey .................................... 12,665 30,525
All others ................................ 61,694 32,978
Total .............................. 7,315.532 22,29,6,202

The break in trade relations .with France, discussed at length elsewhere
in this report, in one year's time has cut sales to France to less than a third
of the 1935-36 figure. France bought only 20 per cent of the 1936-37 coffee
crop, as against 67 per cent of the previous year's crop. Cotton sales,
however, remained relatively stable. France purchased 33 per cent of
1936-37 exports of this commodity, compared with 35 per cent in 1935-36.
Small shipments of logwood, honey, orange peels and oil of neroli were
the only other Haitian products purchased by France in commercial quan-
tities in 1936-37.
The new provisional trade agreement with Belgium, by which each nation
extends most favored nation treatment to imports from the other, has been
instrumental in producing the marked rise in trade with Belgium. Imports
in only one year's time have increased by 57 per cent, and exports by 18.5




HAITI: .REPORT OF FISCAL REPRESENTATIVE

per cent. In value, exports .to. Belgium, increased from Gdes. 4,747,353
in 1935-36 to Gdes. 5,625,493 in 1936-37. Most of Haiti's sales to Belgium
in 1936-37 consisted of coffee, valued at Gdes. 5,402,072, although Belgium
also bought small quantities of cotton, cottonseed cake,'logwood and honey.
In quantity, sales of coffee to Belgium have remained about the same
during the past two years. Belgium purchased 5,623,368 kilos of coffee
in 1936-37 and 5,645,061 kilos in 1935-36.
Italy became anr important buyer of Haitian coffee in 1936-37 after a
lapse of two years. Sales of coffee to Italy amounted to 3,822.033 kilos
in 1936-37, compared with 330,334 in 1935-36 and 847,508 in 1934-35.
During the five years prior to 1934-35, Italy had taken between three and
four million kilos of Haitian coffee annually.
Exports to Italy in 1936-37 consisted almost entirely of: l) coffee val-
ued at Gdes. 3,618,190; and 2) logwood valued at Gdes. 27,921. Total
exports were valued at Gdes. 3,646,737, as against a similar total of Gdes.
313,619 in the previous fiscal period.
To Denmark, Haiti sold coffee valued at Gdes. 2,085,963 in 1936-37, and
Gdes. 2,765,599 in 1935-36. Coffee was the only export commodity sold
to that country in 1936-37. In the previous year Haiti had shipped cotton-
seed cake to Denmark valued at Gdes. 69,998.
Germany purchased the following Haitian commodities in 1936-37 and
1935-36:
1936-37 1935-36
Gourdes Gourdes
Coffee ..................................... 671,996 627,442
Cotton ................................. 846,289 323,328
Sisal ........................................... 226,313 ............
Honey ........................... .............. 80,558 68,052
All others............................ ...... 46,267 18,614
Total .......................... 1,871,423 1,037,436

It is to be noted that Germany during the past year became an important
buyer of Haitian sisal and nearly tripled its purchases of cotton. Despite
the gain in total exports to Germany, imports of German goods in value
are still nearly double the value of Germany's purchases from Haiti.
Sweden became a factor in the Haitian export trade in 1936-37 by taking
coffee valued at Gdes. 978,315. Coffee exports to Sweden in 1935-36 were
valued at only Gdes. 154,639. Other exports to Sweden in both years were
negligible.
The Netherlands in 1936-37 bought chiefly Haitian coffee, together with
small quantities of cacao, honey and fresh fruits. Total exports to the
Netherlands were valued at Gdes. 957,523 in 1936-37, compared with Gdes.
354,154 in 1935-36. The gain was due to the greater coffee purchases.
Japan bought Haitian merchandise (mostly cotton) valued at Gdes.
936,881 in 1936-37, compared with Gdes. 709,522 in 1935-36.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Balance of Trade

Imports of merchandise in 1936-37 exceeded exports in value by Gdes.
1,221,210. Thus, there was a so-called' "adverse" balance of trade. At the
same time, the figure representing the excess of import values over export
values was small considering that total trade (both exports and imports)
during the year was valued at more than ninety million gourdes.
This office in its annual reports frequently has pointed out the danger
of drawing too sweeping conclusions from the movement of foreign
commerce, as expressed in values, over a single year -or even over a
limited period of years. In the present instance, we know that the mere
fact that Haiti bought more than it sold does not indicate any fundamental
weakness in its trade position, or any sudden and adverse change in the
direction of the flow of funds.
The emphasis on importing during the year meant simply that business
was taking up some of the slack of the previous twelve months when
exports, in terms of values, had exceeded imports by the almost unprece-
dented sum of Gdes. 9,317,986.
The import trade in 1935-36 was retarded by transitory factors such as
business apprehension over the possible ill effects of the break in trade
relations with France, and the period of adjustment brought about by the
legislation regulating retail commerce. Also, merchants had over-stocked
in 1935, and the liquidation of excess inventories had retarded importing
throughout 1935-36.
This period had passed by the beginning of the fiscal year under report,
and with the return of business confidence the import trade resumed an
upward trend even though deficient supplies of coffee prevented a corres-
ponding rise in exports. The result was a small "adverse" 'balance of trade
at the year end.
It should be remembered that Haitian purchases of imported merchan-
dise are strictly limited to the net amount the country receives for the
commodities it sells abroad. There can be no influx of imported supplies
beyond the capacity of the country to absorb them easily. The mechanism
for an artificial credit expansion does not exist in Haiti. So long as the
gourde is tied to the dollar under the existing fixed arrangement, there
is no need for exchange control, clearing arrangements, compensation, and
other restrictions of the normal movement of trade by which so many
trading nations have attempted to regulate the exchange of merchandise
and money.
Haiti is extremely fortunate in being free of these disagreeable features
of present-day commerce. It can keep its advantage by remaining strictly
aloof from expansions of bank credit or currency tampering for the pur-
pose of producing a temporary stimulus to business.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Whether such ideas have any rightful place in the economy of other
nations time will show, but certainly they could cause only confusion and
ultimate distress in Haiti.
In order to show how merchandise imports, over a sufficiently long
period of time, are automatically adjusted to the values received from
exports, this office in its last report* presented a table showing the balance
of trade by five year periods, b'egirini'ng in 1816. Since another year has
passed, the table below gives similar data compiled during the twenty years
beginning in 1917:
Imports Exports Surplus or Deficit
Gdes. (000,000's) Gdes. (000,000's) Gdes. '(000,000's)
1917-1922........................ 395 357 -38
1922-1927...................... 418 419 + 1
1927-1932...................... 337 349 +12
1932-1937........................ 209 226 +17

As in last year's table, the present figures show a steady and consistent
improvement in merchandise exchanges, in four successive stages. A proper
understanding of the figures, however, requires that they should be examin-
ed in relation to the important items, exclusive of merchandise, which
influence the figures entering into the international balance of payments.
During the first five-year period there was an obvious mal-adjustment
in merchandise exchanges. That so great a disparity in favor of imports
was possible primarily was due to the fact that the period was marked by
a considerable inflow of private capital. The present modern sugar indus-
try was established during the period. This meant heavy imports of
machinery and equipment, and the beginning of operations on a large scale
through the use of imported capital. There was no corresponding increase
in exports since the present volume of production was not reached until
much later.
The period also was notable for the brief post-war boom and the subse-
quent crash of commodity prices in 1921. Haiti, like other countries
experienced a wave of hysterical spending based on the fact that its export
products for a brief period were being sold at extraordinarily high prices.
Speculation for the continuance of high prices for exports brought about
abnormal imports and inflated inventories. Prices for coffee, cotton, sugar
and logwood broke in 1921, bringing a painful period of adjustment while
imports were being brought in line with the diminished value of the export
trade.
The foreign trade record for the period shows that the post-war depres-
sion of 1921, while not so prolonged as the depression from 1929 to 1932,
had more severe repercussions on business in Haiti. During no part of
the more-recent depression was there recorded a drop in the value of the
export trade even approaching the decline in value from Gdes. 108,104,639
in 1919-20 to Gdes. 32,952,045 in 1920-21. In fact, during no year in the

*Annual Report of the Fiscal Representative, fiscal year 1935-36, page 12.





16 HAITI: REPORT OF FISCAL REPRESENTATIVE

last depression did the value of the export trade decline to such a low level.*
SIt is not surprising, therefore, that the first five-year period shown in
the table reveals a considerable excess of imports over exports. A reversal
of the trend occurred during the next five-year period: Fundamentally,
the change was dtie to gradually improving export commodity prices and
the beginning of a period of business prosperity. At the, same time, the
period coincided with the flotation of the three series of the dollar loan
of 1922.
The new upward trend was not due to increased production resulting
from the release of.borrowed capital obtained from the 1922 loan. In the
first place, the 1922 loan was ,primarily a refulnding loan. The 'conversion of
the debt had little immediate effect on business other than the strengthening
of business confidence. To be sure, the payment of the cash awards of
the claims commission from the proceeds of the loan released more than
six million gourdes for expenditure: Little of this money, in all probability,
found its way into productive enterprises such as would tend to increase
exports. For the most past, these expenditures tended to increase the debit,
or import items on the international balance sheet. Also, it was not until
1927, and subsequently, that the unused balance of the Series A loan pro-
ceed's, amounting to more dhan Gdes. 12,000,000, was released for public
works; and of this sum a large part was expended for purposes not imme-
diately productive of increased exports, such as the construction of voca-
tional schools. As to the Series B and Series C loan, bonds of these issues
were used simply for refunding of internal loans of the government, settle-
ment of the government's guarantee on bonds of the National Railroad,
and for funding floating indebtedness. The C bonds were exchanged for
the guaranteed bonds of the National Railrload Company of Haiti, exclu-
sively. These bondhoders were mostly located abroad. Of the Series B
bonds issued in settlement of awards of the Claims Commission, and to
refund several internal bond issues of the government, the greater part
were issued to persons in Haiti. The payment of interest on these bonds,
together with their rapid retirement and eventual complete redemption a
year ago, released more than a million and a half gourdes annually for
expenditure in Haiti. Liiftle of the proceeds of the Series B issue, in all
probability, has found its way into enterprises susceptible of increasing
export production. For the most part, the money probably found its way
abroad in the form of purchases of imported conjmodiities or in the form
of invisible imports, such as tourist expenses abroad.
It safely can be concluded, therefore, that the 1922 loan h ad little dh-ect
effect on increasing exports, or on improving the balance of trade. On
the ocntrary, except for the disbursement of Gdes. 1,400,000 for the con-
struction and improvement of roads and trails, most of the proceeds were

*The low point in the 1929-1932 depression was reached in the fiscal year 1931-32 when the total value of
the export trade amounted to Gdes. 36,106,394.





HAITI: REPORT OF FISCAL REPRESENTATIVE


utilised for refunding operations and for funding of the floating debt.
Payment of interest on these bonds, and their gradual retirement has
released cash in Haiti only in those instances, as in the case of the Series
B bonds, where the securities are held by persons in Haiti; and in these
last-mentioned cases, the expenditure olf funds for interest or bond re-
tireme,'t probably increased the debit or import side of the balance sheet.
Nevertheless, it will be remarked that during the last two five-year
periods under examination, the balance of trade has been favorable to Haiti.
Moreover, the "favorable" balance during the five years just ended was
greater than during the previous five years -and this has been accom-
plished during several years of particularly severe business depression.
The conclusion is self-evident that Haiti has made real progress during
the past fifteen years. It has turned an adverse balance of trade into a
favorable balance of trade. Although the value of the export trade, in a
period of falling commodity prices, has declined, the value of the import
trade has declined even more- and this, of course, is to be desired. It has
not meant that Haiti has had to forego the necessities, or even the luxuries,
which it imports from abroad. Doubtless Haiti is as well provided with
imported goods as it was ten years ago. Building construction is active.
Automobiles are as much in evidence as ever. In quantity, imports of
textiles, foodstuffs, gasoline and other leading articles are on a par with
normal years in the past.

Ports of Entry for Imports
Port-au-Prince handled 73.07 per cent of the import trade in 1936-37
and 73.04 per cent in 1935-36. There was practically no change, therefore
in the relative importance of the capital city as the leading port of entry.
In a year when the value of the total import trade increased by 21.5 per
cent, imports received at Port-au-Prince increased by precisely the same
percentage. The custom house at Port-au-Prince reported imports valued at
Gdes. 33,661,677 in 1936-37, compared with Gdes. 27,696,560 during the
previous fiscal period.
Cap Haitien, Cayes, Gonaives and Saint Marc, in that order of impor-
tance, each received merchandise during 1936-37, 'valued at more than a
million gourdes. Cap Haitien In 1936-37, as in previous years, was in
second place in the import trade, with imports valued at Gdes. 3,052,065.
The latter figure is Gdes. 841,328, or 27.5 per cent, greater than the cor-
responding total for 1935-36. The import trade at Cap Haitien, therefore,
was somewhat more active in 1936-37 than it had been the previous year.
The city of Cayes recorded the greatest relative gain in the value of
its import trade, which increased from Gdes. 1,658,034 in 1935-36 to Gdes.
?,458,151 in 1936-37, or by 48.3 per cent. Cayes handled 5.34 per cent of
:he total import commerce of the Republic in 1936-37. This compares with
.37 per cent in 1935-36 and 3.98 per cent in 1934-35. The Cayes district




HAITI: REPORT OF FISCAL REPRESENTATIVE


was favored by a good coffee crop during the past season. Exports of
this commodity from Cayes increased in value by 18.9 per cent, whereas
total coffee exports declined in value by more than twenty per cent.
Gonaives reported a gain of Gdes. 142,565, or 11.2 per cent, in value of
imports. That city, therefore, failed to obtain its share of the general rise
in import activity recorded during 1936-37. At Saint Marc, the value of
imports in 1936-37, contrary to the general trend, actually declined. The
total value of imports handled at that port in 1936-37 amounted to Gdes.
1,319,730, or Gdes. 42,727 less than in 1935-36. Trade at Petit Goave
also moved contrary to the general trend. Imports received through that
port were valued at Gdes. 347,332 in 1936-37, or 17.2 per cent less than
the 1935-36 total.
At J6ermie and at Port-de-Paix, sixth and seventh in importance in
1936-37, the import trade moved upward by 24.5 per cent and 25.9 per
cent respectively, when comparison is made with the previous years.

Ports of Shipment for Exports
The value of total exports in 1936-37 moved downward by 5.05 per cent
when comparison is made with the previous year. Exports were valued
at Gdes. 44,854,450 in 1936-37, or Gdes. 2,384,144 less than in 1935-36.
Contrary to the general downward movement of exports, the three
leading ports of shipment in 1936-37 reported sharp gains in merchandise
exports. At Port-au-Prince, exports rose in value by Gdes. 1,744,484, or
by 13.2 per cent, when comparison is made with the previous fiscal year.
Similarly, exports at Cayes rose in value by Gdes. 748,787, or by 18.1 per
cent; and at Saint Marc by Gdes. 140,428, or by 3.4 per cent. Miragoine,
one of the less important ports, also recorded a gain in exports amounting
to Gdes. 220,181, or 20.6 per cent.
All other ports of shipment registered declines in the value of comriod-
ities exported. The most severe declines were at Cap Haitien, where
exports dropped in value by Gdes. 2,470,162, or by 40.4 per cent; and at
J6r6mie, where a similar decline of Gdes. 830,195, or 34.9 per cent was
recorded. At Gonaives, exports declined by Gdes. 1,400,116, or by 27.8
per cent; at Jacmel by Gdes. 1,142,597, or by 26.7 per cent; at Petit-Goive
by Gdes. 210,308, or by 8.9 per cent; and at Port-de-Paix by Gdes. 126,266,
or by 7.4 per cent.
Unusually wide variations in the size of the coffee crop in different
districts was the chief cause of these widely differing results. The coffee
harvest along the north coast and in the Gonaives and Jeremie districts was
exceptionally small in 1936-37. At Saint-Marc on the other h.nd, shipments
in 1936-37 exceeded those ih 1935-36 (although coffee' exports in the
country as a whole declined by more than thirty per cent). At Port-au-
Prince, Cayes, Petit Goive and Miragoane, coffee exports in quant'ity were
only slightly under the 1935-36 figures. In value, coffee exports actually
increased at Port-au-Prince, Cayes, Saint Marc and Miragoine.





HAITI: REPORT OF FISCAL REPRESENTATIVE


. Changes in distribution also accounted for these variations. More coffee
than usual is reported to have been transported from J6r6mie by coastwise
vessels to other ports of shipment. Doubtless, much coffee which ordi-
narily would be shipped from Jacmel was transported overland to Petit
Goive for preparation and shipment abroad. Intensive efforts to improve
the quality of Haitian coffee have tended to concentrate coffee shipments
in the ports where better facilities for preparation have been established.
The value of coffee shipped from Port-au-Prince in 1936-37 was greater
than in any previous year since the 1933-34 harvest.
Other commodities contributed to these changes in the relative impor-
tance of various cities in the export trade. Cotton shipments from Port-
au-Prince in 1936-37 both in quantity and in value, were greater than had
been recorded in any recent year. They exceeded the corresponding figures
for 1935-1936 by nearly a million gourdes. This was largely because new
boll weevil quarantine regulations required the exportation of cotton pro-
duced on La GonAve Island from Port-au-Prince, rather than, as formerly,
from Saint Marc. Increased banana exports from Cap Haitien and Port-
de-Paix relieved to some extent the exceptionally small coffee harvest in
those idist)ricts. Coffee exports at both Cap Haitien and at Port-de-Paix in
1936-37 were smaller in value than in 1934-35 when the coffee crop in the
country as a whole reached a record low level.
Fort Liberte has become a port of shipment of considerable importance,
due entirely to the sisal development in that district. Shipments from that
port in 1936-37 consisting exclusively of sisal, were valued at Gdes.
3,466,176. Fort Libert6 has become more important, with respect to the
value of its export trade, than Jacmel, Petit Goave, Port-de-Paix and
J&eremie.
Shipping

A general advance in freight rates was the chief development affecting
the carrying trade during the past year. Rates on coffee and cotton shipped
to Europe were raised early in the year. Rates on cotton piece goods and
on soap imported from European ports also were advanced. Shortly after
the close of the fiscal year under report, a general increase in rates on im-
ports from the United States became effective.
In view of the disastrous decline in the price of coffee which took place
early in November, 1937, it is to be expected that the shipowners will recon-
sider the course they have taken with respect to their Haitian trade. This
office believes that their rate increases already had retarded commercial
progress in Haiti which alone can bring profits to the carrying trade. The
shipowners have gained nothing; and a serious obstacle has been placed
in the way of normal commercial development in Haiti. So important is
this subject, and so dangerous to Haitian commerce that a separate section,
below, has been devoted to it in this report.
A total of 722 steam and motor vessels called at Haitian ports in 1936-37.
This figure exceeds the previous year's total by 50. The net registered






HAITI: REPORT OF FISCAL REPRESENTATIVE


tonnage of these .vessels aggregated 1,642,958 in 1936-37, and 1,609,958
in 1935-36.
The increased number of callings in 1936-37 was due to of ships engaged exclusively in the banana trade. These vessels, of small
tonnage individually, are mostly of Central American registry. On each
visit to Haiti they usually call at several ports to load bananas. They do
not engage in the import trade, except to carry supplies to the local fruit
company.
More than 90 per cent of tonnage serving the Haitian trade is of Ameri-
can, Netherlands, German, British and French registry, in that order of
importance. The number of vessels flying flags of these nations in 1936-37
totalled 592. Precisely the same number under these registries called at
Haitian ports the previous year. American vessels in 1936-37 increased by
13; Netherlands vessels by two; and French vessels by one. Vessels flying
the British flag declined in number by six, and German vessels by ten.
The figures include the large steamers engaged in the winter tourist
trade There were 17 of these vessels in 1936-37 (tonnage 178,015), compar-
ed with 15 in 1935-36 (tonnage 161,539). These ships do not carry oargos
from or to Haiti, and hence they have no significance from the point of
view of foreign commerce. Since the number of vessels engaged in this
trade in both years was nearly the same, no adjustment need be made in
examining comparative figures for the two years under consideration.
American ships in 1936-37, as usual, carried the greater part of the im-
port trade. Of total imports valued at Gdes. 44,854,450, American ships
carried imports valued at Gdes. 25,349,934, or 55.01 per cent of the total.
The corresponding share during the previous year was 54.21 per cent.
American vessels carried 57 per cent of total imports from the United
States, 72 per cent of imports from the United Kingdom, 78 per cent of
imports from Japan, 36 per cent of imports from France, 30 per cent of
imports from Belgium, and 15.6 per cent.of imports from Germa.ny.
These figures, of course, are based on values carried during the last stage
of the voyage, and make no allowance for the fact that the goods in many
cases had been transshipped at ports such as New York or Panama from
vessels of other registries.
Netherlands vessels were second in importance in the import trade in
both years. Goods valued at Gdes. 9,670,048 were carried, or 20.99 per cent
of total imports. This compares with 21.02 per cent in 1935-36. Nether-
lands vessels carried 25 per cent of total imports from the United King-
dom,.and 22.7 per cent of imports from the United States.
Norwegian ships carried 9.85 per cent of total imports (8.30 per cent
in 1935-36). Ten per cent of imports of Japanese origin was carried in
Norwegian bottoms, and 17.8 per cent of total American merchandise im-
ported.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Vessels of German registry carried 7.94 per. cent of total imports in
1936-37 (8.28 per cent in 1935-36). These ships carried chiefly German
and Belgian goods. Of total imports from Germany in 1936-37, valued at
Gdes. 3,249,615, German ships carried 69.7 per cent. Imports from Belgium
in 1936-37 totalled Gdes. 1,270,961, in value. Of this sum, German ships
carried 46.6 per. cent.
Largely because of the decline in purchasing from France, imports
carried in French bottoms declined to 1.73 per cent of total imports from
3.75 per cent in. 1935-36. French vessels carried chiefly merchandise of
French origin. Of total imports from France, valued at Gdes. 1,121,078
in 1936-37, 45.9 per cent. was transported to Haiti under the French flag.
British ships carried only 1.45 per cent of total in ports in 1936-37,
compared with 2.51 per cent in 1935-36. The merchandise carried was
mostly of American and British origin.
In the export trade, ships.of Netherlands registry continued to lead ships
of other registries. Of total exports valued at Gdes. 44,854,450 in 1936-37,
Netherlands ships carried exports valued at Gdes. 14,646,993, or 32.65
per cent ,of the total, recording a considerable gain from 27.15 per cent
reported a year ago. The gain was due to increased exports ,of coffee to
Italy, .most of which was shipped in vessels of Netherlands registry.
Netherlands ships carried 60.2 per cent or merchandise consigned to Italy,
39 per cent of merchandise consigned to Denmark, 35.3 per cent of mer-
chandise consigned to the United States, and 31.5 per cent of merchandise
consigned to Belgium. Of French purchases of Haitian export commod-
ities, 30 per cent was transported i'n Netherlands ships.
American vessels also increased their share of the export carrying trade.
The share of total exports increased from 20.07 per cent in 1935-36 to 26.53
per cent in 1936-37. The fact that the United States has provided a new
outletfor Haitian coffee accounts for the gain.
Of exports to the United States, valued at Gdes.. 12,501,754 in 1936-37,
American ships carried-44.3 per cent. American ships also carried 35.6
per cent of commodities mostlyy coffee) shipped to Ittaly, and 34.9 per cent
of commodities shipped to Belgium. American ships also obtained a good
share of the carrying trade to France (16.9 per cent) and to the United
Kingdom (16.2 per cent).
Vessels of German registry carried a smaller share of the total export
trade (12.31 per cent in 1936-37, 27.15 per cent in 1935-36). German ships
carried 80.8 per cent of total exports to Germany; 46.8 per cent of exports
to Sweden; 16.3 per cent of exports to the United Kingdom; 16.1 per cent
of exports to Belgium; and 12.5 per cent of exports to France.
French ships carried 11.40 per cent of total exports in 1936-37, as com-
pared with 18.26 per cent in 1935-36. The smaller share was, of course,
due to the drop in coffee shipments to France, a large part of which always
has been carried in French bottoms. French ships in 1936-37 carried 23






HAITI: REPORT OF FISCAL REPRESENTATIVE


per cent of goods consigned to France, 25.3 per cent of goods consigned
to Belgium, 24.5 per cent of goods consigned to Denmark, and 11.4 per cent
of goods consigned to the United Kingdom.
Haiti has no inerdhant marine of its own, except coastwise shipping. It
is entirely dependent on foreign steamship lines for transporting its foreign
conimerce. The service offered is more than adequate to meet commercial
needs. Sailings are frequent, and ships are fast, particularly in the service
to New Yprk. There lits (no shortageof cargo space.
There is, however, a definite shortage of passenger accommodations on
lines serving New York and ports to the south of Haiti. It is at nearly
all times difficult to secure steamer passage to and from New York. The
explanation is not that the lines are overburdened by persons seeking
passage between New York and Port-au-Prince. On the contrary, probably
fewer persons visited Haiti this year than in 1936. The steamlshi'p comrpa-
nies find it more to their immediate advantage to sell tickets to terminal
points, and since Haiti is not a iternmitus, the tendency is for the passenger
agents to allot space for the Haitian trade only when passage on longer
routes cannot be sold. Steamers plying in West Indian waters have experi-
enced a boom in the cruise trade during the past season. The result is a
shortage of space for allotment to persons travelling only between Haiti
and New York. As a result Haiti's winter tourist trade has suffered and
is seriously handicapped.
There is just reason to complain of this treatment, which is discrimina-
tory to an extreme and which acts as a business deterrent. Commercial
travelers and businessmen with interests in Haiti cannot carry out their
engagements. Tourists and travelers desiring to visit Haiti for short
periods of time find they cannot engage passage.
The passenger steamers are common carriers and have an obligation
to carry passengers when space is available. The companies manifestly
are evading this obligation, so far as Haiti is concerned, by discriminatory
allocation of passenger accommodations.

Freight Rates
On April 1, 1937, the freight rate on coffee shipped to Europe was ad-
vanced by approximately 1/6 of one cent per pound. Europe was still the
principal market for Haitian coffee.
At about the same time the rate on cotton piece goods shipped to Haiti
from Europe was increased by 9.4 per cent. Next to the United States,
Europe is the principal supplier of cotton piece goods to Haiti. The rate on
common soap shipped from Europe (the principal supplier to Haiti) wa,.
increased by 5 shillings per ton.
Calculated on the basis of Haiti's foreign commerce in 1935-36, these
increases will cost the Haitian people in one year's time the sum of Gdes.
650,000.




HAITI: REPORT OF FISCAL REPRESENTATIVE


But this is not all. In September, 1937, it was announced that the freight
on exports of cotton to Europe (Haiti's most important market for this
commodity) would be increased by 27 per cent in the case of high density
bales, and by 33 1/3 per cent in the case of low density bales.
More important still, it was announced that a general increase in rates
on commodities shipped to Haiti from American East Coast and Gulf ports
would come into effect on November 1, 1937. The Haitian government
and this office vigorously protested. Nevertheless, the increased rates
became effective according to schedule.
The present system of forming groups of lines serving a country has
destroyed fair competition. These groups, or freight conferences, are in
effect international combinations in restraint of trade which escape usual
methods of regulation. However, much can be done by common action. It
is recommended that those countries served by the same or similarly indif-
ferent steamship lines should by international accord take action to regulate
freight conferences of this type.
The rate advance affected all of the leading import commodities. The
rate on cotton piece goods from the United States was increased by about
14 per cent; on flour by 17 per cent; on fish by 50 per cent. Freight on
kerosene imports was advanced by 12.5 per cent; and on automobiles and
trucks by from $28 to $30 per unit.
The commodities mentioned comprise about half of Haitian imports
from-North American ports. Rates applicable to dozens of classes of other
commodities, such as foodstuffs, building materials, iron and steel products,
trachinery, miscellaneous manufactured articles, etc., were increased in
about the same proportion.
It is probable that the shipping lines have managed to nullify the increase
in commerce which we had hoped would result from lowered tariff barriers
brought about by the new trade treaties.
Public announcement of the reported intention of the steamship compa-
nies to increase freight rates on importation's of Aimerican commodities
was first made by this office in its Monthly Bulletin for August, 1937.
On that occasion, this office made known its views regarding the general
advance in rates on exports and imports by publishing the following re-
marks:
It is difficult to perceive by what process of reasoning the
ship-operators can believe that by bringing about so drastic an
increase they are best serving the interests of the companies they
represent, or of the country whose water-borne commerce must
be carried in their ships, and whose economic life to so very large
an extent is dependent upon the cost of the service those lines
render.
This office asks: are the shipping companies not already bene-
fiting from a marked rise in the volume of world trade-and hence
cargos and higher revenues? Is there such a shortage of cargo





HAITI: REPORT OF FISCAL REPRESENTATIVE


space that they feel justified in penalizing Haiti, because there is
now more business?
Haiti's very existence depends on its export trade. Of total
exports, 85 percent consist of coffee, cotton and sugar. And pros-
pects of any rise in prices this year which would permit us to pay
these new demands are to say the least remote. Haiti is asked to
go to work for these ship-owners who have found that elsewhere
in the world commodities such as iron and steel are increasing in
price; because re-armament is creating a demand for cargo space;
and because general business conditions are improving.
The ship-owners have not sought to explain or justify their
proposed action. This is unfair to Haiti. The Government, and
businessmen in Haiti, at least are entitled to present their views
to the ship-operators. Instead, the freight schedules are decided
upon at conferences held abroad, (and advance notice is not
given) at which no representative of the country most intimately
concerned is present. And rates are determined, not on the basis
of the needs of the individual small country, but on the basis of
commerce between, let us say, Argentina and the United States;
or France and Brazil.
Haiti has only two means of recourse. First, it can appeal to
the reason and good sense of the ship-operators. If the case is
clearly presented, it should be evident to the ship-operators that
their profit in the Haitian carrying trade lies in promoting pros-
perity in Haiti, and not in placing new burdens on a foreign trade
already retarded by the failure of the country's three principal
exports to follow the upward trend of world commodity prices.
Further, it can ask these people to stop and consider the delicacy
of adjustment of markets--commercial treaties-balance of
trade. Others are as vitally concerned as the shipping people.
Suppose we can neither sell nor buy as a result of their demands.
The other recourse lies in promoting-or if necessary by en-
forcing through legislation-a more extensive use of freight
contracts entered into by negotiating individually with the ship-
ping companies. Action in this direction may at least put an end
to discriminatory, or preferential, rates such as the lower rate on
high density cotton referred to above.
This latter provides a striking instance of the unwillingness,
or inability, of the ship-operators to adapt their rates to the needs
of the individual country which they are serving. With one ex-
ception, the cotton ginners in Haiti are not equipped to bale
cotton with sufficient .density to permit it to enjoy the lower
freight rate. And with the boll weevil, and an inevitable decline
in cotton exports, it is extremely unlikely that ginners will risk
the capital necessary to provide the expensive new equipment
needed to ship high density bales. Yet instead of trying to help
an ailing industry, the ship-operators in raising the rates on
cotton have raised the rate, proportionately, more in the case of
low density cotton. Most cotton shipped from Haiti comes under
the low density category. If the new discriminatory rate comes
into effect, we may expect to find growers in Saint Marc, Go-
naives and in other leading cotton-producing areas compelled to
sell their cotton in Port-au-Prince where the only high com-
pression baling installation is available.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Not only are the threatened increases in rates unjust and ill-
adapted to Haiti's commerce, but they call for so extensive a
scaling-upward of shipping costs that the monetary loss to the
people of Haiti will be considerable. It is estimated that the
increases* set forth above, if put into effect, would cost consumers
a total of about Gdes. 425,000 annually. And this is money which
will leave the country, adversely affecting the balance of pay-
ments and adding io the expense of purchasing the staple com-
modities which Haiti must purchase from abroad.
In the September, 1937, issue of the Monthly Bulletin, this office repor-
ted that merchants in Haiti had protested to suppliers in the United States,
stating that the proposed increase would reduce seriously their volume of
business. Other merchants were advised to make known their .complaints
and bring important American manufacturers and exporters into the dis-
cussion.
Nevertheless, the new rates went 'into effect on Noveriber 1,1937. That
the action was premature, and in no way justified by any proportionate
and fundamental increase in business prosperity in the trading area to
which the rates applied was forcibly brought to public notice only a few
days later, when Brazil discarded its valorization scheme and coffee-
producing countries found trading in coffee suspended and the coffee
market in chaotic shape. There is certainly no immediate outlook for the
prosperity in Latin American countries which will justify the absorption
by business of higher freight costs. Nor had there been any. reason to
suppose, when the new. rates were decided upon some. months previously,
that coffee countries could pay higher rates.
Apparently, the shipowners, concerned only with overcoming somewhat
higher operating costs in their own business, quite mistakenly had assumed
that the countries they serve had obtained:uniformly a larger share than
they really had of the better business conditions ruling, a year ago.
But Haiti had not received its share of the new business prosperity; nor
of the business improvement in the United States, on which the shipowners
presumably had based their conclusions. In the United States, a rather
severe.. business recession has set in. Costs will tend to decline
rather than rise. Meanwhile, the coffee countries of the Caribbean area
apparently are expected to bear the burden of furnishing higher revenues
to the' ocean carriers when the foreign commerce on which they subsist
has barely risen from mid-depression levels.
Haiti would have less reason to complain if freight rates were uniformly
based on length of haul, and Haitian commerce were given equal oppor-
tunities, so far as concerns freight rates, in competing with other countries
in its trading area. But the evidence points to the fact that other countries,
with approximately equal hauls in many instances enjoy lower freight rates.

*On cotton exports and on imports from American East Coast and Gulf Ports.





HAITI: REPORT OF FISCAL REPRESENTATIVE


A comparative study of freight rates, made by this office in March, 1937,
revealed the following:
The freight on shipments of coffee from Haiti to New York amounts
to $0.35 per 100 pounds, whereas the charge on coffee shipped from Puerto
Rico to New York is only $0.30 per 100 pounds.
Until the recently announced increase, shipments of low density cotton
to Europe (the principal market) cost $18.225 per ton from Haiti, and
$14.50 per ton from Tampico and Vera Cruz. For high density bales the
rates were $16.28 on Haitian cotton and $14.50 on Mexican cotton. We
have seen that the new rates increase Haitian freight rates by 33 1/3 per
cent (low density bales) and 27 per cent (high density bales), giving the
added disadvantage of establishing a lesser rate increase on cotton baled
in a form which Haiti is not equipped to produce.
On the side of imports, we find that it is cheaper to ship cotton goods
from New York to Puerto Rico, than from New York to Haiti. Dried fish
can be shipped more cheaply from England to Kingston than from England
to Port-au-Prince.
Structural steel can be shipped from New York to Puerto Rico and from
England to Kingston, Puerto Rico and Cristobal, more cheaply than to
Haiti.
Steel roofing sheets can be shipped more cheaply to Tampico and Vera
Cruz from New York than to Haiti. The same applies in the case of ship-
ments from England to Kingston and Puerto Rico.
Jamaica, the Dominican Republic and Puerto Rico can obtain cement
from Europe at cheaper rates than Haiti. The same countries can obtain
automobile trucks from New York at cheaper freight rates.
Just before the present writing, this office published in the October issue
of the Monthly Bulletin, the followingadditional comments:
The depressed condition of the coffee market gives added justi-
fication for the protests this office had made in recent issues of
the Bulletin against the general advance in freight rates, affecting
nearly all Haitian import and export commodities. The new rates
on imports from the United States went into effect on November
1, 1937, as scheduled. The decision was made despite vigorous
protests by the government and by business interests in Haiti.
In the August Bulletin this office. made it clear that Haitian .
commerce could not, with fairness, be expected to pay higher
freight rates simply because business conditions elsewhere were
improving.
Business in Haiti had not made comparable gains-nor had it
in other coffee countries. Yet ocean carriers insisted on exacting
higher rates when merchants were less able to pay them. Ship-
owners must recognize the fact that they are doing business in
countries where business is still depressed, and that they must
revise their rates accordingly if they are to get cargoes. Higher
freight rates at this time of unprecedented low coffee prices are
unreasonable and unbearable.





HAITF: REPORT OP FISCAL REPRESENTATIVE


Shipowners must agree! to share with Haitian business the
effects of lower commodity prices. They must recognize the fact
that purchasing power has been seriously impaired. Their action
was untimely and uncalled for. To business interests in Haiti
their decision can only appear as a totally unjustifiable levy
against Haitian commerce.
The good will of the shipowners can be made manifest by only
one action: that is a reasonable and immediate reduction in
freight rates.
Tourist Trade
There was no change of significance during 1935-36 in the number of
tourists visiting Haiti or in the number of vessels catering to tourists and
touching at Haitian ports.
Of the large tourist. ships visiting Port-au-Prince on special- winter
cruises, the number increased by'two in 1936-37 from 15 ships in 1935-36.
Haiti still obtains a very small share of this class of the tourist trade. The
larger ships ordinarily remain in port only a few hours and tourists have
little opportunity to become acquainted with the more interesting features
which Haiti has to offer to them.
Tourists would do well to investigate how many hours in each of the
various ports are promised before buying tickets on cruise ships. Many
who have hoped to see the Haitian countryside and beautiful mountain
drives have found the short time actually allowed was merely to justify the
advertised stop.' It was not'worth while to come ashore for so short a time.
Of greater importance to'-Haitiare the'calls at Haitian pdrts.by vessels
sailing on regular schedules through6uttthe year anid catering to the tourist
trade as well as to the ordinary passenger and cargo business. These ships
remained in number the same as in 1935-36, although the number of tourists
carried has increased. Money spent by these tourists in Haiti forms a not
inconsiderable item of national income, although Haiti's share of these re-
venues is .still very small in comparison with the large sumis spent each
season by tourists in Jamaica, Cuba and other West Indian countries. It will
alppreTtly take a long period of development before the ,tourist trade in
Iaiti approaches the importance it already has in these other countries.
There are good prospects for. improvement in the tourist trade in the
1937-38 season. The schedule for that season calls for a greater number of
cruise ships touching at Port-au-Prince. One company, whose ships had
not previously called at Haitian ports, has announced regular weekly calls
at Port-au-Prince in the latter part of the tourist season.
An American company whose ships for many years have carried freight
and passengers to Haiti is expected to place in operation within the next
two years three new ships of the most modern type. It is reported that these
ships will solicit tourist trade during the winter season.





HAFTI- REPORT OF FISCAL REPRESENTATIVE


Foreign Commerce by Months
Chart No. 1 shows graphically the movement of exports and imports
throughout the period of the depression and subsequent slow recovery. It
shows also the marked seasonal variation in the value of exports and the
close relation which imports ,bear to the inonth-to-emonth swings of the
export trade.
Probably the least desirable feature of the economic set-up- of Haiti in
the extreme periodicity to which exports are subject. Wide fluctuations in
exports produce corresponding swings in government revenues. Seasonal
variations in revenue returns make it necessary that relatively large treasury
cash reserves be maintained to cover expenditures iii months when revenues
CHART No. 1
VALUE OF TOTAL IMPORTS AND TOTAL EXPORTS, BY MONTHS
FISCAL YEARS' 1929-30 TO 1936-37
IA.LIO ss3 Org





Ii oe n I
/ -"EXPORTrS "





I-- -I I I' .
T-i






Z/9-30 I 13-JI 1f 9-32 1931-33 193 4. 93-3S /d35-6 -35-9 7

decline to seasonal low levels. Special vigilance must therefore be exercised
in observing the sudden changes which take place in the flow of exports
and imports, for these changes react quickly on revenues and require cons-
tant administrative efforts toward maintaining the proper relationship
between government receipts and expenses.
The export curve in 1936-37 reflects the small size of the coffee crop.
At the same time, from the fact that export commodities other than coffee
were generally favored in 1936-37 by greater export production and'higher
prices, there was a visible tendency for. the export curve to flatten out in
the months when coffee exports normally are lacking.- But even with the
emphasis during the past season on commodities other than coffee, it is
clear that the export trade has lost little of its characteristic periodicity.





HAITI! REPORT OPI FISCAL, REPRESENTATIVE'


Some few years must pass before bananas, sisal anhd other non-seasonal
products can be increased in quantity to the point where they can over-
come appreciably the influence of the coffee crop on the export curve. But
definite progress in being made in the right direction.-
Imports in 1936-37 were largely concentrated in the December-March
period. For the first time in two years, imports in each of those months
(except February) exceeded four million gourdes in value. The usual
seasonal rise in imports at the end of the fiscal year was somewhat steeper
than it had been at the end of each of the previous two years, and the rise
began a month sooner .than in 1935-36. Prospects of a good coffee crop
in the 1937-38 season encouraged import purchasing, whkch continued
active until very recently.
A striking characteristic of the import curve is the almost invariable
year-end rise in anticipation of the sale of the coffee crop. This movement
gives a good indication of what merchants think of crop (and business)
prospects during the subsequent season of export activity. The relatively
high level of imports at the end of the fiscal year 1936-37 indicates that
merchants anticipated generally improving 'conditions in 1937-38, an
expectation which may not be fully borne out, because of the recent slump
in world coffee prices.

Commodities Imported
Importations in 1936-37 reached a total value of Gdes. 46,075,660. This
figure is higher than corresponding totals recorded in any previous fiscal
period since .1930-31, when imports were valued at Gdes., 47,881,591.
Compared with the total of Gdes. 37,920,626 reported in 1935-36, imports
in 1936-37 rose in value by Gdes. 8,155,034, or by 21.51 per cent.
For the most part, this'pronounced gain in import activity, as we have
seen, resulted from purchasing' power-accumulated the previous year when
exports exceeded imports in value by Gdes. 9,317,968. The general rise in
prices of import commodities was also a contributing factor.
Of the general rise in import values, amounting to more than eight
million gourdes, the important group which includes chiefly cotton piece
goods accounted for 76 per cent of the gain. Increased gasoline and kero-
sene imports accounted for another 8 per cent, and soap imports accounted
for 4 per cent.
The gain in values was general throughout the list of.other important
articles of foreign origin. The only exceptions were: 1) the foodstuffs
group, which remained practically stationary in both years (although in
quantity imports declined in 1936-37); 2) liquors and other beverages; 3)
household utensils; and 4) chemical and pharmaceutical products.





HAITI: REPORT OF FISCAL REPRESENTATIVE


The relative importance, percentagewise, of leading groups of imported
articles in each of the last two years, measured by values, is shown below:
1936-37 1935-36
Per cent Per cent
Textiles, clothing, etc................................ 36.5 28.0
Foodstuffs .................................... 18.1 22.0
Gasoline, kerosene, etc................ .......... 5.6 5.4
Iron and steel products.......................... 4.0 4.2
Soap ......... ........ .............................. .... 3.9 3.9
Automobiles and trucks.......................... 2.7 3.2
Lumber .................................................... 2.0 2.4
Chemical and pharmaceutical products...... 1.9 2.3
Household utensils...... ............................ 1.9 2.4
Agricultural implements, etc..................... 1.5 1.5
Jute bags, etc............................................ 1.5 2.1
Tobacco products ................................ 1.3 1.4
Liquors and beverages............................ 0.7 1.2
All other imports.................................... 18.4 20.0
Total ."...................................... 100.0 100.0

In most years the groups which include textiles and foodstuffs together
account for about half of all import purchasing. This was true to the
decimal point in 1935-36. In 1936-37, the share represented by these groups
rose to 54.6 per cent.
It will be observed that this abrupt change was due exclusively to the
rise in textile imports, of which cotton piece goods form by far the greater
part. In value, imports of textiles increased from Gdes. 10.640,146 in
1935-36 to. Gdes. 16,834,190 in 1936-37. The gain amounted to Gdes.
6,194,044 or 58.2 per cent. Cotton prints, plain dyed cotton cloth, and
similar cotton goods of the cheaper varieties registered a rise in value
of Gdes. 5,297,000, or 63.4 per cent. In terms of value, the gain in imports
of plain woven cotton goods amounted to 65 per cent, while the gain in
cloths of other weaves amounted to 60 per cent. Consequently, there was
a tendency for buying to turn toward the plainer qualities.
This trend is further confirmed by examination of figures for imports
in terms of weight. Whereas textile imports gained by 58.2 per cent in
value, imports of the same goods more than doubled when, comparison is
made of the total weight recorded for each year.
Included in the textile group are manufactured cotton goods (clothing),
silk goods and woolen goods. Gains in imports in 1936-37 were recorded
under these classes, but the rise was much less, proportionately, than the
rise in importations of cotton piece goods. Silk imports were only Gde.s
2,119, or 1.6 per cent greater than in 1935-36. Woolen goods similarly
increased in value by Gdes. 36,617, or by 37.3 per cent; and cotton clothing
by Gdes. 679,874, or by 47.8 per cent.
Next to textiles, foodstuffs form the most important single group of
imports. About half of food imports normally consists of wheat flour.
Rising prices in 1936-37 produced a gain in the value of flour imports





HAITI: .REPORT OF. FISCAL REPRESENTATIVE


amounting to Gdes. 297,665, or 7.7 per cent, although in quantity flour
imports declined by 1,309,078 kilos, or by 11 per cent, when comparison
is made with the 1935-36 figures.
Flour imports are still at about half the pre-depression level. Ordinarily,
annual purchases of flour exceeded twenty million kilos in years prior
to 1932, atnd a peak of forty million kilos was reached in 1923-24. Domes-
tic food production evidently is easily capable of replacing imported foods
in times of economic depression.
Fish is also a leading imported food. Fish imports, consisting mostly
of pickled or smoked fish, totalled 3,426,148 kilos in 1936-37, compared
with 3,495,595 kilos in 1935-36. In quantity the decline amounted to only
2 per cent. In value, imports declined by Gdes. 197,753, or by 13.1 per cent.
Rice imports in 1936-37 declined in value by Gdes. 120,395, or by 22.0
per adnt when comparison is made with the 1935-36 total. In quantity,
the decline amounted to 501,413 kilos, or 25 per cent.
Imports of meat products in various forms declined in. quantity by 38,607
kilos, or by 12.3 per cent, and in value by Gdes. 52,072, or by 12.3 per cent.
Foodstuffs other than those mentioned were valued at Gdes. 2,130,618
in 1936-37, compared with Gdes. 2,061,382 in 1935-36. In most of the
groups under this classification, imports in both years remained about the
same in value, but quantities declined in 1936-37.
Gasoline imports in 1936-37 exceeded ten million liters for the second
time on record. The previous peak was reached in 1929-30, when imports
were a trifle greater. In quantity, receipts totalled 10,070,374 liters in
1936-37, or 4,328,902 liters more than in 1935-36. The gain amounted to
75.4 per cent.
It should not be concluded from these figures that gasoline consumption
in Haiti registered a corresponding gain during the year. The gain in
imports was due simply to the receipt of large stocks for storage. Oil
companies established in Haiti have extensive storage installations. Gaso-
line is imported infrequently, a'nd individual shipments are usually large.
Heavy imports in 1936-37 were to replenish stocks depleted because relative-
ly little gasoline had been imported the previous year.
In value, gasoline imports increased by Gdes. 456,546, or by 80 per cent,
from the sum of Gdes. 569,236 recorded in 1935-36.
Imports of motor vehicles have mot increased during the past four years,
and gasoline consumption in all probability has remained fairly stationary.
Calculated on the basis of imports during the period, actual consumption
of gasoline is probably about eight million liters per year.
Kerosene imports in 1936-37 increased in quantity by 245,166 liters, to
a total of 4,343,901 liters. The gain in quantity amounted to 6 per cent,
but in value total imports declined by Gdes. 116,461, or by 13.6 per cent.
Imports of kerosene were valued at Gdes. 740,922 in 1936-37.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Manufactured articles of iron and steel (exclusive of household utensils,
and agricultural implements) registered a gain of Gdes. 315,745, or 27 per
cent, in value imported when comparison is made with the total value of
Gdes. 1,525,018 recorded in 1935-36. Galvanized roofing sheets and similar
materials of iron and steel, which regularly, constitute about one-third of
inlports in this category, increased in value of imports by 30.2 per cent.
These Aimports, used chiefly in the building trades, indicate some gain
in building construction during the past year. Cement imports increased
both in quantity and value. In quantity, cement imports increased by
3,642,579 kilos, or by 66.2 per cent. In value, a similar gain of Gdes.
227,106, or 85 per cent, was recorded in making comparison with the
1935-36 total. Lumber imports, on the other hand, declined by 15.5 per cent
in quantity, although, in. terms of value .lumber imports were practically
the same in both years.
It has been remarked that motor vehicle importations have shown no
general gain. Figures for 1936-37 show a total of 307 automobiles and
trucks imported in that year, compared with 323 units the previous year.
In value, however, imports gained slightly (by Gdes. 33,314, or by 2.7
per cent) during the past year.' The gain in value was due to rising prices
as well as to the fact that commercial vehicles constituted a greater pro-
portion of automotive im(portls in 1936-37. One-third of motor vehicles
imported in 1936-37 were of. the commercial type, compared with 24 per
cent in 1935-36.
Household utensils declined. in value by 5.8 per cent. when comparison
is made with the 1935-36 total. Goods in this classification consist mostly ,
of enamelled ware imported mainly from Germany. In value, imports of
household utensils amounted to Gdes. 882,203 in 1936-37, as against a
corresponding total of Gdes. 936,910 in 1935-36. .
Imports of soap, consisting:largely of common laundry soap, increased
in quantity and value in 1936-37. In quantity, soap imports rose by 394,955
kilos, or by 14 per cent, from 2,825,910 kilos recorded in 1935-36. The #
gain in value amounted to Gdes. 319,612, or 2.2,per cent. Soap imports in
1936-37 were valued at Gdes. 1,796,442.
Chemical and pharmaceutical products of all kinds were valued at Gdes.
862,864 in 1936-37. The latter figure is Gdes.' 42,752 less than the corres-
ponding total for 1935-36, indicating a decline of 4.7 per cent. Most of
the decline was due to decreased receipts of patent medicines from France
following the removal of preferential tariff rates on trade-marked French
specialties, accorded by the rider to the former trade agreement with
France. German and American patent medicines to a small extent have
replaced similar French preparations. Imports of .the latter declined .in
value by Gdes. 63,525 in .1936-37 when comparison is made with the
previous year.






HAITI: REPORT OF FISCAL REPRESENTATIVE 33

CHART No. 2
QUANTITIES OF LEADING COMMODITIES EXPORTED AND IMPORTED
FISCAL YEARS 1916-17 TO 1936-37

EXPOR T, IMPO/ TS
MILLIONS OF K/LOS IILLIONS. OF -/LOS
COFFEE A TEXTILES

40 / I./\I\


MILLIONS OF *f/L05.

-/51./A I-











.ML/.ONS. OP I/LOS_
i SUOAe






BAIANAN5


lo:---^- ~rl-.




v AV \ VV\
CACAO
0 C .4 C 4 0


M/LL/ONS OF ITf1LOS,


40A ',A -y

A
M/LLION3 OF /f/LOS






M ILL ON 1.5 H LF/ \
Mlo------------L17---'*--
GASOL/NE





SOAP





NUMBE.
AUTOS ANO
R7//Stcns tA


nss -lu-an-\,=LP^JW61





34 HAITI: REPORT OF FISCAL REPRESENTATIVE

Denunciation of the trade convention with France similarly affected im-
ports of wines and other beverages. In value imports of beverages decli-
ned by Gdes. 140,143, or by 30.1 per cent, to a total of Gdes. 325,480 in
1936-37. In quantity, imports of beverages fell off by 49,177 liters, or by
15.9 per cent. Imports of French wines declined in value from Gdes.
239,965 in 1935-36 to Gdes. 83,728 in 1936-37. Imports of beer, on the
:other hand, purchased mostly from Germany, increased in value from
Gdes. 65,766 in 1935-36 to Gdes. 92,900 in 1936-37.
-The group of manufactured articles of fibre other than cotton, and
:consisting chiefly of jute bags used in the coffee and sugar trades, declined
in value of imports from Gdes. 811,252 in 1935-36 to Gdes. 683,436 in 1936-
137, or by 15.8 per cent. Imports of jute bags were valued at Gdes 717,926
in 1935-36 and Gdes. 554,818 in 1936-37, a decline of 22.7 per cent. In
quantity, however, imports declined by only 7.8 per cent. The sharp decline
in value, relative to quantity, was due to the purchase of high-priced bags
from France in the early part of 1935-36 when the Haitian government
made special efforts to promote the purchase of French bags for the coffee
trade. France was the principal supplier of jute bags in that year at an
average .price of Gde. 1.20 ,per ki'lo. India was the principal supplier in
1936-37, at a price of Gde. 0,56 per kilo.
An increase of Gdes. 122,507, or 21.2 per cent, in the value of agricultural
machinery and implements imported in 1936-37 gives evidence of the efforts
being made to improve coffee preparation by purchases of new machinery.
Imports in this group, which includes coffee machinery, were valued at
Gdes. 700,587 in 1936-37, compared with Gdes. 578,080 in 1935-36. In the
previous five years imports under this classification had averaged, in total
value, less than Gdes. 500,000 annually. In the 'last twelve years, the 1936-37
;figure was exceeded only in 1928-29 (Gdes. 700,964) and 1925-26 (Gdes.
"750,605). Since the beginning of the present drive to promote the use of
!mechanical aids in the preparation of coffee, it is probable that at least
Gdes. 300,000 have been expended for imported coffee machinery, ranging
from small hand depulpers to elaborate installations for drying coffee.
i Imports of tobacco in all forms increased in value by Gdes. 58,813, up
,10.3 per cent from a total of Gdes. 522,771 recorded in 1935-36. In value,
most tobacco imported is American cut tobacco used locally for the manu-
facture of cigarettes. Imports of this variety, including also small quan-
:tities of pipe tobacco, etc., declined in value from Gdes. 356,666 in 1935-36
to Gdes. 281,891 in 1936-37. Imported cigarettes on the other hand, in-
creased in value from Gdes. 148,128 in 1935-36 to Gdes. 272,625 in 1936-37,
,or by 84 per cent.
SImports of perfumes and cosmetics declined in value by fifteen per ceut.
!Purchases from France, formerly the principal supplier, were more than
cut in half in 1936-37 when comparison is made with the previous fiscal
year.





HAITI: REPORT OF FISCAL REPRESENTATIVE 35

Comparing the same years, imports of leather goods, including shoes,
declined in value in 1936-37. The same is true of glassware, and rubber
tires. Imports of printed matter, paper, radios and paint remained prac-
tically the same in value in both years.
In the machinery group, imports in practically every classification record-
ed gains in value in 1936-37. This is ipartfouda'rly true of sugar machinery
(up Gdes. 162,197 from only Gde's. 69,729 in 1935-36); unclassified machi-
nery (up Gdes. 407,000); sewing machines, power pumps and electrical
machines and appliances. Imports of brassware, tinware, earthenware,
matches, and fuel ol also increased in value in 1936-37.
The table below shows C.I.F. prices of various leading imported com-
modities during the past four years computed from customs records:
1936-37 1935-36 1934-35 1933-34
Unit Gourdes Gourdes Gourdes Gourdes
Cement....................Kilo 0.05 0.05 0.05 0.06
Fish......................... ilo 0.38 0.43 0.49 0.43
Wheat flour..............Kilo 0.39 0.32 0.30 0.28
Meats.......................Kilo 1.35 1.35 1.11 0.75
Rice........................ Kilo 0.28 0.27 0.27 0.26
Liquors................... Liter 1.25 1.50 1.78 1.75
Lumber................... Cubic meter 106.66 90.29 89.61 99.95
Gasoline.................. Liter 0.10 0.10 0.11 0.15
Kerosene................. Liter 0.17 0.21 0.24 0.23
Soap....................... Kilo 0.56 0.52 0.46 0.47
Cotton Textiles........ Kilo 4.08 3.58 3.31 3.31
Kerosene, fish and liquors were the only leading imported commodities
where prices moved contrary to the general rising trend. Pickled and
smoked fish in 1936-37 were being imported in greater quantities direct
from Canada, at a substantial saving in freight and handling costs, whereas
formerly much Canadian fish was shipped to Haiti via American ports.
The decline in prices for wines, liquors, and other beverages was due to
a change in consumers' habits. Beer consuiption has increased to a marked
extent during the past two years, as well as. consumption of cheap Italian
and American wines. This has reduced purchases of higher-priced French
wines, which for the past year and a half no longer benefited from pre-
ferential tariff rates.

Commodities Exported
With coffee the leading export crop, and the 1936-37 crop worth nearly
six million gourdes less than the crop of the year before, total exports
recorded a decline in value from'the 1935-36 figure of only Gdes. 2,384,144.
From the sum of Gdes. 47,238,594 in 1935-36, total exports declined in
value to Gdes. 44, 854,450 in 1936-37, or by 5.05 per cent. But coffee exports
alone declined in value from Gdes. 29,344,792 in 1935-36 to Gdes. 23,392,957
in 1936-37, a drop of Gdes. 5,951,835, or 20.28 per cent.
These figures indicate, of course, that export commodities other than
coffee registered a sharp gain in value during the past year. The gain was




36 HAITI: REPORT OF FISCAL REPRESENTATIVE

not confined to one or two commodities, but included practically the entire
export list with the exception of a few minor export products such as
molasses and honey.
When comparison is 'made with the previous year, banana exports alone
rose in value by Gdes. 1,105,776; sisal by Gdes. 810,691; cotton, by Gdes.
441,726; cacao, by Gdes. 434,321; goatskins, by Gdes. 368,781 raw and
refined sugar, by Gdes. 260,546; logwood, by Gdes. 168,659; and cotton-
seed cake, by Gdes. 141,750.
In part the gain in exports of products other than coffee was due pri-
marily to greater quantities produced. This was particularly true of ba-
nana exports, which increased in quantity shipped by 122.8 per cent. Gains
in quantities exported were also recorded in the case of logwood (up 28.3
per cent); goatskins (up 26.5 per cent) ; and sisal (up 9.4 per cent).
Primarily, however, the gain in value of exports may be ascribed to the
general rise in world commodity prices which characterized the year. As
computed from customs records, the price rise affected every Haitian ex-
port commodity of any importance with the exception of molasses. The
average price received for cacao was double that of the previous year.
Sisal and cotton also benefited from substantial price gains.
Average prices of leading Haitfan exports, as computed from customs
records, are given below for each of t'he last two fiscal years:
1936-37 1935-36
Gourdes Gourdes
Coffee..............................per kilo 0.943 0.813
Cotton.............................. per kilo 1.421 1.260
Raw sugar........................per kilo 0.124 0.108
Sisal.................................per kilo 0.618 0.532
Bananas..........................per stem 1.414 1.296
Cacao................................per kilo 0.697 0.345
Goatskins.........................per kilo 0.374 0.250
Cottonseed cake..............per kilo 0.128 0.075
Logwood.........................per kilo 0.041 0.039
Molasses...........................per kilo 0.036 0.050
Honey........................... per kilo 0.343 0.320

Although coffee is still by a wide margin the leading export commodity,
the rapid gains made by the new banana industry and by other exports are
lessening the predominance of coffee in the export trade.
Coffee, in value, represented slightly more than half of the value of all
exports in 1936-37. Not since the war year, 1917-18, when coffee could not
be shipped, has the coffee crop represented so small a share of total export
values.
Coffee exports constituted 76.21 per cent of total exports in the five years
ending in 1930-31. During the next five years this proportion dropped to
67.41 per cent. In 1935-36, coffee exports amounted to 62.12 per cent of
total exports, and in 1936-37 the percentage dropped to 52.15 per cent.
Coffee at times has brought some measure of prosperity to Haiti. At
other times, capricious changes in price and in the size of crops have been





HAITI: REPORT OF FISCAL REPRESENTATIVE


responsible for serious economic difficulties. That Haiti in the 'past has
leaned too heavily on coffee has been all too evident. Efforts have been
directed constantly toward relieving the too great dependence on coffee.
Figures for the past several years show that unmistakable progress in
the right direction has been made. While poor crops and low prices have
played a part in lessening the importance of coffee on the export list, it
cannot be denied that general gains in export production and the creation
of new export industries such as bananas and sisal have brought a better
balance between the various articles which Haiti sells abroad.
Much as we would like to see coffee prices rise and Haitian production
increase, even greater satisfaction lies in seeing the deficiency in export
production filled by gains in other commodities. When bananas, sisal,
sugar, cotton and cacao individually share equally with coffee in im-
portance, Haiti can claim that it is no longer a one-crop country, subject
at any moment to the vagaries of world prices and to variations in the size
of the annual coffee crop.
Five export commodities in 1936-37 were sold at a total value of Gdes.
40,840,731. Together, they contributed in value 91.05 per cent of total
exports. The relative importance of these commodities in the export trade,
together with other products of less importance among exports, is shown
in the table below:
1936-37
Gourdes Per cent
Coffee ........................................ 23,392,957 52.15
Cotton ........................................ 7,665,135 17.09
Sugar .......................................... 4,082,487 9.10
Sisal ............................................ 3,822,569 8.52
Bananas .......... .............................. 1,877,583 4.19
Cacao .......................................... 1,001,347 2.23
Goatskins ...................................... 782,222 1.74
Cottonseed cake ............................ 652,814 1.46
Logwood ................. ................ 645,180 1.44
Molasses ......................... ............ 392,606 0.88
All other ...................................... 539,550 1.20

Total ................................... 44,854,450 100.00

Coffee

The 1936-37 coffee crop in size was one of the poorest of recent years.
Only.three harvests in the last twenty years were smaller.
Though disappointing in size, there were favorable new developments
which made the year in many respects a milestone in the history of the
Haitian coffee industry.
First, the industry learned that it can definitely and easily improve the
quality of its output. New coffee machinery, new curing methods, and a
better understanding of market requirements give assurance of better
average quality for future crops.





HAITI: REPORT OP FISCAL REPRESENTATIVE


Secondly, the industry learned that markets other than Havre are willing
and ready to buy Haitian coffee. The United States became a leading buyer
of Haitian coffee for the first time since the war. Export ouft'lets for coffee
were diversified to a greater extent than ever before.
Thirdly, the first general rise in world coffee prices in three years (which
rise unhappily has since vanished) brought a proportionate gain in the
money value of the Haitian crop. Average prices obtained for Haitian
coffee, as revealed by customs records, rose by 16 per cent from the average
of the previous year.
A statistical comparison of results in 1936-37 with those of the previous
year shows that:
1) In volume, coffee exports in 1936-37 totalled 24,806,858 kilos, com-
pared with 36,090,503 kilos in 1935-36. The decline amounted to 11,283,645
kilos, or 31.27 per cent;
2) Coffee exports in 1936-37 were valued at Gdes. 23,392,957, compared
with Gdes. 29,344,792 in 1935-36. The decline amounted to Gdes. 5,951,835,
or 20.29 per cent;
3) Average prices rose from Gde. 0.813 per kilo in 1935-36 to Gde.
0.943 in 1936-37.
The distribution of the crop by countries of destination showed striking
changes. Quantities exported, by countries, in each of the last two fiscal
years are given below:
1936-37 1935-36
Kilos (000's) Per cent Kilos '(000's) Per cent
Belgium ............... 5,623 22.7 5,645 15.7
France .................. 5,057 20.3 24,253 67.2
United States ............ 4,636 18.7 775 2.2
Italy ...................... 3,822 15.4 330 0.9
Denmark ............... 2,130 8.6 3,370 9,3
Netherlands .............. 921 3.7 342 0.9
Sweden ................... 894 3.6 172 0.5
Germany ............... 724 2.9 767 2.1
All others ................ 999 4.1 437 1.2
Total .........:...... 24,806 100.0 36,091 100.0
The United States and Italy both became important buyers of Haitian
coffee in 1936-37. The Netherlands and Sweden also greatly increased their
shares of the Haitian crop. Belgium and Germany purchased about the
same quantities as in the previous year. But purchases by France, due
to the continued application by France of the "general" tariff rate to Hai-
tian coffee throughout the year, dropped abruptly from the 1935-36 figure
by 19,195,896 kilos, or by 79 qper cent.
Denunciation by France of its commercial convention with Haiti had
naturally caused great concern in the Haitian coffee trade, for it had meant
the loss of a market which for many years had absorbed more than sixty
per cent of the annual crop. That in only one year's time it has been found
possible to place in other markets all coffee which normally would have
been sold to France is very gratifying.





HAITI: REPORT OF FISCAL REPRESENTATIVE


The entire 1936-37 crop was sold. No more than the usual small carry-
over remained at the year-end. And the crop was sold at prices which, as
we have seen, averaged sixten per cent higher than the average for the
previous year.
The sale of the last crop was by no means an easy matter. It required
the most intensive effort throughout the year to meet the requirements of
new markets. Methods in curing coffee were revolutionized. Exporters
purchased new coffee machinery, including several elaborate installations.
With government assistance, several thousand concrete drying platforms
were constructed for the use of growers in the leading coffee districts. The
buying of ripe coffee cherries from producers (rather than crudely pre-
pared beans) was begun on a large scale. The use of the wet process in
curing coffee was extended in regions where rainfall in the harvest season
interferes with drying and curing.
It cannot be claimed that these efforts had any great effect on the quality
of the 1936-37 crop, Ibut measurable results shoullid be recorded i'n the
new crop being marketed at the time of the present writing. The coffee
trade is much better equipped now than it was a year ago to give better
preparation to the crop.
In particular, the government's large scale program for building cement
drying platforms should remedy lithe "earthy" taste characteristic of coffee
brewed from new crop beans which have been dried on crude drying plat-
forms of packed earth, instead of on cement surfaces. Cup-testing by
experts had revealed this defect in Haitian coffee. Enough concrete plat-
forms have been built so that it is confidently expected that the new crop
for the most part will be free of objectionable flavor.
The cup-testing station at Port-au-Prince, established in July, 1936,
through the initiative of Mr. C. A. Mackey, President of the New York
Coffee and Sugar Exchange, has continued in operation up to the present
time. The services of an expert coffee-taster have been continually avail-
able to the coffee trade at the cup-testing station.
Grateful recognition is made of the continued interest of Mr. Mackey in
the Haitian coffee industry and of the assistance which he has given in,
many ways toward meeting the problem of selling in the new American
market.
Coffee is a plant which is notoriously subject to wide variations in yield.
The trees are particularly sensitive to rain, sun and temperature variations,
resulting in wide fluctuations in the size of the annual crops. This is true
in other coffee countries as it is in Haiti.
The desire to compensate for these variations and to permit excess sup-
plies in years of abundant crops to supplement deficient supplies in lean
years in part explains the origin of the top-heavy structure by which BYazil
for 31 years attempted single-handed to control coffee prices.






HAITI: REPORT OF FISCAL REPRESENTATIVE


It has been the unfortunate experience of Haiti that during the past six
years the annual variations in the size of the crop have been particularly
violent. A glance at the coffee curve in Chart No. 2 shows to what extent
this is true.
In these six years alone the coffee trade has seen a crop of record size
(1932-33) and a crop of record low yield (1934-35).* The points of high
and low yields were much closer together in the years prior to 1931-32.
The first obvious, but questionable, explanation is that the destruction
of coffee values in the depression period affected yield; that all coffee grown
was not harvested and sold when prices were lowest.
This explanation is not borne out ;by any available evidence. An all-
time record for volume of exports was set in 1932-33. In the same year,
prices descended to the lowest level recorded with the exception of 1935-36.
So far as is known, all of the yearly crops were harvested, and coffee
remaining unsold, or not yet delivered, at the end of each year was a negli-
gible factor in the figures for total exports.
Our only other explanation is that yield has continued to be affected only
by climatic conditions; and that Haiti in the'last six years has been lucky
and unlucky, in this respect, to very great extremes.
The already considerable length of this period of extremes in the pro-
duction curve gives hope that we may soon see a flattening out of the
export curve. At least, probabilities would seem to favor movement in
that direction.
When to variable production is added the fact that coffee in addition is
subject to extremely wide price variations (despite Brazilian attempts to
control prices) it can be seen that Haitian commerce, with more than half
of business represented by the coffee trade, is in a far from enviable po-
sition. And at the present writing the outlook for coffee is more uncertain
than ever, because of the entrance of Brazilia' coffee in free competition
with other coffees on world markets.
The history of Haitian coffee prices over a period of more than two
decades is presented in Chart No. 3. This is the first time coffee prices
have been given in this form'in these reports.
To permit a proper understanding of the price chart, it should be noted
that the curve represents average monthly prices for all grades of Haitian
coffee combined. Yearly averages are shown in the years prior to 1923
when monthly data were not available. During the years from 1930 to 1936
prices represent F. O. B. quotations furnished to exporters by their c.,s-
toniers abroad. During the 'balance of the period, prices were computed
on the !basis of exporters' customs declarations. While statistically Ihese

*Record exports of nearly fifty million kilos in 1918-19 did not mean record production. Epo in
year in reality were composed of two crops. The 1917-18 crop in large part was not deliver rd in that r
because of the war and shortage of cargo space. in hat year




HAITI: REPORT OF FISCAL REPRESENTATIVE


methods leave much to be desired, it is nevertheless believed that over the
long period taken for the study, the ,price curve gives a reasonably accurate
picture of the average values received for Haitian coffee.
Since prices for "tri'age" coffee, for example, are included in the compu-
tations, it sometimes occurs that the presence or absence of this cheaper
coffee in the export figures will make prices in some months appear to be'
out of line with world prices. On the whole, howqvdr, ithe curve' in its
major swings follows with surprising accuracy the curve of world coffee
prices as represented by Santos No. 4 spot coffee prices in New York,
although Haitian coffee consistently has maintained a premium in relation
to Santo prices.
CHART No. 3
AVERAGE COFFEE PRICES, F.O.B. HAITIAN PORTS
FISCAL YEARS 1916-17 TO 1936-37
GOURDE.5 PEe tI/LO
2-------------- --------- -------------------















1916-17 to 19SI-23 214 24-2S 2-26 526-Z7 -Z8 Z8-9 Z9-030-3/ 31-32 31,33 33-34 3#-- 3-36 -37T

Prices obtained for Haitian coffee in the war years and again in the
1921-22 commodity price depression were not much higher than they have
been during the last several years. Generally speaking, however, prices
for Haitian coffee during the past six years have been roughly half the
figures recorded from 1924 to 1929.
The price chart is particularly instructive in the light of the very recent
developments in the coffee trade which threaten to bring serious economic
consequences to those coffee countries which are unable to produce quality
coffees at cheap prices. Fortunately, Haiti (so we confidently believe) can
Produce, and is producing quality coffee and at a cost as cheap as the
cost to any other country producing the same quality coffee.
Although events in the coffee world which occurred in Noveimber, 1937.
do not belong chronologically in a report covering the Haitian fiscal year





42 HAITI: REPORT OF FISCAL REPRESENTATIVE

ending September 30, 1937, this report, written as these events are taking
place, can hardly avoid some mention of them. We refer, of course, to
the sweeping destruction of coffee values through the decision of Brazil
to reduce its export tax on coffee by approximately the equivalent of
$0.016 per pound and to permit Brazilian coffee to enter into free compe-
tition with other coffees.
This office, in its Monthly Bulletin for October, 1937, commented on
the coffee situation as follows:
From a long-term point of view, the effect on the Haitian coffee
Trade should be favorable. Haiti can produce good coffee as
cheaply as any other country. Open competition should stop
excess production in countries which are marginal producers.
Markets have been relieved of the constantly overhanging threat
that Brazil would discard its coffee price control. It had. long
been evident that coffee valorization was a failure. Its final
abandonment has relieved the coffee markets of the depressing
effects of uncertainty as to when this final step would be taken.
The probable effects on this year's crop give less room for
optimism. Trading in coffee has been badly demoralized and
some time may have to ,pass before we can know definitely the
price relation between Haitian coffee and coffees from other
countries.
In Haiti's favor is the fact that the quality of its coffee has
definitely improved. It is expected that the market will accord
Haitian coffee a place among the better quality mild coffees,
which will give it a higher quotation in relation to other coffees.
The higher rating will overcome at least some of the general
lowering of the coffee price level.
But in the last analysis, we cannot ignore the fact that lower
coffee prices, and weakness in other commodity markets, par-
ticularly cotton, have brought an unwelcome reversal of the
business trend in Haiti.
It would serve no purpose to discuss the question as to whether or not
Brazil took the best course of action in choosing so abrupt a way of
terminating an unsuccessful experiment in price fixing. But we can point
out the probable consequence to Haiti and a proper course of action.
Brazil's decision may prove to be catastrophic to the coffee industry of
countries where costs already are high, profits low and where the output
competes only with Brazilian coffee as to quality. Fortunately, the Haitian
product need not be classed with such coffees. Haiti is a low-cost, producer.
Its output is not plantation-grown, involving large sums of invested
capital, and relatively inflexible charges for overhead. In general it is
not an industry organized so elaborately that a small price change must
unavoidably make the difference between profit and loss; between harvest-
ing the crop, or allowing it 'to rot on the trees; between cultivating the
coffee farms, and allowing the trees to go intended.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Cost of production in Haiti, relatively, is very low. Coffee is a family
industry. There is no labor problem. There are no large mechanical ins-
tallations.
Profits from the sale of coffee in Haiti can be as great as the govern-
ment can afford to make them. In other words, the government,;:by redtc-
ing coffee export duties, can bring profits to producers, middlemen and
exporters where otherwise there would be a loss. The coffee indcustr'yin
Haiti is keyed to a coffee export tax of approximately $0.03 per pound. The
tax provides a margin within which the government can act (if and When
it can make the necessary compensatory adjustments in its tax structure,
for the benefit of the coffee trade as a whole).
The coffee export tax has been criticized in the past as obstructing ex-
ports, as unsound economically, and as an iniquitous form of raising
revenues. This criticism was justified then to a considerable extent. Un-
f.ortiutnately the country was occupied with other proiblemp. It refused
to take the steps necessary to adjust its governmental financial structure
to a plan that was designed to permit progressive removal of this export
tax on coffee. But today, ,dhe situation has changed.
We known now that so long as Brazil (and other coffee countries) hold
the tremendous power over the coffee industry which comes from artificial
control foreign exchange, export quotas, production limitations and
export taxes- it is perhaps very fortunate that the Haiti'an ridkustry is
keyed to a similar tax, giving the government the power to compensate
for abrupt changes such as have been brought about in Brazil by govern-
ment fiat.
Quality has been the chief problem of the Haitian coffee industry. But
there is no reason to suppose that Haitian coffee cannot very soon obtain
a preferred place in world markets among mild coffees. The Haitian
product has excellent liquoring qualities. Is is of the preferred arabica
variety. Intrinsically, it is a fine coffee, for which there is a definite demand
in dhe coffee ,market. Regardless of the' quantities of robusta coffee which
may be thrown upon the world market through Brazil's action, the mild
coffees of better varieties will always be preferred by coffee roasters. But
to obtain this preference, mild coffee must be scientifically harvested, cured
and graded. A p'rop'erly cured robusta coffee tray obtain a higher price
than a'n improperly cured arabica coffee.
The lesson is obvious. Haiti has only made a beginning in its efforts
to establish a reputation for its coffee. If the industry is to prosper, even
survive, there must be constant effort toward bringing out qualities
inherent in Haitian coffee, which qualities are only revealed if careful,
scientific, treatment is given the bean from the time it is harvested to the
time it reaches the roaster abroad.
The accomplishments in this direction recorded in the present report,
which are truly remarkable considering that they had their inception only






;HAITI: REPORT OF FISCAL REPRESENTATIVE


a year and a half ago, .are at best only beginning. The Haitian coffee
trade is in a rudimentary state indeed compared with the coffee industries
of the other countries where the coffee trade has become almost a science,
with distribution, marketing and financing organized to a high degree,
with technical equipment for curing, grading and otherwise preparing
coffee for market highly developed, and with efforts directed even toward
endeavoring to popularize coffee as a beverage through establishment of
coffee propaganda organizations in consuming countries.
The Haitian coffee trade certainly cannot be expected to devote the
capital and effort needed to supply the more costly and elaborate aids to
the production of superior coffees, but it can at least keep abreast with
developments abroad and in a modest way gradually improve its equip-
inent, its methods'of preparation and the quality of its product.
The loss of the French market gave the first' impetus towards better
preparation of Haitian coffee. The new developments in Brazilian coffee
and the drop in world prices should provide the added stimulus needed to
produce a superior coffee having a preferred place in the world market
among the coffees with which it must compete.

Cotton
In quantity, cotton exports in 1936-37 totalled 5,391,575 kilos, a decline of
362,580 kilos, or 6.3 per cdnt, from the total of 5,754,155 kilos exported
in 1935-36.
Considering apprehensions frequently expressed that the spread of boll
weevil infestation would cut heavily into cotton production, the figures
ifor cotton exports in 1936-37 are reassuring. To be sure, production in
infected regions has further declined, and the area of infestation has gra-
dually spread; but the production losses have been relatively small in all
of the cotton producing regions. Even in the Jacmel district, where the
boll weevil has been longest established, cotton exports have held up fairly
well.
Even more encouraging was the marked gain in cotton prices during
the past fiscal year. Computed from customs records, the 1936-37 crop
was sold at an average price of Gdes. 1.42 per kilo. A comparison between
this price, and average prices received for cotton in recent years is given
below:
Fiscal Years: Gourdes per kilo:
1936-37 ....................................................... ......... 1.42
1935-36........................................................... 1.26
1934-35................... ......................... ....... 1.24
1933-34........................................................... 1.29
1932-33.................................................... ........ 0.79
1931-32............................................... 0.64
1930-31................................................ ...... 1.02
1929-30................................................... ..... 2.18
"""""""""................ 2.18






HAITI: REPORT OF FISCAL REPRESENTATIVE


Sale of the 1936-37 crop at higher prices than those obtained the previous
year yielded a gain in the total value of the crop of Gdes. 441,726, or 6.1
per cent more than the value of the 1935-36 crop, notwithstanding the larger
quantity exported in 1935-36. The 1936-37 crop was valued at Gdes,
7,665,135. Except for nearly the same amount (Gdes. 7,666,639) received
for the 1934-35 crop, the value of the last year's crop was higher than that
of any previous crop since the 1930 crash in cotton prices.
Fortunately, most of the annual Haitian cotton crop is marketed in Fe-
bruary, March and April. These. months lin 1937, wieh 83 per cent of the
crop 'reached the custom houses, happened to coincide with peak prices for
the year quoted on world markets. Haiti therefore received a relatively high
return for its cotton sales.
The subsequent announcement of the American crop" estimate, showing
record cotton production and a large excess of world supplies, has badly de-
pressed world cotton prices. Spot cotton prices in New York dropped pre-
cipitously from $0.15 at the beginning of April to only $0.08 at the' end of
the fiscal year under report. There is little prospect, therefore, that next
season's cotton crop in Haiti will yield a figure anything near the value of
the last crop.
New boll weevil quarantine regulations were issued by the Department of
Agriculture in 1937. Infestation of cotton plants has spread northward
toward Saint Marc and westward froi Gonaives in the direction of Saint
Michel de l'Attalaye. Thus far, the Saint Marc region, where over a third
of the crop is grown, is free from infestation, as well as the central plain
of Haiti; but all other cotton producing regions are infected. It was discov-
ered early last year that the boll weevil had spread to La Gonave Island.
La Gonave cotton is now shipped from Port-au-Prince, instead of Saint
Marc, is order to prevent .the pest from spreading to non-infected regions.
This change in point of shipment accounted for an increase in the quan-
tity of cotton exported from Port-au-Prince in 1936-37. Cotton exports from
Port-au-Prince increased from 1,627.356 kilos in 1935-36 to 1,826,384 kilos
in 1936-37. Exports from Saint Marc declined in about the same proportion,
with shipments listed at 1,963,292 kilos in 1936-37, against 2,306,272 kilos
in 1935-36. From Gonaives, a total of 1,049,169 kilos was shipped in 1936-
37, compared with 1,173,273 kilos in 1935-36. Other ports are relatively
unimportant in the cotton trade. As usual, small quantities were shipped
from Cayes, Jaomel, MiragoAne and Cap Haitien. Shipments from these
ports aggregated 552,730 kilos, a decline of 14.6 per cent from 647,254 kilos
exported in 1935-36. Exports declined at each of these ports with the ex-
ception of Cap Haitien, where shipments rose by 22,229 kilos to a total of
66,235 kilos in 1936-37.
As usual, the United Kingdom in 1936-37 was the most important pur-
chaser of Haitian cotton, taking 41.7 per cent of the crop (50.8 per cent in
1935-36). France again was in second place, with 33.4 per cent (32.2 per






46 HAITI: REPORT OF FISCAL REPRESENTATIVE

(cent, in 1935-36). Germany bought 657,040 kilos in 1936-37, more than
doubling the total of 267,575 kilos purchased in 1935-36. Japan bought
656,723 kilos in 1936-37, compared with 504,826 kilos in 1935-36.
Cotton grown in Haiti for export is, of course, ginned in Haiti before
shipment. The cottonseed obtained from ginning is used as a raw material
for the manufacture by the domestic industry of lard substitutes, cooking
oil and soap. As a by-product of this industry, there are obtained consider-
able quantities of cottonseed cake which find a market abroad as fertilizer.
In value, exports of cottonseed cake in 1936-37 were eighth in importance
among Haitian export products.
Cottonseed cake exports in 1936-37 amounted to 6,347,055 kilos, valued
at Gdes. 652,814. Exports the previous year totalled 6,794,096 kilos valued
at Gdes. 511,064. There was an increase in value, therefore, in 1936-37
amounting to Gdes. 141,750, or 27.8 per cent although in terms of quantity.
exports declined by 6.6 per cent, or almost exactly proportionate to the de-
cline in cotton exports. Cottonseed cake was one of the Haitian export com-
rmiodities whioh (benefited most from the general rise in world commodity
prices during the past year.
SAs in the previous year, the United Kingdom purchased by far the
greater part (75 per cent) of all cottonseed cake exports.

Sugar
Sugar in 1936-37 benefited from the first substantial price increase
recorded during the past four years. On slightly smaller volume of exports,
shipments of raw and refined sugar increased in value from Gdes. 3,821,941
in 1935-36 to Gdes. 4,082,487 in 1936-37, a gain in value of Gdes. 260,546,
or 6.8 per cent.
As computed from customs records, the average F. O. B. price of raw
sugar exported from Haiti during.the past ten years has been as follows:
Fiscal Years: Gourdes per kilo:
1936-37 .............................................................................. 0.124
1935-36................................................................ ........... 0.108
1934-35......................................................................... 0.106
1933-34............................................. ............ ......... 0.108
1932-33.... .............................................................. 0.090
1931-32............................................................ .......... 0.108
1930-31 ..... ............ ......................... 0.140
1929-30................................................................... ........ 0.199
1928-29 .......................................................... ....... 0.326
1927-28............................ ........................ .......... 0.271

It will be observed that sugar prices have made a substantial gain from
mid-depression lows, although much ground will have to be covered before
prices return to the point where even efficient producers can obtain a return
on capital invested. This is particularly true of those industries located in
countries like Haiti which receive little or no benefit in the way of tariff
preferences in countries which offer outlets for the sale of sugar. Haitian





HAITI: REPORT OF FISCAL REPRESENTATIVE


sugar must compete at world prices. World prices have been depressed for
years by overproduction in countries where production has been artificially
stimulated by tariff preferences, special quotas and other attempts to favor
certain producing areas. Inefficient producers have kept in operation
through disposing of part of their output at a profit in protected markets,
meanwhile maintaining full capacity to produce by dumping excess supplies
on the world market at a loss. It is in this market that Haitian sugar must
compete, and at prices so low as to preclude profitable operations.
A world conference of sugar producing countries held in London last
spring arrived at an agreement which may ultimately help the sugar indus-
try from its present predicament. Haiti was represented at the conference, at
which the chief- object was to arrange concerted action for the limitation
of world sugar production. The agreement finally reached provided for the
regulation of the quanties to be exported from the principal producing
countries during a five year period. Haiti was allotted a "basic export
quota" of 32,500 metric tons.
If the procedure for the establishment of basic export quotas adopted
at the conference is adhered to by sugar producers, it is hoped that at least
some better adjustment between supply and demand ultimately will be
brought about. As to the Haitian industry, it is evident now that so far as
concerns its annual production, there can be little hope of any important
increase in volume in view of the policy adopted at the London conference.
But world prices, influenced by concerted efforts toward world limitation
of production, may, it is hoped, rise sooner or later to a level where ope-
rations in Haiti will be profitable. The price rise already noted came more
from the better general outlook of the industry, resulting from the helpful
attitude of participants at the' Londokh conference, rather than from any
tangible statistical improvement in the sugar trade.
Sugar exports from Haiti in 1936-37 fell by 2,397,967 kilos, or by 6.9
per cent, from 34,802,998 kilos exported in 1935-36. Figures include both
raw and refined sugar. As usual small quantities of refined sugar were
shipped abroad in 1936-37. Exports of refined sugar increased from 669,363
kilos in 1935-36 to 1,036,675 kilos in 1936-37.
The United Kingdom was'the destination of 86 per cent of raw sugar
shipped in 1936-37 (83.5 per cent in 1935-36). Refined sugar was marketed
chiefly in the Virgin Islands and in the United States.
Molasses, sold as a by-product of the single industrial plant in Haiti
which manufactures sugar for export, was shipped in smaller quantities in
1936-37 than in 1935-36. Shipments totalled 10,842,450 kilos, down 4.6 per
cent from 11,363,997 kilos exported in 1935-36. Customs records show that
prices received for molasses shipments in 1936-37 were 31.2 per cent under
the values received in 1935-36. Exports of molasses in 1936-37 were valued
at Gdes. 392,606, compared with Gdes. 570,451 in 1935-36. Molasses was
sixth in importance among Haitian export products.





A HAITI: REPORT OF FISCAL REPRESENTATIVE

Sisal
Both in quantity and in value, sisal exports in 1936-37 exceeded figures
for all previous years. Average, prices for the second successive year also
improved.
Shipments in 1936-37 totalled 6,197,243 kilos, a gain of 532,689 kilos, or
9.4 per cent, from the quantity exported in 1935-36. Previously, the peak
had been 1933-34, when 6,041,051 kilos were shipped.
More important still was the value of the 1936-37 crop, which was record-
ed at a total of Gdes. 3,822,569. This is a gain of Gdes. 810,691, or 26.9 per
cent, from the total value of Gdes. 3,011,878 recorded in 1935-36.
In the last six years, the sisal industry in Haiti has made remarkable
gains both in volume and in the value of its output. In value of exports,
sisal is now close to sugar in importance. Moreover, production is increasing
rapidly and new extensions to existing plantations are expected to bring in
considerably greater volume in the next year or two.
The average price of sisal exported in 1936-37 was Gde. 0.618 per kilo.
This compares with Gde. 0.532 per kilo in 1935-36, Gde. 0.407 in 1934-35,
and Gde. 0.418 per kilo in 1933-34. The low price for the period of the
depression was in 1932-33, when the price was Gde. 0.305, or less than half
the 1936-37 figure. The peak price for Haitian sisal was recorded in 1928-
'29; when a year's production of only 47,479 kilos was sold at an average
price of Gde. 0.932.
Nearly 90 per cent of all sisal produced in Haiti is sold in the United
States. Canada usually absorbs small quantities, and in 1936-37 Germany
for the first time bought Haitian sisal. German purchases totalled 319,744
kilos in 1936-37, or 5.2 per cent of production.
Sisal is produced on plantations, of which the largest is located near Fort
Liberty. Shipments from that port in 1936-37 totalled 5,519,610 kilos, or
89 per cent of total exports. Exports from Fort Libert6 amounted to
4,825,771 kilos in 1935-36.
Exports from Saint Marc declined from 526,593 kilos in 1935-36 to
355,139 kilos in 1936-37, but exports at Port-au-Prince rose to 188,256 kilos
in 1936-37 from 135,711 kilos in 1935-36. New areas planted to sisal in the
Saint Marc district are expected soon to bring about a marked rise in ex-
ports of sisal from that port.
For the first time since the post war rise in sisal prices, it became profi-
table to export wild sisal in 1936-37. Small quantities (14,812 kilos) were
shipped from Miragoane in that year.
It is on the sisal and banana industries that Haiti must chiefly rely for
diversification of its export trade. The sisal industry, judging from the
noteworthy gains made in the last few years, already is an assured success.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Bananas
Banana exports in 1936-37, both in quantity and in value, were more than
double the corresponding figures for the previous fiscal year.
In quantity, banana exports totalled 1,327,106 stems in 1936-37. This
compares with 595,715 stems in 1935-36, indicating an increase .of 731,391
stems, or 122.8 per cent.
In value, banana exports jumped from Gdes. 771,807 in 1935-36 to Gdes.
1,877, 583 in 1936-37, an increase of Gdes. 1,105,776, or 143.4 per cent.
These statistics are convincing evidence that the banana industry has
;come to Haiti to stay. They give renewed assurance that the industry in a
very few years will bring to an end the present one-sided dependence on
,coffee with its extreme effects on commerce and government revenues.
Chart No. 4 shows graphically the steady rise in banana exports this
year a rise which should continue until annual production reaches at
least ten million stems per year. Fulfillment of this goal will mean banana
exports valued at from fifteen to .twenty million gourdes per year. In com-
,,parison, the cotton crop in past years has averaged in value between seven
and eight million gourdes annually. Bananas already are fifth in importance
among Haitian export industries.
The chart also shows that progress in increasing production has not been
.steady. Exports in 1935-36 were disappointing. The fruit company in that
year experienced difficulty in raising the export volume. There were almost
no exports from the southern part of Haiti due to flood damage to banana
plantations in October, 1935, and to the domestic demand for bananas to
supplant other food crops damaged by floods. Then too, roads were damag-
ed by floods, making transportation of bananas to market often impossible.
No unexpected contingencies of this kind, except for several cases of
very localized wind-damage to plantations, interfered with banana market-
ing i' 1936-37. Moreover, the fruit company began a more intensive
campaign to augment banana production.
The disappointing results of the 1935-36 season led to some public crit-
icism of the company's efforts. The contract of concession requires exports
of 6,000,000 stems during the first three years of operation under the con-
tract. In the twelve months ending September 30, 1936, only 595,715 stems
'were shipped. In the previous eight months, beginning in March, 1935,
when the contract was sanctioned, only 307,707 stems were shipped. It
had become improbable, therefore, that banana exports in the first three
years would attain the required minimum.
These difficulties led to negotiations between the concessionaire and
the government which were concluded with an exchange of letters on
March 29, 1937.
Briefly, this agreement provided for an increase in price to $0.40 (from
$0.34 in the original contract) paid to planters for deliveries at buying





HAITI: REPORT OF FISCAL REPRESENTATIVE


counters during 4ihe March August season, and $0.35 (from $0.32) during
the balance of the year.
The price increase was described as being for the purpose of giving a
rapid impulse to banana production, and to exports, and to encourage
Haitian producers.
The company further agreed: 1) to increase the number of buying
.stations; 2) to increase the murmber of "monitors" ih banana-producing
regions; and 3) to recognize the right of third parties to buy and export
bananas which the company rejects.
It was further provided that the company would pay Gdes. 25,000 each
month to the government until banana exports reach 6,000,000 stems, in-
cluding those already shipped. These amounts were to be used for road
building and road maintenance.
Also, the company agreed to: 1) b.tgin banana cultivation on 1.000
acres of land in th'e Artihonite region, and on, 500 acres at Cayes; 2)
construct supplementary buying stations; 3) improve port facilities for
handling and shipment of bananas; 4) dig experimental wells at Jean
Rabel, Arcahaic and Cap Haitien; aind 5) make reimnburskble advances
to planters who comply with the provisions of Article 8 of the original
contract.
In return, the government agreed that the company need only buy the
"'Gros Miohel" variety of bananan, and that the company wotlrd be granted
five years, instead of three to attain the required minimum export volume
(6,000,000 stems) foreseen in the contract.
This agreement immediately had the desired effect. Exports, as shown
by the chart mounted rapidly. Monthly shipments exceeded 100,000 stems,
and reached a peak of 165,094 stems in July, 1937. Ships began calling
regularly at southern ports to pick up bananas. New buying stations were
built. The company's port facilities were improved. In short, the enter-
prise definitely began to assume the character of a large-scale industry
as originally intended by the parties at the time the original contract was
signed.
New plantations are being developed on an extensive scale both by the
fruit company and by private e'nterpri'ses. Among the ,private projects
are a 150 carreaux development near Saint Marc and 350 carreaux at
Maribaroux, near Fort Libert6. Company-operated plantations are being
extended in the Artibonite Valley, where the fruit company has installed
a second motor-driven pump of large capacity to draw water from the
Artibonite River for irrigation purposes.
In accordance with the agreement with the government referred to above,
the company has been making the required payments for road construc-
tion. Sums received thus far have been devoted chiefly to building roads
in the vicinity of Le Borgne (on the north coast), between Les Anglais





HAITI: REPORT OF FISCAL REPRESENTATIVE


and Chardoniires (near .Cayes), and between Chanibellain, Dame-Marie and
Anse d'Hainault (at the western end of the southern peninsula).
At Cayes, where prospects of large-scale banana growing, had not been
very favorable, experiments during the year confirmed the belief that some
years must pass before drainage operations will wash out the soda and salt
accumulations which interfere with proper growth of the plants.
Planters recently are reported to have complained of the large number
of stems rejected by the company. While rejects may seem excessive to
to the growers, the company presumably is anxious to buy all the bananas
it can sell. If bananas are rejected in Haiti, this simply means that the
CHART No. 4
QUANTITIES OF BANANAS EXPORTED, BY MONTHS
FISCAL YEARS 1931-32 TO 1936-37
THOUlANDS OF STEMS__




I I
1/0












/93- /932-33 1933-34 /934-35 /935- /936 -37

fruit offered is not of a saleable quality, a condition natural to fruit which
is not irrigated during the dry periods, or that it will not stand transpor-
tation abroad. Only by rejecting inferior fruit can the company demons-
trate to growers the quality which is marketable, and obtain the quality
needed by markets abroad. Moreover, by rejecting inferior fruit the
company necessarily prolongs the time during which it must pay Gdes.
25,CCO to the governrrent for road building tinder the new agreement.
Criticism with more justice can be directed against the company for
its failure to enter upon individual contracts with producers along the
lines contemplated In the original concession. No forms of type-contracts
have 'been published in Le Moniteur, as provided in A rticle 7; nrei'ther has
"inirnatricullation" of banana lands been published in Le Moniteur as pro-
vided in Article 8.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Advances have been made to growers, but the amount of such advances,
so far as is known, has not reached the proportions obviously hoped for,
by the general provisions of the contract.
In all fairness, however, it must be recognized that the banana industry
is new to Haiti. Many unforeseen difficulties have appeared. Chief of
these is the fact that it is difficult to buy, lease, or operate under contract
large tracts of land in Haiti. The subdivision of the land into thousands of
small properties, characteristic of Haitian agricultural land, is itself ati
obstacle to plantation development on a large scale. Obtaining title to land
is slow, cumbersome and expensive. Difficulties multiply when producers
seek to obtain large tracts such as are needed for efficient banana culti-
vation. Irrigation, drainage, and cultivation with machinery cannot ordi-
narily be conducted satisfactorily except on large tracts of land measur-
ing a thousand acres or more. Few unoccupied and suitable estates of that
extent exist. The difficulty of assembling such tracts is very great.
The hoped-for gain in production must, therefore, eventually be attained
through the small cultivator, rather than through large company-owned
plantation's. The small farmer in Haiti can produce acceptable fruit, and
at a profit to himself. What is more, he is doing it. As to the quantity
which can be so produced, we have the fact that Port-de-Paix in 1936-37
alone shipped 524,080 stems of bananas, most of them from typical Haitian
owned and operated farms, individually only a few acres in size. If the expe-
rience at Port-de-Paix is repeated in the dozens of other potential banana-
growing areas, i't is evi'd'ent that hoped-for development 'of an export
industry rivaling and even surpassing coffee eventually will be realized.

Other Exports
Exported commodities other than those already mentioned were valued
at Gdes. 2,968,299, or less than seven per cent of total exports. They con-
sisted principally of cacao (valued at Gdes. 1,031,347 in 1936-37); goat-
skins (Gdes. 782,222); logwood (Gdes. 645,180); and honey (Gdes,
143,700).
Oacao prices moved vigorously upward ,during the last crop year, adding
considerably to the value of exports in 1936-37 of this commodity,
Although in volume exports de;.lined to 1,436,280 kilos in 1936-37 from
1,641,124 kilos in 1935-36, values increased from Gdes. 567,026 in the
latter year to Gdes 1,001,347 in 1936-37. The gain amounted to Gdes.
434,321, or 76.7 per cent.
Cacao prices in world markets have since subsided, but the strength
exhibited during the past season should again encourage the production
on a larger scale of this once important Haitian export commodity.
Cacao prices reached their low point in 1932-33 when the average price
received for the crop was only Gde. 0.248 Iper kilo. Tlhe average price





HAITI: REPORT OF FISCAL REPRESENTATIVE


of Gde. 0.697 received for the 1936-37 crop represents slubstantidal recovery,
although prices are still far under the average of Gde. 0.868 received for
the 1929-30 crop.
In quantity, the crop of 1,436,280 kilos exported in 1936-37 was not
far below the usual quantity shipped in the years when high prices made
cacao a leading Haitian export. In the five years ending in 1930-31, for
example, annual exports averaged 1,765,943 kilos, and i'n ithe previous ten
years, exports averaged 1,933,755 kilos.
Haiti has never been a leading producer of cacao because of lack of care
in preparation. Climate and soil favor the Haitian product, but until quality
is improved through more attention to fermentation and grading, there
can be little hope for appreciable gains in price and volume.
Goatskins regained their pre-depression position among exports.
Goatskins valued at Gdes. 782,222 were shipped in 1936-37. This figure
is slightly higher than the average value of goatskin exports in the five
years ending in 1930-31, and higher than the average annual value of
Gdes. 743,940 recorded in the ten years ending in 1925-26.
Shipments of goatskins in 1936-37 increased in value by Gdes. 368,781,
or by 89.2 per cent from the total of Gdes. 413,541 recorded in 1935-36.
In quantity, goatskin exports showed a similar gain of 43,909 kilos, or
26.5 per cent. Average prices rose from Gde. 0.250 !per kilo in 1935-36
to Gde. 0.374 per kilo in 1936-37.
Logwood exports in 1936-37 increased in quantity by 3,459,773 kilos, or
by 28.3 per cent, when comparison is made with figures for the preceding
fiscal period. In value, a gain of Gdes. 168,659, or 35.4 per cent was record-
ed. Average prices for the year's exports rose from Gdes. 3.90 per 100 kilos
in 1935-36 to Gdes. 4.13 per 100 kilos in 1936-37.
These gains in a once important, and now still badly depressed, industry
are encouraging, but it appears very doubtful if the industry will ever
become as important as it once was. Synthetic dyes have supplanted to a
great extent the natural black dye distilled from logwood. Although the
natural dye is still reputed to be unexcelled, it is reasonable to suppose that
science sooner or later will succeed in equalling it with a cheaper synthetic
product.
Logwood exports in 1936-37 were about half the pre-depression average
in.quantity. In value, exports in 1936-37 represented only a quarter of the
sum received annually in the five years ending in 1930-31.
Honey exports in 1936-37 declined in quantity by 58,421 kilos, or by 12.2
per cent from 477,200 kilos exported in 1935-36. Exports in 1936-37 were
valued at Gdes. 143,760, down Gdes. 8,935, or 5.8 per cent from the previous
year's figure.
In an effort to assist this ailing industry, the government in March, 1937,
reduced the import duties on containers used for exporting honey. This
measure has had no visible effect on honey exports.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Rum exports are still of little importance on the export list. Shipments
declined in quantity from 6,276 liters in 1935-36 to 3,483 liters in 1936-37,
and in value from Gdes. 168,627 to Gdes. 85,394.
Beeswax exports increased in value from Gdes. 4,239 in 1935-36 to Gdes.
42,918 in 1936-37; and lignum vitae from Gdes. 9,185 to Gdes. 23,842. Grape-
fruit appeared on the export list for the first time in 1936-37, with shipments
valued at Gdes. 33,910. The fruit was sold chiefly to Belgium.

Commercial Conventions

A convention .signed on Deceniber 17, 1936, provided regulations for the
exchange of parcel post between the postal administrations of Haiti and
Jamaica. The convention fills a long-felt need, since previously there had
been no arrangement for the direct mailing of packages between the two
islands.
An exchange of notes between Haiti and Switzerland, signed at Port-au-
Prince on December 23, 1936, provided for the extension by each country
of unconditional and unlimited most favored nation treatment of imports.
This temporary agreement is similar in its provisions to the agreement
signed with Belgium in July, 1936.* The agreement with Switzerland is to
remain in effect until a definitive commercial treaty is signed, or until it is
denounced. The agreement may be denounced by either signatory on three
months' notice.
By an executive order dated February 15, 1937, Iceland was added to the
list of countries which receive the benefit of the Haitian minimum tariff.
Another executive order published on April 12, 1937, extended the benefit
of Jhe Haitian minimum tariff to those colonies, protectorates, mandated
territories, and other countries forming part of the British Empire which
had not previously been granted those privileges.
On April 19, 1937, a notice published by the Office of the Secretary of
State for Foreign Relations reported that by an exchange of letters dated
April 15, 1937, the temporary Haitian-Canadian commercial convention,
which had expired on that date, had been renewed for an additional period
to extend until ratification of a definitive treaty which the tvwo governments
then were expecting to sign. The expected definitive commercial treaty, up
to the present writing, has not been signed.
The signature of these various agreements marks definite progress during
1936-37 in the direction of strengthening Haiti's trade relations with
countries whose markets afford valuable outlets for Haitian exports. Aside
from these various agreements, however, there is nothing very lenou'raging'
to report in regard to improving trade relations with foreign market
countries. The barriers of economic nationalism are difficult to overcome.

*Annual Report of the Fiscal Representative, fiscl year 1935-36, page 51.






-HAITI: REPORT OF FISCAL REPRESENTATIVE


It is to be regretted that thus far nothing concrete has been accomplished
towards the resumption of mutually advantageous trade relations with
France. On the contrary, both the export and import trade with France
during the year, as already related, dropped to new low levels; and at the
end of the year it appeared that but little effective progress had been made
toward arriving at a common basis for the resumption of trade relations.
The former commercial convention, which had been denounced by France
in March, 1936, remained inoperative throughout the year.
The text of notes exchanged by the Haitian and French governments in
regard to trade relations published on April 29, 1937 encouraged hope that
the long established coffee commerce might not be destroyed entirely after
all. But in reality these notes had little effect on trade between the two
countries. It was agreed simply that France would permit the imortation
for consumption in that country of 3,000,000 kilos of Haitian coffee during
the four months beginning May 1, 1937. This provision did little more
than relieve to some extent the strain on French coffee importing
houses which had speculated on an early resumption of trade relations
between Haiti and France and which had accumulated stocks of Haitian
coffee. There was no corresponding increase in new exports of Haitian
coffee to France. During the same four months only 297,194 kilos of coffee
were shipped from Haiti to France.
Haiti, on the other hand, agreed to extend tb French merchandise begin-
ning May 1, 1937, the benefit of the Haitian minimum tariff. Imports of
Haitian merchandise into France, however, still do not receive favored
treatment reciprocally.
It should be observed that this last concession to France does not mean
that France receives from Haiti most-favored-natTon privileges. The ex-
tension of minimum tariff duties to French merchandise imported into Haiti
however does give French merchandise equal competitive advantages with
merchandise of other origin except in the case of those few articles on
which reduced nates of. duty are applicable as a result of special trade
arrangements with other countries. At the present time, the United States
is the only country which has entered upon such an agreement with Haiti,
although Great Britain, Germany, Belgium, Switzerland, Canada, Italy and
tlhe Netherlands enjoy most-favored-nation privileges through treaties or
agreements. The merchandise of these last-mentioned countries receives
not only the benefit of the minimum tariff, but also the special concessions
granted to the commodities listed in the reciprocal trade agreement with
the United States.
Since France during the year under review bought more from Haiti than
it sold to Haiti (although trade with France in both categories has dropped
off sharply), it is perhaps an acceptable contention that for so long as this
continues French merchandise properly may receive minimum tariff privi-
leges upon importation into Haiti. Unconditional most-favored-nation treat-





HAITI: REPORT OF FISCAL REPRESENTATIVE


meant, however, is a trade advantage not customarily accorded by one party
unless the same advantage is given by the other.
More than a year and a half has passed since denunciation of the Haitian-
French commercial convention. Failure to arrive at a mutually satisfactory
arrangement has been due in part to the practical difficulty of compensating
France for permission to market in. France a substantial part of the Haitian
coffee crop, in view of the necessarily limited consumption of French mer-
chandise in Haiti. French political and commercial policy aims at relieving
an unfavorable balance of trade. Haiti has sold normally much more
merchandise to France than it has bought from France. There is little hope
of bringing the two figures closer together except at the cost of reducing
exports of Haitian coffee to France.
Every effort had been made to increase Haitian purchases of French
commodities prior to the denunciation of the trade convention with France.
The former commercial convention of April 12, 1930, accorded substantial
reductions in import duties on French specialties. The rider to the con-
vention, signed in March, 1934, granted exclusive trade privileges to France
and still further reduced the duties, and removed all internal taxes, on lead-
ing French specialties such as wines and perfumes. Subsequently, the Hai-
tian government undertook, by agreement with France, to purchase a sub-
tantial portion of Haitian government supplies from France. At the same
time, coffee exporters in Haiti were requested to purchase most of their
requirements of empty coffee bags -from France. An effort was made to
increase the share of export commodities shipped on French vessels.
Purchases of French merchandise remained at about the same level,
despite these drastic concessions to France. The reason, of course, is that
Haiti is not an important market for the luxury articles and specialties in
the production of which France excels. Furthermore, high production costs
in France have allowed other countries to undersell in competitive markets.
Even if Haiti applied no duties or .taxes to French specialties, it is doubtful
that any great gain in imports from France would be recorded. Certainly,
even this sweeping concession, which would cost Haiti an appreciable
amount in revenues, would not provide a solution of the problem.
Aside from difficulties of a fundamental nature which have impeded the
successful conclusion of a new trade convention with France, the situation
was further cornplicdied toward the end of the year under review by the
precipitous decline in the exchange value of the French franc. While a
cheaper franc should give French merchandise a greater competitive ad-
vantage in foreign markets, the continued adverse trade balance reported
gives little hope that France may relax its drastic quota regulations. A
cheaper franc means that France will find it more difficult to buy imported
commodities such as Haitian coffee.
Meanwhile, France is buying increasing amounts of coffee grown in the
French colonies. Compared with 26,674 tons in 1935, it is estimated that






HAITI: REPORT OF FISCAL REPRESENTATIVE


French colonial possessions will produce 75,070 tons of coffee in 1940. This
means that instead of buying 160,000 tons of coffee from foreign suppliers,
as at present, France will be buying only 105,000 tons in 1940.
SThis anticipated increase in French purchases of colonial coffee naturally
must be compensated by decreased purchases from other coffee-producing
countries, of whi:h Haiti is one. Thus, we can expect that even if France
were to change completely its present commercial policy, it is not probable
that any very favorable coffee quota can be allocated to Haiti a few years
hence.
One hopeful sign in the struggle for commercial preferences and balanced
trade, is the fact-that some of the larger countries are evidencing a more
receptive attitude, toward the reciprocal lowering of tariff barriers and
other obstacles to foreign trade. This policy, accepted by the American
republics at Montevideo in 1933, heretofore had found- fewer friends in
Europe; but in September, 1937, the British Foreign Secretary clearly
indicated that the British government also was in sympathy with a con-
sistent policy in favor of the reduction of trade barriers. It was pointed out
that the British government had deliberately refrained from pressing the
system of colonial preference beyond a certain limited point.
Today we hear somewhat less of economic nationalism and more of
economic cooperation. Governments are realizing that security and progress
lie in promoting the free movement of international commerce; that barriers
to commerce must be graduaHly lowered if world trade is to be restored to
its former level.
It is the cumulative effect of these favorable changes in attitude among
nations which give hope that the Haitian export trade may be built up and
extended. It must be remembered that from the export sales come the
credits for purchases abroad.

Tariff Modifications
A number of modifications in both the import and export tariffs were
put into effect during the fiscal year 1936-37. For the most part, the modi-
fications were revenue measures, designed to replace. revenues lost because
of the unexpectedly small coffee crop.
By a'decree-law published on November 30, 1936, the import duty on cut
or granulated tobacco for industrial use was raised from Gdes. 6.00 per net
kilo to Gdes. 8.00 per net kilo. The duty on cut or granulated tobacco
packed for .direct sale to the consumer was left at Gdes. 6.00 per net kilo.
This measure was taken in conjunction with the upward revision of the
internal revenue taxes on cigarettes, discussed elsewhere. It was designed
primarily to obtain additional revenues.
The same decree-law doubled the import duty on common salt. This was
a protective measure, designed to relieve the domestic salt industry from






HAITI: REPORT OF FISCAL REPRESENTATIVE


the competition of cheap salt produced in the neighboring islands. At the
same time, as an aid to agriculture, the duties formerly applied to barbed
wire, and to chemical and natural fertilizers, were removed.
Satisfactory fences cannot be made cheaply from materials available in
Haiti. The former high duty made barbed wire expensive. With the new
exeniption, it should be possible for farmers to make more extensive use of
wire fences to enclose their properties. Gheaper fertilizers also will help
agriculture.
Minor tariff modifications in the same law changed the wording of the
paragraph relating to imports of glazed cardboard, bristol board, etc.,
and' revised the paragraph applicable to personal baggage of returning
residents by restricting the exemption privilege on imports of silk or arti-
cial silk to a maximum of 25 meters. This measure was taken to correct
abuse of the franchise privilege on personal baggage.
By a decree-law pdblislhed on December 28, 1936, the import duty on
gasoline was raised from Gde. 0.60 per gallon to Gde. 0.65 per gallon. At
the.same time, an internal revenue tax of Gde. 0.05 per gallon (the amount
of the increase in duty) was applied to gasoline then in stock. This measure
was taken exclusively to obtain new revenues for public works.
Another revenue measure consisted of an increase of the surtax on import
duties to 10 per cent from 5 per cent. This increase became effective on
March 14, 1937.
By a law dated April 16, 1937, the former prohibitive duty on imports of
raw unginned cotton was removed altogether in the case of cotton imported
from the Dominican Republic. The exemption is to remain in effect only
until September 30, 1938, unless renewed.
Small quantities of cotton are grown in the neighboring republic in the
region near the frontier. This cotton can be marketed more profitably in
Haiti than in the Dominican Republic. Removal of the import duty on
ungimned cotton was not an important measure considered in terms of
money but to. the few merchants affected it was helpful measure.
By a decree-law published on May 24, 1937, the import duty on empty
barrels and similar wooden containers was reduced from Gde. 0.25 per
gross kilo to Gde. 0.10 per gross kilo. The purpose was to assist' the honey
export trade.. Exporters had complained that the high cost of containers
made it unprofitable to ship honey abroad. It was pointed out that the rate
of Gde. 0.25 per gross kilo was out of proportion to the tariff rates applied
to containers used in the other export trades. By lowering the import duty
on empty barrels, the honey trade has been materially aided.
A law published February 18, 1937, gave authority to the President of
the Republic to extend by executive orkler the privilege of exemption from
import duties in the case of tourist propaganda, such as publications and
advertising posters, imported from countries which extend the same privi-
lege to Haiti. Following publication of this law, the President of the Re-






HAITI! REPORT OF FISCAL REPRESENTATIVE


public, by executive order published April 26, 1937, decreed that publi-
cations and posters relating to the International Exposition of Arts and
Techniques, held at Paris during 1937, were to be admitted free of import
duty.
Other tariff modifications put into effect during the year were designed
to assist the export trade. By an executive order published January 7, 1937,
the former measure suspending the collection of export duties on logwood
Sand logwood roots was extended for an additional year.
By an executive order published July 22, 1937, the export duties and
surtax applicable to scrap metals of all kinds were removed. Rearmament
programs abroad, .and general improvement in: industry abroad, had
brought about a lively demand for scrap metals. Prices had reached a point
where it was believed that scrap metals could be profitably shipped from
Haiti if the export duties were removed.
An executive order published July 29, 1937, removed the export duties
(except for the normal weighing charge and wharfage fee) from exports
of fuel oil known as "Bunker C". Large stocks of this oil had been found
unsuited to any industrial use in Haiti. Re-exportation was impracticable
because of the export duty. Removal of the duty made it possible to
liquidate stocks and replace "Bunker C" oil with new importations of fuel
oil of the qualities needed, a procedure from which boUh the Treasury and
importers profited.


Customs Administration

Activity in the,administration of the customs laws and regulations during
the fiscal year under report was directed particularly toward the repression
of what, for a time, appeared to be a growing tendency on the part of
lawless individuals to engage in contraband operations.
It is believed that efforts to control smuggling have met with success.
The record for the year shows an unusually large number of arrests and
convictions for defra'uding,the custom's. In connection with one large-scale,
systematic, attempt to evade export duties on coffee the offenders have been
tried in court, convicted, and sentenced to heavy fines and imprisonment.
A considerable number of minor offenders also were brought to justice.
SSoon after harvest of the 1936-37 coffee crop was under way, it was
reported that coffee was filtering across the Haitian-Dominican frontier at
various points, particularly in the North. Coffee buyers in Haiti were slow
in making offers for the new crop because of the uncertainties arising from
the loss of the French market. As a result, prices in Haiti were especially
low in relation to prices offered in the Dominican, Republic. This develop-
ment provided smugglers with a new incentive to attempt illegal exporta-
tion of coffee across the frontier.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Immediate and fairly successful measures were taken to prevent the
movement of coffee across the frontier. A law dated September .12, 1936,
made it illegal, witJhout special authority, to move coffee from cities and
towns toward points on the frontier such as Ouanaminthe, Belladere and
Glore. As penalty for infractions, the law provided fines of from Gdes.
1,000 to Gdes. 3,000, and imprisonment from three to six months.
This measure quickly put an end to open attempts to transport coffee by
automobile trucks in large quantities to the vicinity of the frontier to be
subsequently smuggled across the border on pack animals.
This office, in collaboration with the Garde d'Haiti and competent depart-
ments of the governnrent devised and carried out a campaign for the
suppression of frontier smuggling.
As its part of the program, the Garde d'Haiti assigned a company to
patrol the frontier from the Bay of Mancenilla to Lamielle, a distance of
about 60 kilometers. Additional frontier guards were stationed near the
mouth of the Massacre River, and at Cerca la Source. In the South, a new
advance post was established at TEte A 1'Eau, in the Sub-District of Banane.
In addition, funds were provided for the construlqion of a Coast Guard
motor boat for use in patrolling the coast in the vicinity of Fort LibertY.
In September, 1937, arrangements had been completed for the establish-
ment of a new frontier custom house at Fond Parisien. This post will aid
in the control of contraband in the region south of Lake SiaumAtre where
the frontier has been made more accessible through construction of the
Fond Parisien-Saltrou road.
The customs legislation provides for the payment of rewards to persons
giving information leading to the seizure of contraband. The reward
consists of half of the net proceeds of the sale of confiscated goods.
.A special effort wars made to acquaint persons living in the vicinity of
the frontier with this provision of the law. Numerous seizures were made
during the last year as a result of information furnished customs agents
and members of the Garde d'Haiti.
Rewvards paid to informers: could easily be made more effective in
suppressing contraband if a measure proposed by this office in September,
1936, were to receive the approval of the government. At that time it was
proposed that special revolving funds be established at the frontier custom
houses from'which rewards to informers could be paid as soon as contra-
Land is seized. At present, rewards are paid only after the contraband has
been transported to Port-au-Prince or Cap Haitien and is sold. Contraband
cannot be sold near the place where it is seized, since to do so might lead
to new attempts to smuggle it across the frontier. The result is that
informers sometimes must wait for a considerable time before the reward
legally due them is paid.
If the law providing for payments of rewards is to be fully effective,
the government should give its approval to some means of makingpayments






HAITI: REPORT OF FISCAL REPRESENTATIVE


to informers without delay. Often the amounts involved are small. Infor-
irers are easily discouraged when they know they must sometimes wait
weeks or even months before they receive the rewards to which they are
entitled.
SA law promulgated on November 23, 1936, strengthened the previous
contraband legislation by providing specifically that attempts to transport
lutiable articles across the land frontier without passing through the fron-
tier custom houses was punishable by fine and imprisonment, as well as by
confiscation of the contraband articles. At the same time, a more expedi-
tious procedure was established for the prompt prosecution of smugglers.
The Police Court was given jurisdiction in cases involving comparatively
small amounts of contiraband, and in other ways the prosecution of offen-
ders was expedited.
A Circular Letter of The Department of Justice,'published in the Moni-
teur of December 21, 1936, charged the government prosecuting attroneys
with the duty of giving their special attention to exercising the right of
appeal when judgments respecting smuggling do not appear to be satis-
factory.
Another effective measure taken by the Department of Justice put an
end to the practice of granting provisional liberty, without bail, to of-
fenders who had been arrested for contraband.
These and other measures were taken during the year in the campaign
to suppress smuggling. Full publicity to the campaign was given as part
of the program. The services of all government agents in the vicinity of
the frontier were enlisted in the publicity campaign. These included the
agricultural agents, internal revenue inspectors, public works engineers,
and members of the National Public Health Service. Even members of the
clergy and school teachers were asked to give wide-spread publicity to the
campaign, to give warnings' of the penalties imposed for contraband, and
to make known the fact that the government intended to impose against
smugglers the full penalties provided by law.
Arrests for smuggling reported by. the Garde d'Haiti increased to 566
in 1936-37 from 474 in 1935-36 and 344 in 1934-35. The increase does not
indicate that smuggling, is becoming more extensive. In large part, the
arrests involved minor offenders attempting to smuggle coffee across the
land -frontier, or attempting to bring tobacco, livestock or food products
into Haiti. Occasionally, however, smugglers have attempted to engage
in operations on a larger scale. Agents of the Customs Service have
intercepted silk goods being transported on pack animals across the land
frontier; and not infrequently steamship passengers attempt to bring du-
tiable merchandise into Haiti in their baggage without payment of duties.
Arrests of persons engaged in this type of contraband have been frequent.
Silk goods are a favorite article in this illegal commerce. In order to
strengthen the contraband legislation, and its application in such cases,






HAITI: REPORT OF FISCAL REPRESENTATIVE'


this office recommended the enactment, in November, 1936, of a special
modification of the paragraph in the import tariff relating to the baggage of
returning residents. Under this new provision, returning residents may
import free of duty not more than 25 meters of silk or artificial silk goods.
This provision facilitates the work of the customs inspectors, and effec-
tively prevents returning residents from claiming exemption on silk mer-
chandise under the "personal baggage" exemption when the articles im-
ported obviously are intended for re-sale. Difficulty in the past had been
experienced in prosecuting such cases successfully in the courts.
Past experience showed that failure to secure conviction of smugglers
often was due to the fact that official 'reports were inadequately prepared
by cusito4 s agents who secured the arrest of suspects. To remedy this
situation, all customs directors and inspectors in July, 1936, had been
provided with blank forms to aid them in the drafting of official reports.
It was observed that customs agents still failed to obain proper written
testimony in contraband cases. Accordingly, a circular letter was issued
on November 19, 1936, enlarging upon the original instructions. As a re-
sult, better reports are now being obtained.
The arrest of smugglers is not enough to stamp out contraband. The
persons arrested must be tried and, if guilty, convicted' in court. But the
courts quite properly will not convict smugglers if the evidence submitted
by law-enforcing agents is inadequate or is improperly presented.
By a Circular Letter issued on December 9, 1936, the special attention
of customs officials was directed to the Laws of August 22, 1936, and
November 17, 1936, regarding contraband. These laws, to which reference
already has been made, facilitate the conviction of persons accused of
contraband, and promote the correction or reversing of judgments where
the interests of the State have not been properly defended. This circular
also pointed out the need for properly prepared evidence foruse ix,,prose-
cuting smugglers.
Rumors of customs irregularities at Goniaives in December, 1936, led to
a special investigation at that port, where it was found that over a period
of months a leading merchant and exporter of that city had systematically
evaded payment of coffee export duties on part of the coffee' expbrted by
him. The method used involved falsifying shipping documents and collu-
sion with the Diroetor of Customs at Gonaives. An employee' of the expor-
ter was also implicated.
The report submitted by agents of the Cu'stoms Service sent to inves-
tigate the case gave indisputable evidence of fraud, as well as corruption
of a public official. Since further, prosecution of the case did not lie within
the competency of the customs administration, the evidence gathered was
turned over to the Department of Justice, and charges were filed which
led to the trial and conviction of the three offenders.






HAITI:. REPORT. OF FISCAL REPRESENTATIVE


Each of the three persons implicated was sentenced to imprisonment
for three years.
The Director of Customs implicated in the fraud was suspended from his
functions upon the filingof charges by this office. Since these charges
were not subsequently disproved, and on the contrary, he was convicted
by due process of law, he was discharged from the Service.
Iuren.diately following disclosure of the fraud, this office took energetic
steps to make impossible any repetition. Vigilance in inspecting customs
operations at each port was increased. A circular letter issued on February
1, 1937, required Directors of Customs to submit to Head Office, in addition
to the previous data, reports giving monthly compilations of coffee exports
by types and by individual export houses. These reports, used in conjunc-
tilan with outturn reports required from shipping-agentis, give a more
effective rreans of detecting irregularities in the collection of export duties
on coffee.
The frontier however is a very special problem, different from the coas-
tal cities and towns. In many places there are good roads and markets in
the Dominican Republic close to the frontier and no corresponding roads
or marketss in Haiti. It is not extraordinary then that the small peasant
faitrer sees no harmn and in fact thinks it unreasonable that the Govern-
ment should impose a customs barrier to his small affairs. Yet when these
farmers are ,counted in their thousands the result especially in coffee ex-
ports is a considerable loss.
The remedy appears to be in extending Haitian roads and .the establish-
nrent of Haitian speculators in the frontier district. The speculators (buyers
of farm products for resale) are now restricted to certain large towns. It is
thought they should be allowed under control to establish themselves in
country markets at strategic places along t'he frontier.


Internal Revenue Inspection Service

The Internal Revenue Inspection Service, operating as a division of the
Office of the Fisca'l Representative under ethe Agreement of August 7,
1933. continued throughout the fiscal year 1936-37 under the administrative
plan in operation since its inception. There were no important changes in
personnel, in the organization of the service, or in its methods. Routine
inspections were carried out as usual.
The activities of the Inspection Service are set forth in detail in the
report of the Inspector General annexed to this report.
It should be observed that the Inspection Service has nothing to do with
the actual collection of internal revenues. Its functions are simply to ins-
peat the activities of that Service and make appropriate recommendations
for its'proper operation. Since the Internal Revenue Service is a large






HAITI: REPORT OF FISCAL RE'RESENTATIVB


organization with offices and agents located in all parts of the country, it
is essentially that there be an independent and impartial service for the ins-
pection of the collecting function. It is the Inspection Servite which
fulfills this function, making reports of irregularities and submitting re-
corranendations for the proper operation of the Service.


Government Revenues

Total Revenues

Government revenues from all sources totalled Gdes. 34,448,671.19 dur-
ing the fiscal year 1936-37. The corresponding figure for the preceding
fiscal period was Gdes. 34,598,364.33: -Receipts therefore declined during
the year under report by Gdes. 149,693.14, or by 0.43 per cent.
The estimate of ways and means at the beginning of the year predicted
revenues of Gdes. 33,240,000. Subsequent 'revisions, reflecting modifications
in revenue legislation, carried the estimate total to Gdas. 34,087,000. Actual
revenues collected, therefore, exceeded estimated revenues by Gdes.
361,671.19.
During the eight years beginning in 1929,,annual revenues have averaged
Gdes. 34,000,000. Results for 1936-37 reveal a small rise above the aver-
age. A striking feature of the revenue curve, as shown by Chart No. 4,
is that during these eight years of depression and slow recovery revenues
have flnctuated wttlin surprisingly narrow limits. Except in the mid-
depression year (1931-32), annual receipts did not drop below Gdes.
30,000,000. The high points were Gdes. 38,648,163.39 in 1929-30, before
the full force of the depression was felt, and Gdes. 37,305,298.67 in 1932-33
When a record coffee crop was harvested. New revenue legislation enacted
during the years when poor cops or fa:liing cbtomodity prices otherwise
would have severely affected collections have enabled the government to
sustain its income at a fairly even level. A steady average income in turn
has eased the problem of maintaining government expenditures within
proper limits..
Average revenues of Gdes 34,0C0,000 have been adequate to meet all
ordinary government expenditures, including full service of the public
debt, and at the same time leave surplus revenues, to'be appropriated from
time to tin-re as they became available, to meet unforeseen contingencies or
to carry out permanent improvements. In this last respect, the record of
thepast eight years in the building of new roads, bridges, public buildings
and similar public works has been truly remarkable, even though so many
needed improvements remain to be accomplished.






HAITI: REPORT OF FISCAL REPRESENTATIVE


.*While annual receipts of Gdes. 34,000,000 have been adequate in the past,
a somewhat lower figure properly represents future budgetary needs, since
the retirement of the internal bond issue has released more than Gdes.
1,800,000 each year for other purposes.
The chart shows that the spread between revenues and expenditures
has been relatively narrow throughout the depression. During three years
of declining revenues, ending in 1931-32, expenditures declined in nearly
the surre proportion. The annual deficits were covered entirely from trea-
sury ,jc(rves. There followed a year when a surplus was recorded and
treasury reserves were partially reestablished, and another year when reve-
nues. and expenditures were practically equal. Them, in 1934-35, with the

CHART No. 5
TOTAL REVENUE RECEIPTS OF HAITI AND EXPENDITURES FROM REVENUES
FISCAL YEARS 1916-17 TO 1936-37
MILLIONS OF GOU/RDES

REVENUE .S


KLXPEND/TURPES


_A








-f7 r/iB /g81 9-ZO0-2I2ia1"- Z 3 3 -Z25"2ZS 26 W2rS79 Z"8 5 U5L 3-30W131-32 X-a&3 WJ35 "X.-17
-U -s s DEFICIT *

purchase of the Banque Nationale de la R6publique d'Haiti for Gdes.'
5,CCO,CCO, government disbursenehts increased in a year when revenues
declined. A large part of the spread between revenues and' expenditures,
however, represented the purchase price of the bank, which in effect was
an investment in a profitable institution, paid from treasury reserves.
Properly speaking the disbursement was not an operating expense of the
government, although for accounting puposes the item is included among
total government expenditures.
In the last two fiscal years, expenditures have exceeded revenues by a
small margin, and treasury reserves have been entirely adequate to cover
the deficit.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Government revenues in 1936-37, classified by principal sources were as
follows:
Sources Gourdes Per cent
Customs:
Imports .................................................... 20,659,893.06 60.0
Exports .................................................... 8,020,007.37 23.3
Miscellaneous Customs .............................. 62,972.39 0.2
Internal Revenues ............................................ 4,964,672.98 14.4
Miscellaneous government receipts .................. 463,619.25 1.3
Receipts from Communes .................................... 277,506.14 0.8
Total revenue, 1936-37............................ 34,448,671.19 100.0

Compared with the previous year, revenues derived, from the import
tariff increased frcm 50.5 per cent of total revenues to sixty per cent, as
indicated above. The export tariff on the other hand, produced only 23.3
per cent of total revenues in 1936-37, as against 32.7 per cent in 1935-36.
The increased surtax on in'(port duties and the addition of five centimes
per gallon to the import ,duty on gasoline accounted largely for the greater
irn-ortance of im-port revenues. Also, the inmpbrt trade showed greater
activity in 1936-37. Cn the side of export revenues, the poor coffee crop
alore acttocvted for the decline in revenues derived from the duties on
comirodities exported.

Customs Receipts
Revenues listed as "customs receipts" consist of collections of duties
on imports, duties on exports, and miscellaneous customs revenues such
as storage charges, navigation fees, sales of contraband and fines.
Comparing total collections in 1936-37 with those of the preceding year,
we find very little variation in the figures. Total customs receipts in
1936-37 amounted to Gdes. 28,742,872.82,a decline of Gdes. 200,492.73 from
the sum of Gdes. 28,943,365.55 collected in 1935-36. The decline amounted
to only 0.69 per cent.
There was a considerable change, however, in the source of customs
revenues. Whereas revenues derived from imports increased by Gdes.
3,188,914.45, or 18.26 per cent from the sum of Gdes. 17,470,978.61 collected
from this source in 1935-36, the export duties yielded in 1936-37 the sum
of Gdes. 8,020,007.37, or Gdes. 3,307,781.34 less than in the previous year,
Miscellaneous customs revenues in 1936-37 totalled Gdes. 62,972.39, or
81,625.84 less than in 1935-36.
The chief reason for the greater yield of the import duties in 1936-37 was,
of course, the marked gain in imports. A secondary reason was the increase'
during the year of certain import duties, particularly that on gasoline, and
the revision upward (to 10 per cent, from 5 per cent) of the surtax applied
to customs duties. The surtax became effective on March 14, 1937, and
was therefore applied during more than half of the fiscal year.







HAITI: REPORT OF FISCAL REPRESENTATIVE


Export revenues, on the other hand, were affected directly by the small
size of the coffee crop (the chief source of export revenues), and receipts
from the export duties declined accordingly.
Receipts of import duties were 71.88 per cent of total customs receipts
in 1936-37, as against 60.36 per ceht in 1935-36; but receipts of export
duties were only 27.90 per cent of customs revenues in 1936-37, against
39.14 per cent in 1935-36.
Nearly half (49.5 per cent) of total revenues derived from the import
duties in 1936-37 was obtained from only two classes of imported com-
modities. These were cotton goods and flour. A comparison of leading
sources of import revenues in each of the last two fiscal years is given in
the table below:


Cotti
Flou
Gaso
Othe
Iron
Cher
Ciga
Woo
Soap
Ceme
Leat]
Pape
Rubb
Eartl
Auto
Glass
All o


Gd(s. '(000's)
on goods .............................. ... ........ ....... 7,362
r .................................................................... 2,848
aline and kerosene............................................ 2,080
r foodstuffs and beverages............................. 2,078
and steel products, machinery and apparatus 1,075.
nical and pharmaceutical products............... 954
rettes and tobacco........................................ 810
1, linen, silk goods, jute bags, etc.................... 769
.................................................................... 737
ent, lumber, etc.............................................. 424
her, shoes and leather goods......................... 317
r, etc. ............................................................ 222
er goods ................................................ ... 207
henware, etc. .............................................. 187
s and trucks .............................................. 169
sware ........................................ ............. 83
others ............................................................. 338

Total ........................................................... 20,660


Gdes. (O000s)
5,382
3,128
1,304
2,070
903
835
669
686
628
331
441
232
218
167
171
112
194

17,471


The chief gains were registered in the cotton goods, gasoline, tobacco
and pharmaceutical products classifications. Increased imports and the
upward revision of the import surtax accounted for the gains recorded in
the first three of these groups. In the pharmaceutical products group,
revenues increased despite a decline in value of imports. This was due in
part to the fact that French pharmaceutical specialities had been favored
during half of the previous year by the tariff privileges accorded under
the former commercial convention.
Smaller gains were recorded in all other groups with the exception of
leather goods, paper, rubber goods, motor vehicles and glassware. These
commodities were not favored in 1936-37 by greater volume of imports.
Revenues derived from the export duties, of which the duty on coffee
alone constituted 94 per cent, totalled Gdes. 8,020,007.37 in 1936-37. The
latter figure was Gdes. 3,307,781.34 under the sum of Gdes. 11,327,788.71
collected from this source in 1935-36, indicating a decline of 29.20 per cent.
Because the export duties are specific levies on exported commodities,
particularly coffee, the annual revenue yield tends to fluctuate more than
any other major source of revenue. If we examine a period extending







,,g HAITI: REPORT OF FISCAL REPRESENTATIVE

back, ten years, we find that the maximum yield of the export duties was
registered in 1932-33, when a record coffee crop accounted chiefly for
export revenues totalling Gdes. 13,226,893.15. In 1934-35, a phenomenally
small crop in turn produced only Gdes. 6,387,351.37 from this source.
Between these extremes we have the 1936-37 yield of slightly more than
eight million gourdes.
Export revenues by sources were as follows in 1936-37 and in 1935-36:
1936-37 1935-36
Gourdes Gourdes
Coffee ........................................... 7,550,641 10,935,486
Cotton .............................................. 114,935 122,723
Sisal .............................................. 88,617 81,019
Bananas .......................................... 91,651 40,827
Miscellaneous ................................. 174,161 147,734
Total ...................................... 8,020,005 11,327,789
Internal Revenue Receipts
Internal revenue receipts in 1936-37, for the second successive year,
surpassed those of the preceding fiscal period.
Unfortunately, no increase in tax receipts due to improving business
conditions can be discerned from examination of the figures for 1936-37.
As in the prior years, the gain in 1936-37 for the most part was due to
new taxes, or to increases in the old tax rates.
Total internal revenue receipts amounted to Gdes. 4,964,672.98 in 1936-37,
Gdes. 4,695,426.40 in 1935-36 and Gdes. 4,519,504.32 in 1934-35. The gain
from the 1935-36 figure amounted to Gdes. 269,246.58, or 5.74 per cent.
A similar gain of 3.89 per cent had been recorded the previous year.
About a third of internal revenue receipts ordinarily is derived from the
excise on alcohol (including liquors, wines etc.), on tobacco products, and
on vegetable oil, lard substitutes and soap. Salt is also subject to the
excise.
The relation between excise receipts and "other" internal revenues,
during the past five yeais is shown in the table below:
Fiscal Years Excise Other Internal Total
Gourdie Gourdes Gourdes
1932-33...................... 1,844,434.20 3,146.887.96 4,991,322.16
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
1936-37....................... 1,618,896.89 3,345,776.09 4,964,672.98

Receipts under the "other internal" heading comprise twenty-five differ-
ent categories, including, in 1936-37, receipts from the new tax which
foreigners residing in Haiti are now required to pay. Receipts from this
new source in 1936-37 amounted to Gdes. 11,154.00. The tax, amounting
to. Gdes. 10.00 per person per year is unimportant as a revenue-producer.*

*The tax does not apply to members of the diplomatic and consular corps, the clety, foreigners worki'S
under contract for the Haitian government, and tourists or temporary residents. Collection, of thi tax in 196-
indicate that there were not more than 1,115 foreigners residing in Haiti in that year, exclusive of the group
mentioned.







HAITI: REPORT OF FISCAL REPRESENTATIVE


In the excise group the net increase of Gdes. 205,324.33 was due almost
exclusively to the new increased taxes on cigarettes which became effective
in December, 1936. The cigarette taxes produced Gdes. 556,037.00 in re-
venues in 1936-37, as against Gdes. 350,477.40 in 1935-36, a gain of Gdes.
205,559.60. This gain is, of course, exclusive of greater customs revenues
obtained from the increase, from six gourdes to eight gourdes per net
kilo, on imported cut tobacco used extensively in Haiti for manufacturing
cigarettes. This increase in duty was put into effect concurrently with the
new internal revenue taxes on cigarettes.
Grouping together the less important sources of internal revenue, col-
lections during the past two fiscal years were as follows:
1935-36 1936-37 Increase
Gourdes Gourdes Gourdes
Excise:
Alcohol, wines, etc....................... 367,174.56 392,643.78 25,469.22
Tobacco ...................................... 390,257.82 600,071.38 209,813.56
Other excise ................................ 656,140.18 626,181.73 29,958.45*
Postal Service receipts (sale of stamps,
etc.) ...................... .................... 226,203.14 233,917.59 7,714.45
Revenue Stamp receipts........................ 586,369.65 585,015.98 1,353.67*
Telegraph and telephone...................... 500,998.17 499,521.41 1,476.76*
Income tax ...... ....................... 464,747.48 461,739.83 3,007.65*
Occupational tax on foreigners............ 347,564.57 318,047.91 29,516.66*
State land rentals................................. 332,881.27 344,830.97 11,949.70
Documentary recording fees................ 316,118.69 320,105.51 3,986.82
Water service collections......................... 262,559.05 285,090.75 22,531.70
Consular fees.......... .. .. ........... ... 71,627.35 77,672.85 6,045.50
Vital statistics fees........................... 64,353.25 59,610.07 4,743.18*
Other internal ...................................... 108,431.22 160,223.22 51,792.00
4,695,426.40 4,964,672.98 269,246.58

Receipts in the "other excise" group include the yield of taxes on soap,
gasoline, vegetable oil. lard subs.it'utes and salt. The yield from all of
these sources increased in 1936-37 with the exception of taxes collected on
gasoline and soap.
The gasoline tax consisted simply of the tax on existing stocks of
gasoline which was put into effect in December, 1936, at the time the
increased customs duty (Gdes. 0.65 per gallon instead of the former duty
of Gde. 0.60 per gallon) was made effective. A similar measure the previous
year yielded Gdes. 95,777.59, as against Gdes. 25,530.66 in 1936-37.
The yield of the excise on soap declined from Gdes. 63,484.23 in 1935-36
to Gdes. 40,733.57 in 1936-37.
The somewhat greater income (Gdes. 25,469.22) derived from the al-
cohol taxes in 1936-37 was due to the fact that imports of French wines
and liquors, since denunciation of the commercial convention with France,
have been subject to the regular internal revenue taxes. Vinous beverages
yielded Gdes. 49,881.58 in 1936-37 in internal revenues, compared with
a similar yield of only Gdes. 4,467.41 in 1935-36.

*Decrease.






HAITI4 REPORT OF FISCAL REPRESENTATIVE


' It should be noted that imports of French wines during 1935-36, subse-
quent to breaking off of the convention under Which French wines and other
French specialties had enjoyed special privileges, were almost negligible
imamount. It was not until the latter part of 1936-37 that importers began
again to stock up with French wines. Hence receipts from the wine tax,
which,'had almost disappeared, in 1935-36, became of some importance
in 1936-37.
,'Excise receipts grouped together under ''Tobacco" above, include, in
addition to the cigarette taxes, the excise on cigars and on prepared to-
bacco. Cigar taxes yielded Gdes. 9,021.20 in 1936-37, compared with Gdes.
7,571.42 in 1935-36. Similarly, the yield of the excise on prepared tobacco
increased to Gdes. 35,013.18 in 1936-37 from Gdes. 32,209.00 in 1935-36.
The tax on preps.red, or manufactured, tobacco, reached its maximum
yield in 1929-30, when the sum of Gdes. 672,441.56 was collected from this
source. The present yield, of only a little more than five per cent of the
latter amount, gives a striking illustration of how this once important
source of government revenues has been practically abandoned.
There is no good reason why taxes on domestic prepared tobacco should
not again become an important source of revenue. It must be recognized.
however, that in recent years consumers' habits have changed remarkably,
due to the freedom with which raw leaf tobacco hais been permitted to circu-
late. Instead of the easily-taxable manufactured tobacco, consumers now use
extensively raw leaf tobacco on which it would be almost an impossibility
to collect a tax. It cannot be denied that difficulties would be encountered
in securing a return to former buying habits as this would imply a return
by the public to prepared tobacco. A taste once established is difficult to
change. Nevertheless, it is the belief of this office that suitable legislation
can be drafted, and that with proper enforcement tobacco should again
become an important source of revenue.
Tobacco is a luxury and not a necessity; yet it is extensively used, even
in countries, like Haiti, where per capital wealth is low. Because of the
large quantities consumed, a small tax will give a high yield, provided
the tax is enforced. Other countries, without exception, recognize the utility
of obtaining revenues from the tobacco trade, and in most countries it is
.a leading source of government income. In Haiti today it is negligible.
To be sure, cigarettes and cigarette tobacco in Haiti already are good
revenue producers. But tobacco in these forms is not the variety used by
the mass of the population. If tobacco is to give its proper revenue yield,
the incidence should 'be spread as widely and a; evenly as possible. This
means that tobacco in the form in which it is most commonly used must
be taxed-and the tax must be enforced. The machinery for enforcement
already is in existence. The Internal Revenue Service already has acquired
experience in collecting tobacco revenues. If the government will give
proper consideration to the subject, it should be possible eventually to add






HAITI: REPORT OF FISCAL REPRESENTATIVE 71\

several hundred thousand gourdes per year to the government income. -'
Alcohol is an even more productive source of revenue. More than-
Gdes. 1,400,000 in revenues were obtained in 1929-30 from the taxes on
domestic alcohol. In 1936-37, under the revised taxes, and with indifferent
tax enforcement, the same source yielded only Gdes. 321,659.77 in revenues.
Legislation applying the excise to alcohol, should again be revised. The
basis of the tax should be the quantity .produced and not the Lmipacity to'
ploduce. Experience has shown that a tax based on distilli'ng capacity is
difficult to enforce, encourages tax evasion--and produces little revenue.
The new banana industry gives the government an excellent opportunity
to force a needed change in the domestic alcohol industry. The hundreds,
of small cane plantations which supply the raw material for the manu-
facture of domestic alcohol doubtless in many cases can be used eventually
to better advantage .for growing bananas. Instead of 'hundreds of small
distilleries, operating intermittently and inefficiently, none of which make
a reasonable return, there would be thriving plantations growing bananas
for export. Domestic consumption of alcohol easily could 'be supplied by a
dozen large distilleries with up-to-date equipment. These few distilleries,
with greater output and larger domestic sales at the same time would be'
better equipped to compete in the foreign market for rum. Growth of
an export trade in rum has been found to be to all intents and purposes an
impossibility because of lack of capital and lack of production capacity.
New capital will not go into an industry hamstrung by such conditions as
exist in the Haitian distilling industry. A stronger domestic industry would,
automatically aid the export industry, and both directly and indirectly
benefit the country.
A firm policy, consistently adhered to, should quickly result in the es-
tablishment of a modern alcohol industry. The ailing alcohol industry
Should be revived. Government revenues would be increased.
S It would be a grave mistake for the government to delay longer in
correcting the present alcohol and.tobacco legislation.. There has been'
sufficient experimentation already to convince any one. .
Internal revenues froni sources other than those already discussed,
showed little movement during 1936-37 when comparison is made with the
corresponding figures for 1935-36. Greater efforts made in. the collection,
o6 water service fees and state land rentals produced slightly higher re-
venues from these sources in 1936-37. Collections of license fees dropped
by Gdes. 29,516.66 in 1936-37, due to the withdrawal of a number of foreign
firms from the retail trade. The more important sources of internal re-
venues "other than excise" remained nearly stationary. These categorlcs
include .postal service receipts, revenue stamp sales, telephone and telegraph
collections, income tax receipts and registry fees.
In the miscellaneous groip' indicated in the table above, receipts in 1936-
37 increasedd by Gdes. 51,792.00. Of this increase, part was due to the new





HAITI: REPORT OF FISCAL REPRESENTATIVE


tax on foreigners residing in Haiti, which yielded Gdes. 11,154.00 in
1936-37, and part to an increase in radio tax receipts. The latter tax yielded
Gdes. 13,495.15 in 1936-37 as against Gdes. 6,726.40 in 1935-36.
The Postal Administration reported receipts totalling Gdes. 233,917.59
in 1936-37. These receipts which consist chiefly of stamp sales and post
office box rentals, are classified as internal revenues. Expenses of the
Postal Administration, paid from the ordinary budget of the Department
of Commerce, totalled Gdes. 301,296.54 during the same period. The postal
service in Haiti, therefore, is not a self-sustaining organization.
.State-operated municipal water supplies show a better operating report.
Receipts, consisting of flat monthly charges for water supplied to sub-
scribers totalled Gdes. 285,090.75 in 1936-37. Ordinary budgetary expenses
of the Water Service during the same year totalled Gdes. 260,874.91, leaving
a small surplus. The latter figure, however, does not include funds dis-
bursed from extraordinary appropriations during the year for repairs to
water systems and for a number of capital outlays such as the purchase
and putting into operation of a pump at Cap Haitien to supplement the
water supply at that city.


Miscellaneous Receipts

Miscellaneous receipts of the government totalled Gdes. 463,619.25 in
1936-37, compared with Gdes. 692,641.83 in 1935-36 and Gdes. 989,814.39
in 1934-35.
The decline in miscellaneous receipts in 1936-37 amounted to Gdes.
229,022.58, or 33 per cent, when comparison is made with the 1935-36 total.
Miscellaneous government receipts may be divided into three groups:
1) Return on bond investments; interest on the government's time deposit
in New York funds; and the government's share (one-third) of dividends
declared by the government-owned Banque Nationale de la R6publique
d'Haiti;
2) Interest on francs deposited to cover redemption of the outstanding
bonds of the 1910 loan;
3) Interest and amortization on treasury loans to communes; funds
reverting to the treasury through prescription of unpaid treasury checks.
In the first category above, receipts dropped by Gdes. 123,445.02 to
Gdes. 244,823.94 in 1936-37. The decline was chiefly due to the reduction
in government investments in securities of the Repul'lic and the consequent
reduction of interest receipts. Investments, declined from a book value
(cost) of Gdes. 2,944,260.55 on September 30, 1935, to Gdes. 1,109,644.05
on September 30, 1936. and Gdes. 650,239.10 on September 30, 1937.





rHAITI: REPORT OF FISCAL: REPRESENTATIVE


Income in the form of dividends declared by the Banque Nationale de
la R6publique d'Haiti has been as follows since the capital stock of the
bank was acquired by the government in July 1935:
Date Gourdes
July 14, 1936......................................... 68,500.00
January 21, 1937.................................... 45,000.00
September 9, 1937.................................. 33,333.34
Total .............................................. 146,833.34

It should be noted that the above payments constitute only one-third of
dividends declared by the bank. Of the remaining two-thirds, half has
been set aside to increase the surplus of the bank, and half has been paid
out by the'bank for works of such nature as to increase the exportation
of agricultural products. This manner of allocating the profits of the bank
is required by the contract of sale.
Under the second category above (interest on franc deposit) income
has declined from Gdes. 289,001.10 in 1934-35 to Gdes. 247,488.25 in
1935-36 and Gdes. 145,186.90 in 1936-37. The sharp falling off in income
from this source in 1936-37 was due chiefly to the decline in the exchange
value of the French franc. Also, bonds are steadily being redeemed, and
as francs are paid for the redemption of bonds the interest paid on funds
remaining on deposit of course decreases. The government receives interest
at the rate of 2 1/2 per cent on the franc deposit. The interest is converted
monthly into dollars and is deposited to the credit of the government as
miscellaneous receipts.
It should be explained that the franc redemption account does not rep-
resent funds belonging to the government as part of treasury cash assets.
The franc account is money paid out by the government and held in trust
for the benefit of bondholders of the 1910 loan until they choose to redeem
their bonds. Interest on the account is paid to the government rather than
to the bondholders because a tender of francs was made in 1923 at the
time the bonds were called, and the tender included payment of unpaid
interest coupons up to and including the May, 1923, coupon. That many
bondholders thus far have neglected to redeem their bonds is due chiefly
to the fact that a group of the bondholders has claimed that an adjustment
should be trade to allow for the depreciation in terms of gold of thevalue
of the franc. Ignorance of the terms of the contract under which the bonds
were issued accounts for the fact that so many bonds have not been
presented for redemption. The contract in no respect requires payment of
either interest or principal in gold or its equivalent.*
Bondholders are becoming aware of the lack of foundation for their
intention and the bonds still outstanding are being gradually retired.

'The Annual Report of the Fiscal Representative for the fiscal year 1935-36, page 78, gives an account of the
circumstances surrounding the issuance of these bonds and the nature of the obligation.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Bonds retired from January 1 to September 30, 1937, totalled 2,031. This
compares with 3,493 bonds in 1936, 8,266 bonds in 1935, and 9,934 bonds
in 1934.
The balance in the franc redemption account at September 30, 1937,
amounted ,to Fes. 24,767,925. This amount i's more than sufficient to retire
all remaining bonds of the issue. The balance in the same account at the
end of the previous year was Fes. 25,973,920.
Miscellaneous government receipts in the third group above ("all other"
miscellaneous receipts) totalled Gdes. 73,608.41 in 1936-37, as compared
with Gdes. 76,884.62 in 1935-36. Income from this source showed no change
,of any significance.

Receipts from Communes
Receipts from this source require little comment. They consist simply
of 15 per cent of those communal revenues, collected by the Internal Re-
venue Service and retained as a service charge to cover collection costs.
The Service charge totalled Gdes. 277,506.14 in 1936-37, compared with
Gdes. 266,930.55 in 1935-36 and Gdes. 267,363.62 in 1934-35.
The increase in 1936-37 brought the total for the year to the highest
figure recorded in any of the last five years during which the Internal Re-
venue Service has been engaged in collecting communal revenues. The
increase, of course, indicates that there has been a proportionate gain in
the income of the communal administrations. While the gain is not great,
the upward trend is gratifying.
The 15 per cent service charge 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 govern-
nr.ent revenues in the text of the report the amount of the service charge
is included in the total.

Government Expenditures

Government expenditures from revenues in 1936-37 totalled Gdes.
35,033,437.11. In the previous fiscal year government expenditures reached
a total of Gdes. 36,631,574.03. There was recorded a decline in government
disbursements, therefore, amounting to Gdes. 1,598,136.92.
This substantial saving in the cost of government operations was, of
course, for the most part due to the retirement early in the year of all of
the outstanding bonds of the internal, or Series B, issue. Total payments
during the year for service of the public debt, including the internal issue,
amounted to Gdes. 7,456,567.27, or Gdes. 1,243,398.06 less than in the
previous year.
Total government expenditures in 1936-37 were less than in any previous
year of the last twelve, with the exception of 1931-32 and 1932-33. This





HAITI: REPORT OF FISCAL REPRESENTATIVE


does not mean, however, that there was any appreciable slackening f:in
government activities, such as public works, northat:economy was achieved
at the expense of salaries,. wages, rents another more or,..lessflexible
charges which in the past have been subjected to percen, age. reductions,for
the sake.of economy. In the last analysis, it was the.Series B loan re-
tirement, and that alone, which enabled the government to carry on its usual
operations at a much smaller cost to the treasury,
If, for sake of a better comparison, we omit from our calculations public
debt expenses, we find that government payments in 1936-37 were loss.than
those.recorded in 1935-36 by Gdes. 354,738.86, or by 1.27 per cent.,,
Here it should be recalled that in all references in these. reports to
expenses from revenues, the figures include not.only those disbu'rsementl
made from.ordinary or supplementary, budgetary, appropriations, but,,al.p
the often considerable sums which from time to time are disbursed ._rom
extraordinary appropriations. These "extraordinary" expenditures are;ngt
part of the ordinary expense of operating the government.; More properly
they represent expenditures deemed necessary but for which no appropri-
ation has been budgeted. Such appropriations are financed by surplus
current revenues or by accumulated treasury reserves.
Chart No. 5 gives a graphic and correct presentation of Haitian financial
history over a period of 21 years. The expenditure curve includes all dis-
bursements from extraordinary appropriations.
During the past five years, the annual surplus or deficit was as follows:
Fiscal Years Surplus Deficit
1932-33.................................. 4,046,490.59 .........;..............
1933-34..... ................... ...................... 50,110.45
1934-35................................... .................... 12,263,369.70*
1935-36.................................... .................... 2,033,209.70
1936-37.................................... ................... 584,765,92
4,046,490.59 14,931,455.77
(Net deficit: Gdes. 10,884,965.18)
The above table shows that during the five-year period expenditures
exceeded revenues by over ten million gourdes. Almost half of this deficit,
however, was due to the purchase of stock in the Banque Nationale de la
R6publique d'Haiti. This transaction, of course, was in no sense an
operating expense, but an investment in a profitable institution made
possible by the fact that treasury reserves were sufficiently strong
to permit the release of cash for the purpose. In the same manner,
the rest of the deficit represented funds released from treasury reserves
because cash accumulations were considered sufficiently large to permit
their expenditure in carrying out the government's program of economic
rehabilitation. Large sums were spent for roads, bridges, irrigation and
other public works projects which served the double purpose of giving

*Includes Gdes. 5,000,000 representing the purchase price of the capital stock of the Banque Nationale de la
Republique d'Haiti






76 HAITI: REPORT OF FISCAL REPRESENTATIVE

employment in a time of stress and equipping the country with new and
valuable instruments for increasing agricultural production for export.
The Cuban government in 1937 began repatriating large numbers of
Haitians who had emigrated to Cuba. More than 27,000 Haitians have been
repatriated since February, 1937. While these 'returning emigrants for the
most part thus far have been easily assimilated, the fact remains that the
addition of thousands of unemployed laborers has increased the need for
giving opportunities to work on roads and other public works.
For the most part, the works constructed from treasury reserves were
of a productive nature which in the course of time should automatically
restore to the treasury the capital sums expended. The expansion of the
new banana industry is evidence enough of the way in which the public
money, carefully devoted to the aid of agriculture, can bring new sources
of income to the public treasury. It undoubtedly is true that the coming
of this new industry to Haiti would have been much longer delayed if the
way -had not already been prepared by this strong beginning of the go-
vernment's plan for the economic equipment of the country.
If we eliminate extraordinary, or capital, expenditures from the account,
so as to present the cost of government operations exclusive of capital
outlay, the record for the past five years has been as follows:
Ordinary and
Total Supplementary
Revenues Expenditures Surplus
Gdes. (000's) Gdes. '(00's) Gdes. (000's)
1932-33.......................... 37,305 31,674 5,631
1933-34.......................... 36,752 32,588 4,164
1934-35.......................... 30,092 34,136 4,044*
1935-36.......................... 34,598 34,393 205
1936-37.......................... 34,449 33,482 967
173,196 166,273 6,923

Thus, during the past five years there was only one period when gov-
ernment revenues were less than the cost of ordinary government oper-
ations. This was in 1934-35 when the coffee crop was the smallest recorded
for many years past. In each of the other periods, government revenues
were well in excess of ordinary operating costs, and during the five year
period examined the net excess of revenues over operating costs amounted
to nearly seven million gourdes.
This is an extraordinary achievement. Few countries during the same
period, which includes the mid-depression year, can exhibit so brilliant a
record.
Total government expenditures during 1936-37 by departments and
services, are given in the table which follows. Each item includes all
disbursements from ordinary, supplementary (or deficiency), and extraordi-

*Deficit.






HAITI: REPORT OF FISCAL REPRESENTATIVE


nary appropriations, together with the amounts by which expenditures were
greater or less than those of the previous year:


Total Expenditures
1936-37
Gourdes
Services of Series A, B and C Loans.................. 7,456,567.27
International Institutions ................................. 90,000.00
Department of Foreign Relations...................... 1,071,775.49
Department of Finance....................................... 833,445.66
Office of the Fiscal Representative.................... 1,410,847.81
Internal Revenue Service................................... 1,022,117.42
Department of Commerce................................... 345,964.88
Department of the Interior................................. 1,944,792.26
Garde d'Haiti ........................................... 6,843,892.81
National Public Health Service.................... 2,638,537.08
Department of Public Works............................... 36,364.37
Public Works Administration..................... 4,933,628.13
Department of Justice...................................... 1,398,261.85
Department of Agriculture.................................. 92,600.90
National Service of Agriculture................. 1,974,968.78
Department of Labor............................................. 42,954.45
Vocational Education Service..................... 576,371.93
Department of Public Instruction........................ 1,876,416.22
Department of Religion........................................ 443,929.80

Total ......................................................... 35,033,437.11


Decrease from
1935-1936
Gourdes
1,243,398.06
..................
31,342.22 *
145,684.54
1,576.87*
50,896.21*
6,148.91*
263.338.48
19,499.53*
128,246.11
5,066.76*
23,578.35
2,031.02*
2,100.40
76,049.09*
2,172.22
2,435.84
29,111.57*
8,905.10

1,598,136.92
(net decrease)


The table shows that there were few changes of significance during
-1936-37 in the allocation and expenditure of government funds. The one
important exception was in the case of funds disbursed for service of the
public debt. These declined by Gdes. 1,243,398.06 because of the retirement
in October, 1936, of the few remaining bonds of the internal issue. Dis-
burecn crts of the Eeya.rtment of the Interior declined by Gdes. 263,000
because of the greater expenditures the previous year for public cele-
brations and legislative and communal elections. The absence of extra-
ordinary expenses for flood relief during the past year largely accounted
for the reduction of Gdes. 145,684.54 in expenditures of the Department of
Finance. Disbursements of the National Public Health Service were Gdes.
128,246.11 under the previous year's figure. The anthrax epidemic of 1936
had inflated the 1935-36 figures. Operating economies in 1936-37 also
contributed to the economy registered in the operation of the National
Public Health Service.
Increases in expenditures, by departments and services, were unim-
portant in err ount. 1 he.largest increase from the 1935-36 total was report-
ed by the'National Service of Agriculture, whose total disbursements in
1936-37 were Gdes. 76,049.09 greater than in 1935-36. Ordinary expenses
of that service for administration and for agricultural extension increased
in 1936-37, while disbursements from extraordinary appropriations de-


*Increase.





HAITI: REPORT OF FISCAL REPRESENTATIVE


creased. It had been found possible to increase the budget of this service
in 1936-37 with part of the funds no longer required for service of the
internal loan.
Expenditures of the Office'of the Fiscal Representative and of the In-
ternal Revenue Service increased by Gdes. 1,576.87 and by Gdes. 50,896.21
respectively in 1936-37 when comparison is made with expenditures in
1935-36. Allocations in favor of these services, being based on percentages
of revenues collected, vary in accordance with receipts. Internal revenue
receipts increased and a correspondingly greater amount was expended in
collecting internal revenues.*
The 1936-37 budget carried ordinary appropriations totalling Gdes.
33,237,546.87. To this amount there were added during the year supple-
mentary appropriation's totalling Gdes. 140,460.20'and extraordinary ap-
propriations totalling Gdes. 1,484,236.20. A nuniber of appropriations were
cancelled in whole or in part during the year in order to provide ways and
means for new appropriations. Also, he allocations of the revenuecollect-
ing offices increased automatically because receipts exceeded ways and
n,caus as cGigitrally-estinated. 'Ihe appropriations of the Office,of the
Fi-scal Representative and of the Internal Revenue Service are based on
fixed percentages of receipt's collected.
In all, funds appropriated from revenues for the fiscal year 1936-37
totalled Gdes. 35,159,888.22.
DeFartments and services wthioh were beneficiaries of supplementary and
extraordinary appropriations during the year are listed below:
Supplementary Extraordinary
Appropriations Appropriations Total
Gourdes Gourdes Gourdes
Public Works Administration........ 55,000.00 865,000.00 920,000.00
Department of Foreign Relations.... 35,500.00 470,008.33 505,508.33
Department of the Interior................ 10,700.00 .104,949.20 115,649.20
Department of Labor...................... 31,210.20 .................. 31,210.20
National Service of Agriculture....................... 25,752.32 25,752.32
Department of Public Instruction.... 2,400.00 10,000.00 12,400.00
Department of Commerce.............. 5,000.00 .................. 5000.00
Department of Finance............................................ 3,526.35 3,526.35
National Public Health Service........................ 5,000.00 5,000.00
Department of Agriculture................ 650.00 ................ "650.00
Total ...................................... 140,460.20 1,484,236.20 1,624,696.40

During the previous year there were supplementary appropriations to-
talling Gdes. 403,446.16 and extraordinary appropriations totalling Gdes.
2,215,999.87. There was a marked decrease in 1936-37, therefore, in funds
appropriated to supply deficiencies in ordinary appropriations and to meet
unforeseen and urgent needs. At the same time, it should be particularly
noted that appropriations for productive purposes' actually increased in
1936-37. The previous year had been a period when considerable money
had to be expended for flood relief, for controlling an epidemic of anthrax,
*A detailed account of expenditures by these two services is given in the sections which follow.






HAITI: REPORT OF FISCAL REPRESENTATIVE


for public celebrations and other purposes having no connection with the
program for economic equipment. In 1936-37, however, new appropriations
for public works totalled Gdles. 1,070,000,* as against only Gdes. 826,000
recorded in the previous fiscal year.
Extraordinary approproriti'ons in 1936-37 were allocated for the follow-
ing purposes:
Gourdea
Roads and bridges .................................................................. 740,500.00
Representation at international conferences, expositions, etc. 314,258.33
M municipal waterworks ............................................................ 143,000.00
Municipal improvements ................................................... 85,500.00
Public celebrations ............................................................... 80,000.00
Flood control, drainage, irrigation........................................ 39.000.00
Relief, returning emigrants................................................... 20,000.00
Anthrax and typhoid control.................................................... 17,500.00
Agricultural extension ......................................................... 13,252.32
Education ...... ....................................................................... 10,000.00
M miscellaneous ...................................................................... 21,225.55
Total .............................................................................. 1,484,236.00

Extraordinary appropriations for roads and bridges, totalling Gdes.
740,500 in 1936-37, were more than double the total amount (Gdes. 360,000)
appropriated for this purpose in the previous year, and nearly double the
corresponding allocation (Gdes. 386,000) in 1934-35.
The year was notable, therefore, for especial activity in road building.
Of the several roadbuiilding projects for which funds were specially allo-
cated, the rnost imlrortant project, from the point of view of utility, was
the construction of a new road connecting the town of Marmelade with the
main highway leading from Gonaives to Cap Haitien. This fiew road,
which is now open to traffic, is expected to open up a vast coffee-produc-
ing area where development for years had been retarded by the difficulty of
fransZpoting coffee to market. Some of the best coffee in Haiti is'grown
in the Manrrelade region. The relatively small expense of building.the 'new
road should be quickly repaid to the treasury though increased produc-
tionr of exportarble commodities.
Other allocations of similar utility included those for roads in the
vicinity of Jacmel, Dondon, Petite-Riiviire de Bayonnais, the Plaine du
Nord, and at Meille. The sum of Gdes. 70,000 was appropricied in June for
needed repairs to the Petionville-Kenscoff road.
The Toad projects mentioned, together with a few others of less im-
porta'nce, absorbed only Gdes. 290,500 of the sum of Gdes. 740,500 allocated
in 1936-37 by extraordinary appropriations for road building. The balance,
amounting to Gdes. 450,000, was appropriated exclusively for continuing
work on the road along the Haitian-Dominican frontier.
This last-mentioned project had been undertaken because of a provision
included in the definitive arrangement for settlement of the Haitian-Do-
*This amount includes Gdes. 150,000 appropriated in favor of the Department of Foreign Relations for work
*. the frontier road.





HAITI: REPORT OF.FISCAL REPRESENTATIVE


nzinican frontier by which both countries agreed to share expenses in
building the road; So far as has been thus far announced, the road will
not connect with any main highway on the Haitian side of -the frontier.
Until a connecting road can be built at.some future date, therefore, the
frontier road can serve no practical purpose, so. far as Haiti is concerned,
except to give employment to some Haitian labor. It is, therefore, prima-
rily a political project for both countries interested and contributing to its
construction. Considering the large sum already expended on the road,
it has teen a heavy charge and its maintenance will continue to be a
burden for the future until some use is found for it as a necessary or at least
useful part of fhe road, system.
Referring again to the itemized list of extraordinary appropriations, by
objects of expenditure, we find that over three hundred thousand gourdes
were allocated for representation abroad. Of this amount, an allocation in
the sum of Gdes. 64,258.33 was made to permit diplomatic representation
at Bogota and Caracas. This appropriation was for a desirable im-
proveiment in the Republic's diplomatic representation abroad. The open-
ing of these new legations should help promote a closer understanding
between Haiti and its sister repulblics.to the south, although the prospect
of any traterial gain in the near future, as. through promoting trade be-
tween these countries, is problematical.
Otherwise, special funds allocated for representation consisted of two
appropriations in the amount of Gdes. 125,000 each, for representation at:
1) The Buenos Aires Peace Conference, held early :in the fiscal year; and
2) the Paris Exposition held during the past summer.
This report has given above a soahewhat detailed account of government
expenditures from extraordinary appropriations, for it is these dis-
bursrrents Which give a clear indication of the degree of success with
which government revenues- are applied, to constructive purposes. The
ordinary budget necessarily varies little from year to year, and an analysis
of ordinary (and supplementary) expenditures therefore offers little of
interest; A full report of government expenses, subdivided by objects of
expenditure and by functions is given in the tables.

Customs Service
The operating fund of the Fiscal Representative; exclusive of the In-
terhnal Revenue Inspection Service, is limited to five per cent of customs
receipts. This fund arr.ounted to Gdes. 1,437,143.64 in 1936-37, or Gdes.
10,024.64 less than the corresponding figure for 1935-36.
Anr.ong the many expenses met from this fund may be listed:
1) Operation of the custom service;
2) Maintenance of customs buildings and property;






HAITI: REPORT' OF FISCAL REPRESENTATIVE


3) Maintenance of administration building and offices occupied by
this service;
4) Operation of certain port facilities: Salaries of port officials (In-
spector General of Maritime Transportation, port captains, pilots,
crews of port boats) ;'maintenance of port boats'; Port Offices at
I'ort-iau-Prince and Cap Haitien; coastwise trade inspection, etc.;
5) Cost, in part, of maintaining docks and dock equipment at various
ports;
6) Administration and operation of export commodity standardi-
zation (coffee and ccaao);
S7). Infection and auditing of customs operations;
8) Maintenance of inspector's temporary quarters at Gonaives, in-
'spcrctors' and directors' residences at Cap" Haitien, Saint Marc,
Cayes, Jerimie, Jacmel, Fort Libert6, Belladere, Ouanaminthe;
9) General repairs and.maintenance of buildings occupied jointly
by the Custons Service and other government offices (Post Of-
fices, Internal Revenue Offices, Registry Offices, etc.);
10) Cost .of government accounting, auditing, disbursing, and general
treasury service (Service of Payments);
11) Payrent to the Banque Nationale de la. Rpuiblique d'Haiti of its
contractual commission of one per cent of-customs receipts;
12) Administration of "non-revenue" accounts (trust funds, revolving
funds, guarantee bonds, etc.);
13) Ccnrrilation of commercial a'nd financial statistics, publication of
Monthly B;ildletin, Annual Report and other economic and fi-
nanci'al reports and statistics.
In addition, the office of i(he Fiscal Representative carries out certain
functions in connection with the public debt involving administrative and
clerical costs. Also, the Head Office of the organization, because of the
nature of its varied activities, must retain a legal adviser, an extensive
clerical staff, stenographers and file clerks.
Expenditures iby the service necessarily are carefully allotted. Since
accruals to the operating fund vary widely from year to year, the greatest
care rrust le exercised to see that reserve funds are accumulated in years
of good revenues (when the operating fund is correspondingly large) in
_ brr'tc n (ct the relatively inflexible expenses in years when accruals to
the operating fund are restricted. The service maintains an elaborate cost
accounting system which enables it to keep a close control over dis-
burserrents and to analyse its costs. Tabulations of cost accounting figures
over a icricd cf tnany years are given in Tables 22 to 28, annexed to this
report.
Lt:rirg 126-37, expenditures from the operating fund of the Fiscal
Representative totalled Gdes. 1,410,847.81. Since accruals to the fund
an-ounted to Cdc.s. 1,437,143.64, expenditures were Gdes. 26,295.83 less than





HAITI: REPORT OF FISCAL REPRESENTATIVE


accruals. This surplus, added to the surplus of Gdes. 96,245.75 recorded at
the end of the previous year, produced a reserve at Sept. 30, 1937, amount-
ing to Gdes. 122,541.58. This surplus has been set aside to serve as a re-
serve in years when customs revenues, and hence accruals to the operating
futnd, are low, and the expenditures of the organization are greater than
current accruals.. This contingency has arisen from time to 'time, as in
1934-35 when expenses exceeded accruals to the fund by Gdes. 193,562.70.
It is worthy of note that during the 21 years of its existence, the organi-
zation has succeeded, without interruption, in, meeting all of its operating
costs from accruals to the "five per cent fund". In addition, it has in
nearly every year paid from its operating fund the commission, amounting
to one per cent of customs revenues, contractually payable by the govern-
ment to the Banque Nationale de la Republique d'Haiti for the treasury
service the bank renders as depository of customs receipts.
Five per cent of culstor.s revenues during the 21 year period totalled
Gdes. 30,865,856.06. Expenditures from the fund during the same period
amounted to Gdets. 30,743,314.48.
Expenditures from the fund during the past five years have shown
remarkably little variation. The highest figure reported for any year
during the period was Gdes. 1,417,528.08 in 1932-33. The lowest was Gdes.
1,409,270.94 in 1935-36. From the latter figure, expenditures increased by
Gdes. 1,576.87 to Gdes. 1,410,847.81 in 1936-37.
Disbursemnents for administrative expenses declined from Gdes.
588,807.95 in 1935-36 to Gdes. 556,198.88 in 1936-37.' Similarly, the expense
of customs operation declined from Gdes. 507,537.91 in 1935-35 to Gdes.
506,301.07 in 1936-37. There was a corresponding increase in the outlay
for repairs and maintenance and for the acquisition of property. Expenses
classified under repairs and maintenance increased from Gdes. 15,977.73
in 1935-36 to Gdes. 45,899.70 in 1936-37. A number of repair projects
undertaken during the year accounted for the increase in expenses under
this classification. Among the various repairs and improvements to govern-
ment 'property carried out during 1936-37 from the "five per cent fund"
may be mentioned:
1) Repainting exterior walls and roof of the Palace of Finance;
2) Refinishing of floors in space occupied by the Office of the Fiscal
Representative in the Falace of Finance;
3) Repainting exterior walls of customhouse and customs warehouses
at Port-au-Prince; repairs to warehouse roofs;
4) General repairs to customs directors' and inspectors' residences at
Jacmel, Petit Goive, Saint Marc and Cap Haitie'n;
5) Screening and repainting of inspector's quarters at Gonaives; cons-
tructibn of fence enclosing yard there; general repairs and repainting of
custom house at Gonaives;





HAITI: REPORT OF FISCAL REPRESENTATIVE


6) General repairs to customs warehouses at Jacmel and Cap Haitien.
Expenses classified under "fixed charges" include only the commission
paid to the Banque Nationale de la R6publique d'Haiti for treasury service.
As in previcts years, the portion 'paid by the customs service consisted of
one per cent of total customs revenues. This commission amounted to
Gdes. 287,428.73 in 1936-37, as compared with Gdes. 289,433.66 in 1935-36.
Expenses for administration and operation combined amounted to 75.31
per cent of total disbursements from the five per cent fund in 1936-37. The
corresponding share for the previous year amounted to 77.80 per cent. The
outlay for repairs and maintenance comprised 3.26 per cent of total
payments in 1936-37, as against only 1.13 per cent in 1935-36. Similarly,
the ouALlay for property acquisition comprised 1.06 per cent of the total in
1936-37 (0.53 per cent in 1935-36); and for "fixed charges", 20.37 per cent
(20.54 per cent in 1935-36).
Expenditures for administration and operation are classified, for account-
ing purposes, into six accounts. These are: 1) salaries and wages; 2) sup-
plies and materials; 3) transportation; 4) communication service; 5)
rents; and 6) special and miscellaneous. Of these accounts, only "salaries
and wages" and "transportation" showed any significant movement during
the past year. Under both accounts, disbursements declined.
The outlay for salaries and wages declined from Gdes. 940,721.40 in
1935-36 to Gdes. 923,715.36 in 1936-37. Expressed as percentages of total
administration and operation costs, the portion paid out in the form of
salaries and wages increased from 85.81 iper cent in 1935-36 to 86.94 per
cent in 1936-37.
Transportation cost declined from Gdes. 87,583.61 in 1935-36 to Gdes.
72,470.87 in 1936-37. No new automobiles were -purchased in 1936-37 to
replace worn-out equipment. Of the two official automobiles assigned to
the service, the cost of which is paid from the five per cent fund, one was
sent to New York during the year for a thorough overhaul and recondition-
ing. Experience has shown that automobiles of older models, with higher
road clearance, are better adapted to conditions in Haiti than the newer
designs. It has therefore been considered economical to keep automobiles
in operation as long as possible even though the cost of thorough recon-
ditioning may be expensive.
The cost accounting system maintained by this office permits a detailed
analysis of customs costs at all ports. The figures for 1936-37 show that
for each gourde collected during the year the cost of collection averaged
Gde. .0176. This compares with a similar average of Gde. .0175 in the
previous year.
The 'best record in economy was made at Port-au-Prince, where opera-
tions in 1936-37 cost Gde. 0.0131 per gourde collected, or considerably less
than the average, for all ports, of Gde. .0176. During the previous year.
Gonaives had been the leader as the port where operations cost least.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Gonaives was in second place in 1936-37 with Gde. 0.0151 ,per gourde
collected, followed by Miragoine (Gde. 0195); Cayes (Gde. .0199); Cap
Haitien (Gde. .0212); Jacmel (Gde. .0227); Petit Goive (Gde. 0.231); Saint
Marc (Gde. .0276); and Fort Libert6 (Gde. .0283).
It is interesting ito note that during the period extending from 1919 to
1937 the cost of customs operations amounted to Gde. .0194 per gourde
collected. The 1936-37 figure of Gde. .0176 is therefore considerably less
than the average.

Internal Revenue Service
The operating fund to cover the cost of collecting and inspecting internal
revenues consists of 15 per cent of internal revenues collected. Of this
fund, an amount not exceeding 5 per cent of internal revenues collected is
used to cover the cost of inspection work carried on by the Internal Revenue
Inspection Service. In addition, the Internal Revenue Service, as distinct
from the Inspection Service, retains 15 per cent ,of the communal revenues
which it collects for account of various'coirimunal administrations. Colle&&
tions so retained are used to cover the cost of rendering this service to the
communal governments.
Accruals to these funds during the past two fiscal years were as follows:
1936-37 1935-36
Gourdes Gourdes
Internal Revenue Service
10 per cent of internal revenues..................... 496,467.30 469,542.64
15 per cent of communal revenues.................. 277,506.14 266,930.55

773,973.44 736,473.19
Internal Revenue Inspection Service
5 per cent of internal revenues......................... 248,233.65 234,771.32
Total ........................................................ ,022,207.09 971,244.51
From these funds, the Internal Revenue Service and the Internal Revenue
Inspection Service expended the following amounts during the periods
given:
1936.37 1935-36
.ourdes Gourdes
Internal Revenue Service.................................. 826,493.02 793,077.51
Internal Revenue Inspection Service.................. 195,624.40 178,143.70
1,022,117.42 971,221.21

Although the Agreement of August 7, 1933, provides that the Internal
Revenue Inspection Service may expend an amount not exceeding 5 per cent
of internal revenue receipts, actual expenditures by that service in 1936-37
amounted to only 3.9 per cent (3.8 per cent in 1935-36) of internal revenue
receipts. The unused balance of .the fund, which was not required by the
Inspection Service, was made available to the Internal Revenue Service as
provided by the Agreement of August 7, 1933. This contribution in 1936-
37 was more than enough to permit the Internal Revenue Service to pay






HAITI: REPORT OF FISCAL REPRESENTATIVE


e its share of the contractual one per cent commission due the Banque Na-
pj tionale de la R6publique d'Haiti for its services in acting as depositary of
t internal revenues. This commission amounted to Gdes. 49,646.73 in 1936-
37, and was paid in full by the Internal Revenue Service from its operating
; fund.
S Combining all costs of the two services, we find that expenses for admi-
snistration and operation increased from Gdes. 888,051.70 in 1935-36 to
SGdes. 946,985.71 in 1936-37. Salaries and wages incrmesed from Gdes
679,799.17 in 1935-36 to Gdes. 687,356.83 in 1936-37; expenses for the
purchase of supplies and materials from Gdes. 52,556.51 to Gides. 80,240.35;
and transportation costs from Gdes. 150,817.31 to Gdes 160,685.35.
Costs of the Internal Revenue Inspection Service were as follows during
each of the past two 'fiscal periods:
S1936-37 1935-36
Gdes. Gdes.
Salaries ........................................ 104,487.50 102,270.00
Supplies ......................................... 3,133.67 1,399.05
Transportation ................................ 65,554.28 65,880.10
Equipment ...................................... 21,946.75 8,113.05
Miscellaneous ......................... 502.20 481.50
Total ..................................... 195,624.40 178,143.70
The only change of any importance during the year was in equipment
costs, which were higher in 1936-37 because of the replacement with new
equipment of four used automobiles. Most of the work of the Inspection
SService involves traveling in all parts of the Republic to visit internal
revenue offices, distilleries, etc. The "transportation" and "equipment"
'items therefore comprise a large part of the total expenses of the Service.

I Treasury Position

Government expenditures from revenues exceeded revenue receipts in
1936-37 by Gdes. 584,765.92. This relatively small operating deficit was
easily met from the cash resources of the treasury, and cash in turn was
replenished by sales ,at favorable prices of part of the government's invest-
.ments in its own securities. Because of the small amount of the operating
deficit, and since other factors influencing the treasury balance sheet were
unirmportant during 1936-37, the year ended with the cash resources of the
treasury close to the figures recorded at the end of the previous fiscal
period.
Cash resources are still considered adequate to cover current government
Expenditures in the months of the "dead season" when revenues normally
are low and current expenses exceed revenues.
The seasonal swing of Haitian revenues is particularly acute, and it is
of the utmost importance that large cash reserves be accumulated during
the first nine months of the fiscal year in order to meet current expenses
in the subsequent "dead season".






HAITI: REPORT. OP FISCAL REPRESENTATIVE


In administering the treasury, the government has been consistently
successful in maintaining reserves at the proper level. At no period during
the last depression, and in the subsequent years of slow recovery, has there
been a shortage of cash. The government has not had to resort to short-
term financing, or borrowing in any form, in order to meet payrolls and
to carry on the usual activities of the government in the months of low
revenues.
Table No. 45 gives a detailed statement of treasury assets and liabilities.
The same statement in simplified form, showing the position of the treasury
at the end of the last two fiscal years, is given below:
Sept. 30, 1937 Sept. 30, 1936
Gourdes Gourdes
Assets
Current assets .................... 2,656,689.52 2,873,039.46
Investments ........................ 5,650,239.10 6,109,644.05
Other assets ....................... 4,156,974.49 4,236,883.63
12,463,903.11 13,219,567.14
Liabilities
Current liabilities ................ 1,682,473.15 1,865,096.42
Reserves ............................ 9,398,183.57 9,438,610.38
Surplus .............................. 1,383,246.39 1,915,860.34
12,463,903.11 13,219,567.14
Current assets include only cash items. Of the total, amounting to
Gdes. 2,656,689.52 at September 30, 1937, the sum of Gdes. 1,878,342.97
represented the balances in government gourde accounts in the Banque
National de la R6publique d'Haiti. This item represents funds available
for domestic operations of the government. At the end of the previous
fiscal year, the same item totalled Gdes. 1,937,482.23. The September 30,
1937, figure, therefore, was only Gdes. 59,139.26 less than the corresponding
amount at the close of the previous year.
Government disbursements abroad are paid from government time and
sight accounts in New York funds. These deposits totalled Gdes. 687,906.10
at September 30, 1937, as against Gdes. 844,024.35 at September 30, 1936.
The decline amounted to Gdes. 156,118.25.
Other items included among current assets at the end of each period
consisted only of receipts in suspense and cash in the hands of disbursing
officers. These totalled Gdes. 90,440.45 as of September 30, 1937, or Gdes.
1,088.43 less than at the close of the previous fiscal year.
Against current assets of Gdes. 2,656,689.52 at September 30, 1937, there
were current liabilities totalling Gdes. 1,682,473.15. The difference (Gdes.
974,216.37) might properly be termed, as in corporation finance, the
workingg capital" of the government. The working capital at t'he end of
the previous year amounted to Gdes. 1,007,943.04.
Of liabilities listed as "current", the sum of Gdes. 871,869.38 represented
checks issued and not yet presented for payment. The same item at Sep-
tember 30 of the previous year amounted to Gdes. 951,181.11.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Bala~nes in "non-revenue" accounts, totalling Gdes. 570,115.68 at Sep-
tember 30, 1937, are included among current liabilities, although in a
numbe- of cases they do not imply an immediate or near-future demand
for cash. The "non-revenue" accounts inp rude cash bonds of various kinds
(notaries' bonds, postal contractors' bonds, bonds deposited by licenced
'owners of firearms, etc.), revolving funds (Bureau of Supplies, Public Works
Administration, the State Printing Office, etc.), the Garde d'Haiti savings
accounts and pension fund, and a number of similar items totalling 24 in
all at September 30, 1937. As of September 30, 1936, the same balance
aggregated Gdes. 621,212.23.
It should 'be explained here that "non-revenue" receipts and expenditures,
in accounting for Haitian government funds, are kept separate from all
statements of revenue receipts (and disbursements from revenues recorded
in these reports. When reference is ,made to "total revenues" or "total
expenditures", the figures given do not include receipts or withdrawals
from the "oon-revdnule" accounts. In monthly, or annual; tabulations of
government receipts and expenditures, as given in the tables appended to
ths report, only the 'net movement i'n the "non-revenue" accoants is given,
and the net figure is always shown as a separate item (debit or credit, as
the case may be) following total government expenditures from revenues.
During 1936-37, for example, there was a net disbursement of Gdes.
48,396.58 from the non-revenue accounts.
Essentially, the "non-revenue" accounts are trust funds which the
treasury administers for account of government services (as in the case
of the Public Works revolving fund) or for account of persons doing
business with the State (as in the case of cash bonds). Total transactions
in these accounts during the course of a year may amount to several million
gourdes, but the net increase or decrease in the balances of all accounts
taken together is usually very small. In 1936-37, for example, disbursements
exceeded receipts by only Gdes. 48,396.58. There was a similar excess of
receipts in 1935-36 amounting to Gdes. 131,915.12.
Other current liabilities at September 30, 1937, consisted of the un-
expended balance in the operating fund of the Fiscal Representative (Gdes.
122,541.58) and the sum of Gdes. 117,946.51 representing unexpended
balances of extraordinary appropriations. Unused balances in budgetary
credits revert to the treasury at the end of each fiscal year. Extraordinary
appropriations, however, may be drawn on at any time during a period of
two years from the date of the appropriations.
Investments on September 30, 1937, comprised chiefly an item amounting
to Gdes. 5,000,000 representing the purchase price of the stock of the
Banque Nationale de la R6publique d'Haiti owned by the government. The
Banque Nationale de la R6publique d'Haiti is the only operating enterprise
in which the government owns a stock interest. Other valuable properties,
such as the private domain of the State, the telephone and telegraph system,






HAITI: REPORT OF FISCAL REPRESENTATIVE


and municipal water works, are owned outright by the State. No appraisal
.*as ever bqen placed on these properties, a'nd the treasury balance sheet
does not list them as treasury assets. In the case of the Banque Nationale
de la R6Elpu~lijue' d'-aiti, home~er, since ownership is represdeted by
common stock in the institution, the purchase price of the stock is' carried
among treasury investments. At the same time, to preserve the original
purpose of the treasury balance sheet, which was to show the cash position
of the treasury, an item of Gdes. 5,000,000 is carried under reserves.
.Although ownership of the Bahque Nationale de la Republique d'taiti,
under the accounting practice adopted, does not affect the treasury surplus
account, it should be noted that the valuation placed on the stock re-
presents ownership in a profitable institution which pays substantial divi-
dends to the government.
Other assets listed as investments as of September 30, 1937, consisted
entirely of Series A and Series C bonds of the Republic. Of these; Series
A bonds having a face value of $27,300, and carried on the balance sheet
at their cost price of Gdes. 121,165.00 ($24,233.00) were held without
change throughout the year for account of the Garde d'Haiti. This item
represents the investment of about half of the money owed to members
of the Garde d'Haiti who are depositors in the savings accounts maintained
by the Garde for its personnel.
The retraining item under "investments" consisted of Series A and
Series C bonds held by the treasury. These bonds, carried at cost, were
valued at Gdes. 529,074.10 on September 30, 1937, as against Gdes.
912,301.55 on September 30, 1936, the difference being the amount of sales
to meet requirements of the treasury.
Bond.investments held at September 30, 1937, are listed as follows:
Nominal Value Book Value (cost)
Dollars Gourdes
Series A ...................................... 92,900 354,070.25
Series C...................................... 36,000 175,003.85
Total ................................. 128,900 529,074.10

The Series A bonds were acquired at an average cost of 76.2, and the
Series C bonds at an average cost of 97.3.
Series B bonds having a face value of $15,000 were held at the beginning
of the fiscal year 1936-37. These bonds, plus $7,700 in Series B bonds
subsequently acquired in exchange for Series A bonds, were sold in Oc-
tober, 1936, in compliance with the Fiscal Agent's call for redemption of
all outstanding bonds of that issue. No Series A bonds were sold during
the year, although the investment in these bonds fell from $100,600 on
September 30, 1936 to $92,900 on September 30, 1937; due to the exchange
of Series A bonds to the amount of $7,700 referred to above. Holdings of
Series C bonds showed no change during the year, except for a single
transaction on July 22, 1937, when bonds of this issue, valued at the face






HAITI: REPORT.OF FISCAL REPRESENTATIVE


amount of $72,799.74, were sold to the fiscal agent. This sale was completed
primarily tb permit the Fiscal Agent to utilize all funds remaining in the
amortization account on that date, thereby avoiding the call of bonds .at par
as required by the loan contract. The sale also was advantageous in that
it served to build up treasury cash reserves.
SUnder "other assets", the treasury balance sheet shows two items. These,
on September 30, 1937, were the fiduciary currency reserve (Gdes.
3,381,290.92) and advances to communes (Gdes. 775,683.57). The corre-
spgnding amounts at the end of the previous year were Gdes. 3,420,773.25
anl, Gdes. 816,110.38 respectively.
.The fiduciaryy currency reserve" represents amounts withdrawn and
placed at the disposal of the Banque Nationale de la R6publique d'Haiti
in cover of fractional currency out of circulation and in t'he vaults of the
bank. These funds, although they are, at the disposal of the bank, are
cgnside'red as assets of the government treasury, sino an equivalent
air oint,, in fradtionaj currency out of circulation is held in the vaults
of t'he bank. This excess fractional currency m!ay (although there
is no formal arrangement to that effect) be considered as fractional coinage
placed at the disposal of the government by the bank. Or, it could be
looked upon simply as coins purchased from the bank by the government.
More properly, however, the item on the asset side of the balance sheet
should be looked upon as a reserve fund on deposit at the bank. It is a
treasury asset since the bank formally is obliged to return the reserve to
the government as and when coins now in excess of circulation needs
eventually are, required by commerce.
The present somewhat involved arrangement with the Banque Nationale
de la R6publique d'Haiti was entered upon in 1926 in order to carry out
a stipulation of the Monetary Reform Act of April 12, 1919, which provided
(Article 14) that: "If experience demonstrates that the quantity of
fractional nickel Icoins at present in circulation is too great for the needs
of the country, the Government shall take the measures necessary to retire
the excess circulation, commencing with the fifty lentihme pieces."
The 1926 arrangement, sanctioned by the Law of July 16, 1926, provided
that funds rendered available in 1921 and by the budgets for the fiscal
years 1924-25 and 1925-26 for the retirement of fractional currency, as well
as future appropriation for this purpose "shall be used for the temporary
Retirement of fractional currency in excess of the business needs". It
further provided for a monthly adjustment by which the bank restores to
the government treasury amounts at its disposal in excess of fractional
currency in its vaults. The adjustment is based on a daily average of
fractional currency out of circulation during the month previous to the
month when the adjustment is made.
. Il the years from 1921 to 1930 the reserve was built up to its present
maxirmuim of Gdes. 3,622,500. This figure was arfli~rarily chosen. It re-






dAITI: REPORT OF FISCAL REPRESENTATIVE


presents half of the total issue of fractional coins, and was considered at
the time as cormplyil:g fully with the obligation under Article 14 of the
Monetary Reform Act of 1919.
To show this maximum amount which the government had agreed to
pay the bank under the 1926 agreement, the treasury balance sheet carries
among liabilities an item in the amount of Gdes. 3,622,500. The corre-
sponding asset, however, representing funds at the disposal of the bank
and adjusted each month to conform to coins out of circulation, is usually
considerably under the maximum figure. On April 30, 1937, for example,
the figure had dropped to Gdes. 2,288,018.79, indicating that in the previous
month there had been a heavy demand for subsidiary coinage and the re-
serve requirements at the Banque Nationale de la R6publique d'Haiti were
correspondingly less. At the end of September, 1937, however, the reserve
for coins out of circulation had dlinmbed to Gdes. 3,381,290.92. This figure,
however, is under the corresponding reserve of Gdes. 3,420,773.25 on
September 30, 1936, and Gdes. 3,610,000 on September 30, 1935. As a
niatter of fact, at :ihe end of the fiscal years 1930-31 and 1931-32, currency
out of circulation at the year-end slightly exceeded the maximum reserve.
The tendency in recent years for the reserve fund to decline means that
irore subsidiary currency is being used for the needs of commerce. As
business improves, or as coins are lost or destroyed, the amount of the
reserve will, of course, diminish, and eventually the amount now considered
as a contingentt asset may become an unobligated cash asset of the treasury.
The arrangement described has worked well in practice since it has
stopped the forced circulation of coins in excess of actual business needs.
The excess circulation of fractional coins had been a troublesome problem
in the ears before the reserve arrangement was put into operation. At
present the only difficulty is that, with the monthly adjustment, reserve
requirements reach their maximum in the months of the "dead season"
when government requirements for cash also are heaviest. Conversely, the
Banque. National de la R6publique d'Haiti finds that the government
reserve deposit approaches its lowest point in the months when bank loans
and discounts are highest and when -bank financing of the export crops
reaches its greatest activity.
Returning to the treasury balance sheet, the only remaining item is
"advances to communes". These amounted to Gdes. 775,683.57 on Sep-
tember 30, 1937, a decline of Gdes. 40,426.81 from the corresponding figure
for September 30, 1936. No new advances of treasury funds were made
during the year. The decline therefore represents the gross amount received
by the treasury as amortization on loans to communes, or as repayment of
principal on treasury advances to the communal governments.
The communal governments to which advances have been made continue to
be slow in settling their accounts with the government treasury. Neverthe-
less,the figures show that some progress has been made during the past year.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Public Debt
The fiscal year 1936-37 was notable for the fact that at the beginning
of the year the last few remaining bonds of the internal, or Series B, funded
debt were retired through the operation of the sinking fund.
The Republic now has no internal funded debt, and no floating debt
whatsoever unless fiduciary currency unprotected by reserves may be
considered as floating debt. As a matter of fact, it has been the accounting
practice of this organization for many years past to include this last item
as part of the debt, although the propriety of doing so might be questioned.
In any case, the error would be on the side of conservatism.
On Sept: 30, 1937, the gross public debt of the Republic consisted of
the following items: Gourde
Series A bonds........................................... 35,036,040.70
Series C bonds.......................................... 5,658,755.25
Fiduciary currency ............................................ 3,622,500.00
Total ....................................... ... 44,317,295.95
The total debt as given above compares with corresponding totals of
Gdes. 49,092,715.80 on September 30, 1936, Gdes. 54,930,599.85 on Sept. 30,
1935, and Gdes. 60,830,599.85 on September 30, 1934.
The figures given above for the funded debt are net amounts, after
deduction of sums remaining in the sinking funds of each bond issue at
the year-end which had not yet been applied to amortization. These
unapplied sums at September 30, 1937, were as follows:
Gourdes
Series A sinking fund................................ .. 2,393,959.30
Series C sinking fund............................. 17,360.00
Total ...........................-- --.... 2,411,319.30
The balance in the Series A sinking fund at -'he above dae was unusually
large. This was because the sinking fund included funds amounting to
Gdes. 1,547,500.00 which became payable on October 1, 1937, to those
bondholders whose Series A bonds had been drawn by lot as a result of
the call of bonds for redemption effected by the fiscal agent of the issue
in July, 1937.
This redemption of bonds by call at par was the first which had taken
place since 1928. During the intervening years it had always been possible
-to utilize sinking fund monies by buying bonds in the open market at par
or better. In 1937, however, the price of the bonds had risen so high that
it was no longer possible to buy bonds at par or better. Consequently, in
accordance with a provision in the bond contract, sums remaining in the
sinking fund at July 22, 1937, and not yet applied to amortization, had
to be utilized by calling a sufficient number of bonds at par to exhaust
the sinking fund.
In accordance with this requirement, the fiscal agent, beginning on July
29, 1937, published redemption notices in leading New York newspapers.






HAITI: REPORT OF FISCAL REPRESENTATIVE


These notices announced that on October 1, 1937, $309,500 aggregate
principal amount of bonds of the Series A issue would be redeemed at par
at the principal office of The National City Bank of New York, 55 Wall
Street, New York.
It was this operation which accounts for the relatively large, amount
remaining in the sinking fund at September 30, 1937, and not yet applied
to amortization.
The same contingency did not arise in the case of the Series C issue.
Sufficient bonds were sold from the treasury investment account to avoid
the necessity of calling bonds at par.
A total of Gdes. 7,456,567.27 was disbursed in 1936-37 for service.of
the public debt. This figure compares with Gdes. 8,699,965.33 in 1935-36
and Gdes. 8,695,644.40 in 1934-35.
Retirement of the balance of the Series B issue required the disbursement
of only Gdes. 539,803.62, since most of the outstanding bonds of this
issue had been redeemed the previous year.
Interest payments in connection with service of the public debt amounted
to only Gdes. 2,627,334.17 in 1936-37. This compares with Gdes. 2,934,658.90
in 1935-36 and Gdes. 3,290,205.66 in 1934-35.
Interest costs in 1935-37 amounted to only 7.63 per cent of revenue
receipts. This compares with 8.48 per cent in 1935-36." In 1923-24, interest
on the public debt had cost Gdes. 6,276,510.66, or 19.08 per cent of total
revenue receipts.
With the retirement of the internal debt, amortization costs are also
becoming far less expensive. The Series B issue had required the ex-
penditure of over Gdes. 1.800,000 annually for interest and amortization.
This sum will no longer have to be incl~died in the annual budget.
Amortization payments in 1936-37 totalled Gdes. 4,789,188.25, or 13.90
per cent of revenue receipts. Payments for the same purpose in 1935-36
totalled Gdes. 5,730,904.10, or 16.56 per cent bf revenue receipts.
Prices for Series A bonds in December, 1936, touched par for the first
time since before the depression. Quotations for the bonds have steadily
climbed during the past three years, as is shown below:
Fiscal years High Low
1934-35 .................................................... 92 79
1935-36 ................................................ 99j 4 91%/
1936-37 ................................................ 101% 96 /2

The high mark for the above period was reached in August, 1937. The
subsequent unsettlement of security prices in American markets has affected
the price of Haitian bonds as it has affected most bonds and stocks.
A brief outline of Haitian public debt history, the flotation of the loan
of 1922, disposition of the proceeds of the loan and similar infbrmIation
regarding the public debt of -Haiti is given in the last Annual Report of
the Fiscal Representative (fiscal year 1935-36).






HAITI: REPORT. OF FISCAL REPRESENTATIVE


at '- Service of Payments
SThe Service of Payments is the general accounting and disbursing office
of the government. The present up-to-date office with its manifold duties
Evolved from the organization originally built up under the Receivership,
and which was modernized and improved continually over a period of many
e years. It first became known as the "Service of Payments" in 1931, and
by the Agreement of August 7, 1933, the duties of the office were defi-
Snitively fixed and limited to its present functions which consist essentially
Sof effecting the payment of government funds, accounting for government
receipts and disbursements, auditing, and compiling statistics and reports
covering government finances.
In the Service of Payments the government has an accounting office
equipped to handle capably all the functions, of government accounting it
may reasonably be expected to perform. It has a trained and experienced
personnel. Modern bookkeeping methods are followed. Mechanical aids
to bookkeeping are extensively employed. The Service uses automatic
addressing and check-writing machines, check-protecting and check-signing
machines, calculating machines and other modern apparatus to facilitate
and simplify government accounting.
Auditing and accounting of government receipts and disbursements are
governed by the Public Accounting Law enacted each year with the annual
budget. This law, which is the organic act of the Republic so far as con-
cerns the administration of government finances, gives clear and precise
instructions regarding all important matters having to do with government
accounting, such as the budget, supplementary and extraordinary appro-
priations, government receipts, the incurring and liquidation of expenses,
justifying documents, reports, advances subject to future justification, and
general auditing. In all these matters, the work of the Service of Payments
is governed and regulated by the provisions of the Public Accounting Law.
The Government is fortunate in having a single concise but complete
law giving all the essential regulations needed for the uniform and proper
accounting of public funds. The Service of Payments in turn has fixed and
clear-cut legal authority covering its duties and responsibilities, and the
need for administrative decision or recourse to precedents is reduced to a
minimum.
Vouchers covering all payments of government funds are received,
audited and recorded by. the Service of Payments. If a voucher is sup-
ported by documents in proper form, and if the payment is in conformity
with the provisions of the Public Accounting Law and if chargeable to an
appropriation permitting such expe'ndfture and containing sufficient funds
to,.cover payment, a treasury check is prepared and forwarded to the
competent disbursing officer for signature.