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


ANNUAL REPORT
OF THE

FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER 1937- SEPTEMBER 1938
,, = I








HAITI


ANNUAL REPORT


OF THE


FISCAL REPRESENTATIVE


FOR THE FISCAL YEAR

OCTOBER, 1937 SEPTEMBER, 1938



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







CONTENTS

Pages
Foreign Commerce. .............................................................................................. 5
Origin of Imports .................................................................................... ..... 6
Destination of Exports.................................................. ................................ 9
Balance of Trade.................................. ................ ......................................... 12
Ports of Entry for Imports................................................ ............................. 14
Ports of Shipment for Exports........................................... ......................... 15
Shipping ............................................................. .......................................... 17
Tourist Trade .............................................................................................. 22
Foreign Commerce by M onths............................................. ........................... 23
Commodities Imported ................................................... .............................. 26
Commodities Exported .................................................. ............................. 32
Coffee ................................................................ .................................... 33
Cotton ........................................................................ ...................... 38
Sugar ............................................................. ...................................... 39
Sisal ................................................................ ..................................... 41
Bananas ..................................................................................................; 42
Other Exports ..................................................... ................................ 45
Survey of Agricultural Resources....................................... .......................... 47
Commercial Conventions ...................................................... .......................... 51
Tariff M modifications ....................................................... .............................. 55
Customs Administration .................................................... .......................... 59
Internal Revenue Inspection Service......................................... .................... 60
Government Revenues ......................................................................................... 60
S Total Revenues ...... ...................................................... ............. ...... 60
Customs Receipts ............................................................................... 63
Internal Revenue Receipts ................................................. .................... 64
M miscellaneous Receipts ............................................................................... 71
Receipts from Communes............................................. .......................... 72
Goirernment Expenditures .................................................................................... 72
Public W orks Program .................................................. ....................... 76
Customs Service ....................................................... ............................ 78
Internal Revenue Service........................................... ........................... 71
Treasury Position ......................................................... .................................... 82
Public Debt ....................................................................................................... 84
Service of Payments.............................. ............................... ............................ 90
Supplies .............................................. ........................................................... 90
The Budget and Financial Legislation.................................... ..................... 91
Banking and Credit.............................................................................................. 99
Currency .................... ............................. ..................................................... 100
Claims ............................................................................................................. 100
Personnel ........................................................................................................ 101
Conclusion ....... ................................................................................................... 102
Tables ................ ........... .... ............... ................................... 107
Annex: Report of the Inspector General, Internal Revenue Inspection Service.... 147
Expenditures .............................................................................................. 149
Personnel .......................................................................................... 150
Internal Revenue Receipts............................................................................ 150
Conclusion .................................................................................................... 155
Tables ..................................................................................................... 157
Appendix: Schedules ............................................................................................ 163






IV STATISTICAL EXHIBITS
TABLES Pages
1. Value of Imports and Exports, and Excess of Imports or Exports, fiscal
years 1916-17 to 1937-38 ...................................................................... 109
2. Value of Imports showing countries of origin in percentages, fiscal Years
1916-17 to 1937-38 ................................................................................ 109
3. Value of Exports showing countries of destination in percentages, fiscal
years 1916-17 to 1937-38...................................................................... 110
4. Value of Total Foreign Commerce by countries in percentages, fiscal years
1916-17 to 1937-38................................................................................ 110
5. Value and Percentages of Value of Imports, Exports and Total Foreign
Commerce by countries, fiscal year 1937-38............................ ....... ... 111
6. Value of Imports by Ports of Entry, fiscal years 1916-17 to 1937-38........ 112
7. Value of Exports by Ports of Shipment, fiscal years 1916-17 to 1937-38.... 112
8. Value and Percentage of Value of Imports, Exports and total foreign com-
merce by ports, fiscal year 1938............................................................ 112
9. Net tonnage of Steam and Motor Vessels in Foreign Commerce Entered
by Registry and Months, fiscal year 1937-38....................................... 113
10. Net Tonnage of Sailing Vessels in Foreign Commerce Entered by Registry
and Months, fiscal year 1937-38............................................................ 114
11. Value of Imports by Registry of Carrying Vessels, fiscal year 1937-38........ 115
12. Value of Exports by Registry of Carrying Vessels; fiscal year 1937-38.... 116
13. Value of Imports by Months and Ports of Entry, fiscal year 1937-38
compared with 1936-37.......................................................................... 117
14. Value of Exports by Months and Ports of Shipment, fiscal year 1937-38 !
compared with 1936-37.......................................................................... 118
15. Value of Imports by Commodities, fiscal years 1916-17 to 1937-38............ 119
16. Quantity of Imports by Commodities, fiscal years 1916-17 to 1937-38.... 120
17. Value of Exports by Commodities, fiscal years 1916-17 to 1937-38............ 121
18. Quantity of Exports by Commodities, fiscal years 1916-17 to 1937-38.... 121
19. QuantitY and Value of Five Principal Exports by ports, fiscal year 1937-38
compared with 1936-37............................................................................... 122
20. Percentages of Value of Exports by Commodities, fiscal years 1916-17 to
1937-38 .................................................................................................... 123
21. Quantity and Value of Exports by Commodities and Months, fiscal year
1937-38 .................................................................................................. 124
22. Operating Fund of the Fiscal Representative, fiscal years 1916-17 to
1937-38 .................................................................................................... 125
23. Expenses of Fiscal Representative, fiscal years 1916-17 to 1937-38........ 125
24. Classification of Total Expenditures of the Fiscal Representative, fiscal
year 1937-38.............................. ........................... ........................ 126
25. Classification of Administration and Operation Expenditures of the Fiscal
Representative, fiscal Year 1937-38....................................................... 126
26. Distribution of Expenditures from the Operating Fund of the Fiscal Repre-
sentative, fiscal year 1937-38............................................ ................ 127
27. Cost of Customs Operations by Ports and Cost of Administration, Repairs
and Maintenance, Acquisition of Property, and Fixed Charges, fiscal year
19 7-38 .............................................................................................. ... 128
28. Total Cost of Collecting each Gourde of Customs Receipts, fiscal years
1919 -20 to 1937-38................................................................................... 129
29. Operating Allowance of Internal Revenue Service, fiscal years 1923-24
to 1937-38 ................................................................................................ 129
30. Revenues of Haiti by Sources, fiscal years 1889-90 to 1937-38............... 130
31. Relation between Import and Export Values and Customs Receipts, fiscal
years 1916-17 to 1937-38...................................................................... 131






STATISTICAL EXHIBITS


Pages
32. Customs Receipts by Months, fiscal years 1916-17 to 1937-38............... 131
33. Customs Receipts by Ports, fiscal years 1916-17 to 1937-38................... 132
34. Customs Receipts by Sources and Ports, fiscal year 1937-38................... 132
35. Customs Receipts by Sources and by Months, fiscal year 1937-38............ 133
36. Distribution of Customs Receipts, fiscal years 1916-17 to 1937-38............ 133
37. Miscellaneous Receipts by Sources and Months, and Ports, fiscal year
1937-38 .................................................................................................. 134
38. Total Receipts of Haitian Government by Sources, Months and Ports,
fiscal year 1937-38.................................................................................. 135
39. Ordinary, Supplementary and Extraordinary Appropriations from Revenue,
Fiscal years 19434-35 to 1937-38.............................................................. 136
40. Revenues and Expenditures, fiscal years 1934-35 to 1937-38................... 137
41. Functional Classification of Expenditures, fiscal year 1937-38............... 138
42. Classification of Total Expenditures by Departments and Services, fiscal
year 1937-38 ...............:...................................................................... 139
43. Classification of Administration and Operation Expenditures by Depart-
ments and Services, fiscal year 1937-38............................................... 140
44. Reimbursements to Appropriations, fiscal Years 1933-34 to 1937-38........ 141
45. Receipts and Expenditures, fiscal year 1937-38....................................... 142
46. Revenues and Expenditures and Excess of Revenues or Expenditures, fiscal
years 1916-17 to 1937-38.................................................................... 143
47. Treasury Assets and Liabilities................................................................. 143
48. Public D ebt ............................................................................................. 144
49. Expenditures from Revenue for the Public Debt and Relation of such
Expenditures to Revenue Receipts, fiscal years 1936-37 to 1937-38.... 144
50. Profit and Loss Statement, Bureau of Supplies, fiscal year 1937-38........ 145
51. Balance Sheet, Bureau of Supplies.............................................................. 145
52. Notes of the Banque Nationale in Circulation, by Months, fiscal years
1919-20 to 1937-38 ................................................................................. 146
53. Loans and Deposits of Banks in Haiti by Months, fiscal year 1937-38....... 146
CHARTS
1. Value of Total Imports and Total Exports, by Months, fiscal year 1930-31
to 1937-38 .................................................................... ...................... 23
2. Quantities of Leading Commodities Exported and Imported, fiscal years
1916-17 to 1937-38............................................... ........................ 29
3. Average Coffee Prices, F. O. B. Haitian ports, fiscal years 1916-17 to
1937-38 .................................................................. 35
4. Quantities of Bananas Exported, by Months, fiscal years 1931-32 to
1937-38 ............................................................................................... 43
6. Total Revenue Receipts of Haiti and Expenditures from Revenues, fiscal
years 1916-17 to 1937-38.................................................................... 61
ANNEX: INTERNAL REVENUE SERVICE
TABLES
1. Internal Revenue Receipts by Sources, fiscal years 1935-36 to 1937-38.... 159
2. Internal Revenue Receipts by Collection Prefectures, fiscal years 1935-36
to 1937-38 ................................................................................................ 160
3. Internal Revenue Receipts by Sources and Prefectures, fiscal year 1937-38 161
4. Internal Revenue Receipts by Sources and Months, fiscal year 1937-38.... 162
APPENDIX: SCHEDULES
1. Quantity and Value of Imports into Haiti by Countries of Origin............... 165
2. Quantity and Value of Exports from Haiti by Countries of Destination.... 195
3. Customs Receipts by Sources, by Ports and by Months, fiscal year 1937-38 204




















HAITI
ANNUAL REPORT OF THE FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR
OCTOBER, 1937 SEPTEMBER, 1938









HAITI
ANNUAL REPORT OF THE FISCAL REPRESENTATIVE
FOR THE FISCAL YEAR

OCTOBER 1937- SEPTEMBER 1938

OFFICE OF THE FISCAL REPRESENTATIVE
Port-au-Prince, Haiti, December 15, 1938.

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-second annual report
on. the commerce and finances of the Republic of Haiti. The report covers
the fiscal year ending September 30, 1938, 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.
Government revenues for the fiscal year amounted to Gdes. 28,109,488.87.
Revenues were Gdes. 6,339,182.32 lower than they were in the previous
year. Government expenditures from revenues during the fiscal year were
Gdes. 28,940,782.51, or Gdes. 6,092,654.50 lower than expenditures from
revenues in 1936-37.
The fiscal year 1937-38 was the second successive year in which Haiti's
coffee crop has been below its normal level. The quantity of coffee
exported during the fiscal year only slightly exceeded the quantity exported
in the previous fiscal year. The coffee crop in each of the past two years
has been approximately 25,000,000 kilos. An average coffee crop for Haiti
has been about 32,000,000 kilos.
In addition to a small coffee harvest, coffee values on world markets were
disastrouslylow. The total value of coffee exported for 1937-38 was 26
per cent below the value of the 1936-37 exports even though coffee prices
in that year were below average. Brazil abandoned its valorization plan
for sustaining world prices of coffee in November 1937. The result was, first,
a collapse in prices to a point where for some weeks there was no market
for coffee at all; this was followed by slow cautious buying of current
requirements at a price that represented a new low level for world markets.

1





HAITI: REPORT OF FISCAL REPRESENTATIVE


From this low price range there was no substantial recovery during the
fiscal year. With Brazil's change in policy, prices dropped to a point where
coffee exporters from Haiti could not pay the export duties then in effect on
coffee and still profitably ship coffee. Under these circumstances it was
necessary for the government to make drastic sacrifices in one of its most
important sources of revenue. Two successive reductions in coffee duties
brought duties to about one half of the former rates. In normal years
revenues from export duties on coffee have averaged over Gdes. 10,000,000.
During the fiscal year under review revenue derived from coffee duties
amounted to .Gdes. 4,471,945.
During the previous fiscal year, despite the poor coffee crop, latent
purchasing power had sustained imports at a level unusually high for a
small crop year. The purchasing power which manifested itself during the
fiscal year 1936-37 can be accredited to the excess of exports over imports
in 1935-36. The excess of exports over imports in that year had been Gdes.
9,317,968. This accumulated purchasing power was not sufficient, however,
to sustain importations at a normal level throughout two successive years
of low coffee crops, more particularly when the second of the two years
was a year in which prices dropped lower than they have been in several
decades. The decrease from the total value of imports in the preceding year
was 17.6 per cent.
Low world commodity ,prices also affected Haitian export products other
than coffee. Cotton is Haiti's second crop in importance. Exports of cotton
decreased in quantity due to the boll weevil; but the low price of cotton
was a greater factor in reducing the value of cotton exports. The quantity
of cotton exported decreased by 13 per cent while the value decreased by
31 per cent. Banana exports held the level they had attained and even
gained slightly in value and quantity over the preceding year. A drought
of long duration in the northern plain where large areas were planted to
bananas on unirrigated land kept banana exports from showing a greater
increase. Sugar prices fell during the year. Logwood and cacao prices also
declined.
SThe estimate of ways and means at the beginning of the fiscal year
predicted revenues of Gdes. 32,936,000. At that time this estimate appeared
to be conservative. Revenues in the preceding year had exceeded Gdes.
34,000,000 and crop prospects at the beginning of the year appeared to be
excellent. The collapse in coffee price in November brought about a sudden
change in the prospects for a good year in business. Decreased revenues in
November and December left little doubt that revenues would fail to reach
estimates by four or possibly five million gourdes. Retrenchment in ex-
penditures and measures to increase revenues or check their declines were
both imperative.
To increase customs revenues the surtax on import duties was increased
from 10 per cent to 20 per cent. Furthermore an upward revision affecting





HAITI: REPORT OF FISCAL REPRESENTATIVE


many imported articles was made. Duties were increased on soap, kerosene,
lumber, cement, manufactured articles of iron and steel, fish, and a large
number of imported commodities of lesser importance.
To increase internal revenues several classifications of revenue formerly
left to the communes were taken over and collected as government revenues.
The laws governing the irrigation taxes, salt tax, and vital statistics fees
were revised.
Coincident with these measures to increase revenues a new budget de-
creasing authorized expenditures was put into effect. The new budget
reduced ordinary appropriations for the Departments of Finance,Commerce.
Interior, Public Works and Justice. The Department of Labor was dis-
continued and its functions transferred in part to the Department of Public
Instruction and in part to a reorganized Department now known as the
Department of Agriculture and Labor. The Registry Office was attached
to the Internal Revenue Service and the appropriation for its separate
maintenance discontinued. Economies in operation were requested of all
departments and services. Personnel was reduced, and salary decreases
were put into effect for all government employees at one time or another
during the fiscal year. Extraordinary appropriations were limited to those
cases of most urgent need.
The foregoing measures to effect economies and increase revenues were
in themselves insufficient to balance receipts and expenditures, and 'still
service the public debt in the full amounts provided in the loan contracts,
without curtailing essential government functions. Negotiations were ac-
cordingly opened for a temporary reduction in amortization payments on
the public debt. The public debt at the end of the fiscal year 1936-37 had
stood at Gdes. 44,317,295.95. This was only about one third of the amount
it had been in 1924 and one half of what it had been less than ten years ago.
Amortization payments in excess of contractual requirements in the early
years after negotiation of the 1922 loans, and the practice followed of
placing funds in the hands of the fiscal agent for the purchase of bonds for
amortization before the contract dates for purchase, and applying the inter-
est derived from the funds in the hands of the fiscal agent to additional
bond purchases had greatly aided in placing Haiti so far ahead of scheduled
payments that although the Series A bonds were to mature in 1952, and
Series C bonds in 1953, payment of the amounts provided in the contract
schedules would have retired all of the bonds by about 1944. Series B loan
had already been retired.
An Accord was reached, after consultation with the bondholders' re-
presentatives, between the two governments and signed January 13, 1938.
It was agreed therein that during the period from January 1, 1938 to
September 30, 1938, the amounts necessary for payments in execution of
the Loan Contracts should consist of the amounts necessary to pay the
interest on all outstanding bonds issued under the Loan Contracts of





HAITI: REPORT OF FISCAL REPRESENTATIVE


October 6, 1922 and May 26, 1925, and Gdes. 100,000 for the amortization
of .the bonds.
The full amortization payments stipulated in the original schedules of
the loan contracts had been made during the October 1937 December 1937
period. Amortization payments from January 1, 1938 to September 30,
1938 were made in conformity with the Accord of January 13, 1938. On
July 1, 1938, by agreement between the two governments, the period of
reduced amortization payments was extended to September 30, 1939.
The measures taken to reduce expenditures and to increase revenues
resulted in the completion of the fiscal year with a deficit of but Gdes.
831,293.64, although government revenues had declined by Gourdes
6,339,182.32 from revenues in the previous fiscal year.
At September 30, 1938 the gross public debt was Gdes. 43,950,094.29 as
compared with Gdes. 44,317,295.95 at September 30, 1937.
With the immediate object of alleviating the unemployment caused by
business stagnation following the drop in coffee and other commodity prices,
and with the longer range objective of providing Haiti with greater fa-
cilities for increasing production, the government during the year, entered
into a contract with The J. G. White Engineering Corporation for the
execution of a program of productive public works to be carried out over
a period of three to four years. Public works such as improvement in
roads and trails, construction of bridges, irrigation and drainage works,
extension of municipal water supply systems, and similar projects will be
undertaken. The contract was signed and published together with the
sanctioning decree-law in the official Moniteur of July 7, 1938. Work on a
number of projects was well under way by the end of the fiscal year and
several of the smaller projects already have been completed.
The Government has carried forward its coffee improvement program
vigorously throughout the year. The building of concrete drying platforms
in the coffee producing regions has been continued. Several thousand coffee
drying trays have been manufactured and distributed. These measures have
resulted in a decided improvement in preparation of Haitian coffee.
During the year the services of an expert in coffee production and pre-
paration were secured by the government to make a survey of the coffee
regions of Haiti and to advise the coffee industry generally, on better
methods of preparing coffee for export. Preparation of coffee by the
washing method has been encouraged. The amount of washed coffee shipped
has increased strikingly during the past year and will be further increased
when several new factories which are now being built start functioning.
Better preparation of Haiti's quality coffee has won and retained a place
in the American market which assures Haiti of an outlet for all of the
quality coffee which can be properly prepared even though Haiti increase
its production many times over.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Foreign Commerce
From Gdes. 90,930,110 in 1936-1937, the foreign commerce of Haiti
dropped in value to Gdes. 72,705,841 in 1937-1938, a decrease of Gdes.
18,224,000, or 20 per cent. This is the lowest figure recorded since statistics
of foreign commerce under the present system were compiled in 1916-1917.
The only year which compares with it was the mid-depression year 1931-
1932, when foreign commerce values fell to Gdes. 73,411,945.
The gradual upward trend in value of Haiti's foreign commerce recorded
during the three previous fiscal years ended abruptly due to the drop in
world prices of Haiti's principal export crops, and the sequential curtailment
of Haiti's purchasing power. As compared with the previous fiscal year,
coffee exports were up one per cent in quantity, and down 26 per cent in
value. Exports of cacao were up nine per cent in quantity, and 31 per cent
lower in value. Sisal exports increased by 17 per cent in quantity, and
dropped 15 per cent in value. Shipments of raw sugar recorded an increase
in quantity of seven per cent, and a decrease in value of four per cent.
While there was a decrease of 13 per cent in the quantity of cotton exported,
the decrease in value amounted to 31 per cent. Consequently, as the pur-
chasing power of Haiti is determined by the value of its exports, the value
of imports dropped from Gdes. 46,075,660, in 1936-1937, to Gdes. 37,973,889,
in the year under review.
The decrease in import values was further accentuated by the fact that
Haiti had an unfavorable trade balance of Gdes. 1,221,210 in the year 1936-
1937, and consequently no substantial carry over of purchasing power which
otherwise might have been reflected in the import statistics of 1937-1938.
That imports declined under the circumstances was to be expected. What
may be considered remarkable is that the decline was so small, amounting
to only 17.58 per cent.
The entry of Brazilian coffees into unrestricted price competition with
other coffees, coupled with the poor coffee crop in 1936-1937, and 1937-
1938, had a temporarily disastrous effect on Haitian foreign trade. Although
increased production of other export products during the last few years had
diminished to an appreciable extent ihe relative importance of coffee, it is
still Haiti's most important crop, and fluctuations in its size or value are
always sharply reflected in the total value of Haitian foreign commerce.
Coming as it did, at the beginning of the fiscal year, at the beginning
of the coffee harvest, and on the heels of the small coffee crop of 1936-
1937, the drop in coffee prices had a paralyzing effect on the economic life
of Haiti, and brought about a complete reversal of the business trend.
The volume of the import trade was not immediately affected, due to
orders placed before the fall in coffee prices. However, imports started
to decline in January and diminished throughout the fiscal year to a level
that made the value of Haitian foreign commerce the lowest on record.





HAITI: REPORT OF FISCAL REPRESENTATIVE


The United States again took the lead over other countries, as a parti-
cipant in Haitian foreign trade. Imports from the United States were
valued at Gdes. 20,627,627, and exports to the United States at Gdes.
14,860,616, the total, Gdes. 35,488,243 representing 48.80 per cent of Hai-
tian foreign commerce for 1937-1938. The United Kingdom took second
place with 14.58 per cent of the total foreign commerce, valued at Gdes.
10,600,037. Of this amount, Gdes. 5,879,615 represented imports, and
Gdes. 4,720,422, exports. Trade with Belgium, which took third place,
was valued at Gdes. 5,420,037 which was 7.45 per cent of total trade.
Imports accounted for Gdes. 1,090,291 of this amount, and exports Gdes.
4,329,746. France yielded third place to Belgium, for 1937-1938, with
7.28 per cent, valued at Gdes. 5,271,515. The imports from France were
valued at Gdes. 1,260,719, and exports to that country at Gdes. 4,010,796.
In 1936-1937, the American share of Haiti's foreign trade was 39.56 per
cent, followed by the United Kingdom with 16.98 per cent and by France
with 9.27 per cent.
The steadily growing importance of the American position in Haitian
foreign trade is accounted for largely by increased exports of Haitian pro-
ducts to the United States. In 1933-1934, the United States purchased
217,949 kilos of Haitian coffee valued at Gdes. 248,453. In 1937-1938,
exports of coffee to the United States amounted to 8,855,473 kilos, valued
at Gdes. 6,077,349. The American share of Haiti's banana trade in 1933-
1934 amounted to Gdes. 320,561. In 1937-1938, bananas valued at Gdes.
2,001,128, were exported to the United States. Sales of raw sugar and sisal
to that country have also substantially increased, both in volume and in
value, during the past few years.
Trade between Haiti and France continued to decline, the French share
of total trade dropping from 9.27 per cent in 1936-1937, to 7.28 per cent in
the year under review. While the participation of France in total Haitian
trade for the year reached the lowest point on record, a noticeable im-
provement occurred in the last two months of 1937-1938, a result of the
Franco-Haitian Commercial Convention which went into effect July 11,
1938.

Origin of Imports

The United States in 1937-1938, furnished 54.31 per cent of total imports
and maintained its position as the most important supplier of import com-
modities. Next in order of importance was the United Kingdom which
furnished 15.48 per cent of total imports. Germany was in third place, with
6.43 per cent, followed closely by Japan which supplied 5.32 per cent of
total imports. These four countries furnished 81.54 per cent of Haitian
imports, the balance, 18.46 per cent being supplied by 70 countries, only
five of which furnished over one per cent of the total. These five countries





HAITI: REPORT OF FISCAL REPRESENTATIVE


were France, (3.32 per cent) Belgium, (2.87 per cent) Canada, (2.39 per
cent), the Netherlands, (1.67 per cent) and Curacao, (1.51 per cent).
While the American share of imports increased from 50.98 per cent in
1936-1937, to 54.31 per cent in 1937-1938, the value of American sales to
Haiti declined from Gdes. 23,491,902, in 1936-1937, to Gdes. 20,627,627,
during the year under review. This decline in the value of import com-
modities from the United States was a natural concomitant of the decline
in total imports, and may be attributed to no other factor.
There were no abrupt changes in the direction of the import trade. The
relative positions of the countries from which Haiti purchases the greater
part of its imports remained unchanged from last year, with the exception
that France regained from Belgium its position as fifth in importance.
The British share of the import trade showed a slight decline from the
17.81 per cent recorded in 1936-1937. However, Britain participated to the
extent of 15.48 per cent in 1937-1938, a considerable increase over the
average of 8.69 per cent enjoyed during the ten years previous to 1936-1937.
Imports of the more important categories of cotton goods from the United
Kingdom declined in value from Gdes. 5,761,695 in 1936-1937 to Gdes.
3,166,917 in 1937-1938, or by 45 per cent. Total imports of cotton goods
declined for the period by only 22.8 per cent. British sales of soap to Haiti
increased from Gdes. 1,315,588, during the previous year, to Gdes. 1,411,444,
in 1937-1938. Imports of British agricultural machinery and implements
declined by Gdes. 33,153 or by 14 per cent from the 1936-1937 figure of
Gdes. 234,353. Imports of thread froin the United Kingdom were valued
at Gdes. 420,912 during 1937-1938, as compared with purchases of this com-
modity, valued at Gdes. 478,803, during 1936-1937.
Purchases from the British Commonwealth showed only a slight pro-
portional decline. In 1936-1937, the British Empire sold to Haiti 20.67 per
cent of its total imports, whereas in 1937-1938, the corresponding figure was
19.01 per cent, a decline of 8 per cent. However, in 1936-1937, purchases
of import commodities from the British Empire were valued at Gdes.
9,529,105. During 1937-1938, the, value dropped to Gdes. 7,216,251, a de-
crease of 24.27 per cent.
The decline in the import trade as a whole was also reflected in imports
from Germany. Sales to Haiti by that country declined in value from Gdes.
3,249,615 in 1936-1937 to Gdes. 2,441,699 in 1937-1938. Germany's share
of total imports was 7.05 per cent in 1936-1937, and only 6.43 per cent in
the fiscal year 1937-1938.
In value, imports of cement from Germany fell from Gdes. 459,282 in
1936-1937, to Gdes. 280,322, in 1937-1938. Imports of cotton piece goods
of German origin dropped in value from Gdes. 235,886, during the last
fiscal year, to Gdes. 94,367 in the year under review: belts and hosiery
imports declined in value from Gdes. 103,196 to 36,621; jute bags showed a
decline of Gdes. 66,575; imports of- cutlery declined in value from Gdes.





HAITI: REPORT OF FISCAL REPRESENTATIVE


142,799 to Gdes. 70,137, and imports of enamelled householdware registered
a drop in value of Gdes. 132,913 when comparison is made with the previous
fiscal year. Small gains were recorded in imports of miscellaneous chemical
and pharmaceutical products, manufactures of earthenware, porcelain and
clay, hats and caps, and electrical machinery, apparatus and appliances.
As has been the case for the last three years, imports from Japan con-
sisted principally of the cheaper grades of cotton piece goods, valued at
Gdes. 1,785,191. Other imports of lesser importance were knit goods,
porcelain, pottery, hosiery and clothing. Total sales by Japan to Haiti
amounted to Gdes. 2,021,739; slightly over a million gourdes less than the
value of imports from that country in 1936-1937.
Imports from Belgium fell off in value from ,Gdes. 1,270,961 in 1936-
1937, to Gdes. 1,090,291 in 1937-1938. There were no striking declines in
any of the categories of goods usually purchased by Haiti from that
country.
France was one of the few countries which increased their sales to Haiti
during this year of a general decline. French merchandise, valued at Gdes.
1,260,719, entered Haiti during 1937-1938. The figure for 1936-1937 was
Gdes. 1,121,078.
During more than half of the fiscal year 1936-37, imports from France
were subject to the Haitian maximum tariff. During 1937-1938, the mini-
mum tariff was applied to French merchandise and preferential rates were
granted from July 11, 1938. This, of course, explains why the value of
merchandise from France increased instead of declining as did imports
from most countries during the year.
There was a general decline in imports from the United States in the most
important categories of merchandise imported, with a few exceptions. The
value of cotton piece goods imported increased from Gdes. 4,937,444 in
1936-1937 to Gdes. 5,135,821 in 1937-1938. For the same period, imports.
of cement increased from Gdes. 7,219 to Gdes. 30,467. Miscellaneous chem-
ical and pharmaceutical products increased in value from Gdes. 225,868
to Gdes. 280,920. Miscellaneous manufactures of iron and steel increased
from Gdes. 374,366 to Gdes. 515,257. Machinery and apparatus other than
electrical increased from Gdes. 762,710 to Gdes. 933,017, and pneumatic
tires and tubes for vehicles increased from Gdes. 294,533 to Gdes. 296,024.
Curacao was first in importance as a source of supply for gasoline, with
imports valued at Gdes. 343,416. Puerto-Rico took second place, having
furnished during the year gasoline valued at Gdes. 214,577. Imports of that
commodity from the United States were valued at Gdes. 193,444.
The United States furnished by far the greatest part of the kerosine
purchased by Haiti. Imports of kerosine from that country were valued at
Gdes. 601,456 in 1937-1938. The United States was the most important
supplier of lard, with shipments valued at Gdes. 350,952. Flour valued at





HAITI: REPORT OF FISCAL REPRESENTATIVE


Gdes. 2,713,627 came from that country. Imports of this commodity from
other countries were insignificant, with the exception of Canada which
furnished flour valued at Gdes. 58,870.
Most of the pickled and smoked fish came from Canada, as did the
dried and salted fish. Imports of these commodities from there were valued
at Gdes. 474,098 and Gdes. 293,692 respectively.
In 1937-1938, the Netherlands sold to Haiti the greater part of the rice
imported, valued at Gdes. 267,931. The second country of importance in
sales of rice to Haiti was British Guiana, with imports valued at Gdes.
19,805.
Imports of wine valued at Gdes. 108,311 came from France. Of lesser
importance were the imports of this commodity from Italy, valued at Gdes.
21,174.
Imports of perfumery, cosmetics and miscellaneous toilet preparations
valued at Gdes. 228,024 were received from the United States which for
two years has been the largest furnisher of this class of merchandise to
Haiti. France followed the United States with imports valued at Gdes.
173,161.
Destination of Exports
In order of relative importance, the countries purchasing Haiti's products
during the fiscal year 1937-1938, were the United States, the United King-
dom, Belgium, France, Denmark and, the Netherlands. These six markets
purchased from Haiti merchandise valued at Gdes. 30,730,741, representing
88.49 per cent of total exports from Haiti.
As was the case in 1936-1937, the United States took the predominant
place in the Haitian export trade previously occupied by France, and
maintained its position as the principal market for Haitian export products.
The value of the merchandise purchased by the United States rose from
27.82 per cent of total exports in 1936-1937, to 42.79 per cent of total
exports, in 1937-1938. American purchases of Haitian products in 1936-
1937, were valued at Gdes. 12,501,754, as compared with Gdes. 6,727,449,
in 1935-1936. In 1937-1938, the value of exports to the United States rose
to Gdes. 14,860,616. This astonishing gain is not entirely due to the open-
ing of the American market to Haitian coffee, as the records show stead-
ily mounting exports of bananas, sisal and sugar to the United States.
Haiti exported to the United States 35.07 per cent of its coffee crop,
58.33 per cent of its logwood, practically 100 per cent of its bananas (77
stems were shipped to the Bahamas), 99.98 per cent of its goatskins, 69.29
per cent of its rum, 94.23 per cent of its sisal, and 44.47 per cent of its
raw sugar, in terms of value, during the year under review.
Exports to United States possessions were negligible, amounting to only
.30 per cent of total exports, shipped to the Virgin Islands.





10 HAITI: REPORT OF FISCAL REPRESENTATIVE

Values of exports to the United States, by principal commodities, for
the last three fiscal years are shown below:
1937-1938 1936-1937 1935-1936
Gourdes Gourdes Gourdes
Coffee .................................. 6,077,349 4,091,623 619,251
Sisal ................... ............. 3,049,468 3,333,204 2,670,115
Bananas .............................. 2,001,051 1,877,323 771,669
Cacao ............................... 613,152 963,359 565,015
Goatskins ............................. 452,785 778,386 413,441
Sugar (Raw and refined)........ 1,731,866 455,779 630,960
Logwood ............................ 217,454 449,567 276,756
Molasses.............................. 596,756 392,601 570,151
Rum .................................... 25,964 68,743 121,677
All other.............................. 94,771 91,169 88,414
14,860,616 12,501,754 6,727,449

The second country of importance in the export trade, the United King-
dom, purchased Haitian products valued at Gdes. 4,720,422, representing
13.59 per cent of total export during 1937-1938. This figure was a decided
drop from the sales to British importers made in 1936-1937, which were
valued at Gdes. 7,243.690.
The United Kingdom in 1937-1938, took 44.87 per cent of raw cotton
exports, as compared with 42 per cent in 1936-1937, 85 per cent of exports
of cottonseed cake, against 75 per cent of exports of this commodity in
1936-1937, and 52.14 per cent of the raw sugar exported. In 1936-1937,
British importers purchased 86 per cent of the raw sugar exported from
Haiti.
Minor exports to the United Kingdom included beeswax, manioc flour,
honey, hoofs, bones, horn, oil of neroli, and lignum vitae.
Values of exports to the United Kingdom, by principal commodities, for
the last three fiscal years are shown below:
1937-1938 1936-1937 1935-1936
Gourdes Gourdes Gourdes
Raw cotton .............................. 2,360,817 3,354,344 3,681,655
Raw sugar ................................ 1,943,834 3,369,612 3,038,815
Cottonseed cake ........................ 352,920 472,347 381,795
All other .............................. 62,851 47,387 28,494
4,720,422 7,243,690 7,130,759

Sales to other countries of the British Empire amounted to only .33 per
cent of total exports. Canada, during the year, purchased only 0.16 per
cent of the total amount of Haitian products sold abroad, valued at Gdes.
54,319. This compares with imports from Canada, representing 2.39 per
cent of total Haitian purchases valued at Gdes. 906,003. Exports to other
parts of the British Empire consisted principally in sales of fresh fruit
and other foodstuffs to the Bahama Islands.
The value of Haitian exports to Belgium was Gdes. 4,329,476 in 1937-
1938, as compared with Gdes. 5,625,493 in 1936-1937, and Gdes. 4,741,353,
in 1935-1936, in spite of the fact that exports of coffee to that country




HAITI: REPORT OF FISCAL REPRESENTATIVE


Increased from 5,623,368 kilos in 1936-1937, to 6,226,879 kilos in 1937-1938.
However, purchases by Belgium of cottonseed cake fell to 302,296 kilos
in 1937-1938, as compared with 805,042 kilos in 1936-1937. Exports of
logwood were much smaller during the year under review than last year,
while shipments of honey to Belgium increased slightly.
Belgian purchases of Haitian commodities during each of the last two
fiscal years are shown below:
1937-1938 1936-1937
Gourdes Gourdes
Coffee ................................ 4,182,994 5,402,072
Cottonseed cake ................ 30,246 98,642
Logwood .......................... 32,264 57,633
Honey .............................. 21,772 15,171
All other............................ 62,470 51,975
4,329,746 5,625,493

The French share of the total export trade, which in 1936-1937 was
16.31 per cent fell in 1937-1938 to 11.55 per cent. During the greater part
of the year the French market was practically closed to Haitian coffee in
view of the application by France of its maximum tariff to Haitian products.
Shipments of Haitian coffee to France, therefore, declined in value from
Gdes. 4,634,804, in 1936-1937, to Gdes. 1,877,387, in 1937-1938. France took
20 per cent of the 1936-1937 crop as against 10.83 per cent of the 1937-1938
crop.
Exports of cotton to France dropped off sharply, as compared with those
of the two previous fiscal years, as only 1,895,256 kilos were shipped to that
market. In 1936-1937, France purchased 2,510,616 kilos of Haitian cotton
and in 1935-1936, sales of cotton to France amounted to 2,529,149 kilos.
French purchases of logwood and honey increased considerably in the year
under review, as compared with the last fiscal year.
French purchases of Haitian commodities during each of the last three
fiscal years are shown below:
1937-1938 1936-1937 1935-1936
Gourdes Gourdes Gourdes
Coffee ...................................... 1,877,387 4,634,804 19,560,539
Cotton ...................................... 1,982,292 2,510,616 2,529,149
Logwood .................................. 84,747 95,753 143,011
Honey ...................................... 15,133 12,665 30,525
All other ................................ 51,237 61,694 32,978
4,010,796 7,315,532 22,296,202

The export trade with Denmark was on a slightly higher level in volume
than last year, although the value of its purchases declined. In 1936-1937,
Denmark took 4.65 per cent of total exports valued at Gdes. 2,085,963.
In 1937-1938, sales to Denmark amounted to 5.35 per cent of total exports,
with a value of Gdes. 1,858,112.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Danish purchases of Haitian coffee represented 10.72 per cent of total
shipments of that commodity, and were valued at Gdes. 1,857,078. The
only other commodity sold to Denmark was a small amount of honey.
During 1937-1938, purchases of Haitian products by the Netherlands
showed a slight decrease. In 1936-1937, exports to Holland were valued
at Gdes. 957,523. In 1937-1938, the figure was Gdes. 951,076. In 1936-
1937, the Netherlands took 2.14 per cent of total exports. In 1937-1938,
2.74 per cent. Coffee was the most important item shipped to the Nether-
lands during the year. The 1,310,694 kilos of that commodity purchased
by Holland were valued at Gdes. 931,668. Other sales to Holland consisted
of small amounts of cacao, honey and sisal fiber.
Italy has ceased to be an important factor in the Haitian export trade.
Exports to that country during the year under review were valued at
Gdes. 375,563 and consisted chiefly of coffee, with smaller amounts of
logwood, orange peel, sisal fiber and rum.

Balance of Trade
During the fiscal year 1937-38 the total value of imports exceeded the
total value of exports by Gdes. 3,241,937.
Export values dropped from Gourdes 44,854,450 in 1936-37 to Gourdes
34,731,952 in 1937-38. It is not to be implied therefrom that Haiti has lost
any of its foreign markets or that there has been any appreciable diminution
in the volume of its export trade.
The balance of trade is stated in terms of value. Mention has been made,
and will be made again in this report, of the destruction of coffee values
during the year. Not only was the sales value of Haiti's coffee greatly
diminished but other products exported from Haiti also suffered from
depressed commodity prices. The sharp decrease in the figures given for
Haiti's exportation was due almost entirely to these low commodity prices.
It is true that the volume of coffee shipments has been below average during
the past two years, but the volume of the coffee crop is subject to wide
fluctuations from year to year. Exports of cotton are also decreasing.
Against this must be offset Haiti's banana trade, and the fact that sisal
exportations reached a record high. Exportation of sugar was only slightly
less than the record year 1935-36.
Reference to the chart on page 61 of this report will show that, while
in general imports follow exports, the latter fluctuate much more widely,
and it is natural in such a period as the past year has been, when the value
of Haiti's principal product-coffee-dropped overnight and the value of
other commodities on world markets also declined, that exports, expressed
in terms of value, should decline more rapidly for the period than imports.
General conclusions based upon the balance of trade for a single year
would be perhaps more misleading than informative. Particularly so, when




HAITI: REPORT OF FISCAL REPRESENTATIVE


the year under consideration happens to be as abnormal and unusual as the
past fiscal year has been in Haitian commerce. Furthermore the fiscal year
1937-38 shows results contrary to the general trend in recent years of
Haiti's foreign trade. While the unfavorable balance of trade in 1937-38
was Gdes. 3,241,937, :and in 1936-37 was Gdes. 1,221,210; if we go back
one year further we find that in 1935-36 Haiti's exports exceeded imports
in value by Gdes. 9,317,968. If we consider the period from 1921-22 to the
present year, we find an excess of exports over imports amounting to Gdes.
17,205,093 for the period. Prior to 1921-22 wide yearly fluctuations due to
the war, and to after-war conditions render comparisons of less value.
Another reason for not drawing too sweeping a conclusion from foreign
trade figures is the fact that they are limited to the value of commodities
imported and exported. No attempt is made to include invisible items. New
capital coming into the country and tourist trade, both important, cannot
be directly included in the figures.
Considering only the value of Haitian products exchanged for the mer-
chandise of foreign countries, Haiti, over a period of nearly twenty years
has had a favorable balance of trade. And this should be so, since Haiti
has a foreign dollar debt requiring annually the export of over one and one-
third million dollars.
Haiti's favorable balance of trade over the period mentioned above was
not brought about by quota restrictions, exchange control, or other barriers
to the free flow of trade. Haiti's solution to the problem of a temporarily
adverse trade balance lies in producing larger quantities of those products
which people in foreign countries demand and for which markets are open.
Too large a proportion of Haiti's foreign purchases are in the class of
consumer goods which add nothing to the wealth of Haiti, nor aid in any
way in its development. A striking example is the proportion of Haiti's
income spent abroad for food. In 1937-38, foodstuffs amounted in
terms of value, to 17.1 per cent of total imports. In the effort to obtain a
balanced economy, a higher standard of living for its population, and to
develop its natural resources, a relatively larger part of Haiti's income
might well be applied to the purchase abroad of capital goods, to be utilized
in the increase of production, the better preparation of export products,
lowering of transportation costs, and in general in building up the wealth
of Haiti.
An effort should be made during the coming years to increase domestic
production of foodstuffs, thereby decreasing the necessity of foreign pur-
chases of this and other classes of consumer merchandise. This can be done
without disturbing in any way Haiti's existing commercial relations. The
countries which now furnish the non-producing consumer goods can sell
instead to Haiti, the machinery, tools, building materials and fuels, so
necessary to its development and progress.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Ports of Entry for Imports
During the year under study 75.44 per cent of all imports were entered
at Port-au-Prince. In 1936-1937, Port-au-Prince handled 73.07 per cent
of the import trade.
Imports at Port-au-Prince for the year 1937-1938, were valued at Gdes.
28,649,575 as compared with entries valued at Gdes. 33,661,677 in 1936-1937.
The decline was Gdes. 5,012,102 or 14.89 per cent. The total decline in the
import trade was 17.58 per cent.
The tendency toward concentration of imports at Port-au-Prince seems
to have stabilized during the past four years at about 74 per cent of the
total import trade. Altho a greater flow of imports through Port-au-Prince
would be economically desirable, and beneficial to the country as a whole,
it is doubted that the present percentage will be exceeded for sometime to
come. This surmise is based on the fact that Haiti has eleven other open
seaports, and it is inevitable that a certain amount of imports will be
consigned directly to them. This is particularly true in the case of flour,
rice and other more or less perishable merchandise, which the Haitian coast-
wise vessels are not equipped to handle economically and on which land
transportation is relatively high in cost.
Cap-Haitien came second in importance as a port of entry for merchan-
dise. Imports were valued at Gdes. 2,994.654 in 1937-1938, compared with
Gdes. 3,893,393 in 1936-1937. The decline was Gdes. 898,739, or 23.08 per
cent. Of total imports, 7.89 per cent were credited to Cap-Haitien.
The third port of importance in the import trade was Cayes, whose share
of the total import trade was 4.69 per cent. Imports at Cayes were Gdes.
679,017 lower in value during 1937-1938, than they were in 1936-1937, when
imports were valued at Gdes. 2,458,151. The decline from the preceding
year in the value of merchandise imported through Cayes was 27.62 per
cent.
Next in importance was Gonaives, with 3.10 per cent of total imports,
followed by Saint-Marc with a percentage of 2.24. Merchandise valued at
Gdes 1,409,870 was imported at Gonaives during 1936-1937. In 1937-1938,
the value was Gdes. 1,178,769. The decline in value in 1936-1937, was Gdes.
231,101, or 16.39 per cent. Saint-Marc registered a decline of 35.53 per cent
in the value of its imports when a comparison-was made between the years
1936-1937, and 1937-1938. Imports dropped from a value of Gdes. 1,319,730
in 1936-1937, to Gdes. 850,787, in 1937-1938.
The general trend of decreased import values was observed at all the
other sea ports of Haiti. When a comparison was made between the years
1936-1937 and 1937-1938, it was found that imports at Aquin declined in
value by 9.92 per cent; at Fort-Libert6 by 38.21 per cent; at Jacmel by
26.06 per cent; at J6rimie by 19.17 per cent; at Miragoane by 39.56 per
cent; at Port-de-Paix by 16.77 per cent, and at Petit-Goave by 38.40 per
cent.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Ports of Shipment for Exports

Export activity, measured by volume, at the various ports of Haiti during
1937-1938 was, in general, on a slightly higher level than in 1936-1937. In
terms of value, however, exports declined by 22.57 per cent from the 1936-
1937 level.
The decrease in export values affected all the ports without exception.
Among the seaports, J6remie recorded the greatest decrease, 52.37 per
cent. Cayes was next in line with a decrease in export values of 41.00 per
cent. The port least affected was Port-de-Paix where the decrease was
only .003 per cent.
Although values at Port-de-Paix remained nearly stationary, exports of
coffee almost doubled in quantity. Coffee is the principal export crop
at Port-de-Paix. At Port-au-Prince, where export values declined by
9.84 per cent from those of the previous fiscal year, exports of coffee in-
creased from 6,398,788 kilos in 1936-1937 to 7,011,192 kilos in 1937-1938;
exports of cotton from 1,826,384 kilos to 2,320,074 kilos; exports of sisal
from 188,256 kilos to 251,251 kilos; exports of sugar from 32,405,031 kilos
to 34,388,671 kilos and exports of bananas from 95,212 stems to 182,034
stems.
With the exception of cotton, production of all the major export crops
increased. Yet income from these crops decreased.
Export values at Cap-Haitien declined by Gdes. 765,293 or 20.98 per
cent. At Jacmel exports dropped in value by Gdes. 1,083,244 or 34.58 per
cent. The greatest decline, in terms of value, was at Cayes, Gdes. 2,004,814.
Values at Port-au-Prince declined by Gdes. 1,468,874. This figure was
exceeded at Saint-Marc, where export values decreased by Gdes. 1,575,788
or 36.43 per cent. At Fort-Liberte, where sisal is the only crop exported,
shipments of this commodity increased by 1,370,499 kilos as compared
with 1936-1937. Export values at that port, however, declined by Gdes.
371,815 or 10.73 per cent.
Port-au-Prince, as usual, handled a much greater part of the export
trade than any other port, 38.75 per cent. Fort-Libert6 was in second
place with 8.91. Cap-Haitien and Cayes were next in importance, each
of them accounting for 8.30 per cent of all Haitian exports. Saint-Marc
followed with 7.92 per cent, and Gonaives was in sixth place with 7.33
per cent.
The share of the export trade taken by the other ports was 20.49 per
cent, divided as follows: Jacmel 5.90 per cent, Petit-Goave 5.01 per cent,
Port-de-Paix 4.57 per cent, Miragoine 2.79 per cent, Jer6mie 2.12 per
cent, and Aquin .13 per cent.
The explanation of the general decline in export values at the various
ports is, principally the drop in commodity prices. However, in the case
of Aquin, J6remie, and Petit-Goave this is not the only factor which has




HAITI: REPORT OF FISCAL REPRESENTATIVE


contributed to the decline in export trade at these ports. From 1916-1917
to 1930-1931, Petit-Goive was fourth in importance as a port of shipment.
Since 1930-1931, the export trade of Petit-Goave has steadily declined
with the result that in 1937-1938 it stands in eighth place.
J6r6mie, from 1916-1917, to 1930-1931, stood in seventh place as a port
of export. In 1937-1938, Jeremie had fallen to eleventh place. The ex-
planation of the decline in the export trade at these two ports lies in the
fact that each year a larger proportion of the coffee produced in their
tributory regions is shipped to Port-au-Prince for export. In the case of
Petit-GoAve, the reason for this change in the trend of its export trade
is difficult to determine. In so far as Jer&mie is concerned, a fairly obvious
explanation may be offered. In some European markets the price offered
for Haitian coffee is apparently influenced by the port in Haiti from which
it is exported. Port-au-Prince coffee is classed as Contract No. 2, J6r6mie
coffee is classed as contract No. 3. The price differential is seemingly great
enough to more than cover the expense of shipping J&remie coffee to
Port-au-Prince for export. This is not true in the case of Petit-Goive as
coffee from that region falls in the same classification as that of Port-au-
Prince.
The increasing tendency in Europe to cup test coffee and to judge its
value by its quality, rather than by its appearance or supposed origin may
result in a return to Jeremie of its former position as a port of shipment.
The importance of Aquin as a trading center or port of export has
diminished to the vanishing point. Export firms, with one exception, no
longer maintain establishments there. Almost all the coffee, cotton, and
other products produced in the Aquin region now find their outlet at the
port of Cayes and Miragoane. The one exception to this is logwood. The
nature of this product is such, and its present value so low, that its trans-
portation to other ports for export is not profitable.
The principal outlet for coffee was Port-au-Prince. Shipments valued
at Gdes. 5,130,108 passed through that port. It was also the principal port
of shipment for cotton (Gdes. 2,844,898) and the only export outlet for
sugar (Gdes. 3,892,481). Exports of sisal from Port-au-Prince were valued
at Gdes. 107,670 and exports of bananas at Gdes. 182,034.
Cayes was second in importance in the coffee trade with exports valued at
Gdes. 2,635,227. Jacmel exported coffee valued at Gdes. 1,736,720.
Cap-Haitien, Gonaives and Petit-Go.ve each reported coffee exports
valued at slightly over Gdes. 1,500,000. The other ports reported values
ranging from Gdes. 948,587 in the case of Port-de-Paix to Gdes. 7,545 at
Aquin.
Cotton was exported in 1936-1937, from seven ports. Saint-Marc follow-
ed Port-au-Prince with a value of Gdes. 1,323,363. The only other port
of importance in the cotton trade was Gonaives, which reported exports of
this commodity valued at Gdes. 713,805.




HAITI: REPORT OF FISCAL REPRESENTATIVE


The leading port of shipment for sisal was Fort Liberte. This port
accounted for sisal exports valued at Gdes. 3,094,261 out of a total export
value for this product of Gdes. 3,236,252.
The following table shows the number of stems of bananas exported
during 1937-38, the values and the ports of shipments:
Ports Stems Gourdes
Cap-Haitien.............................. 406,412 642,393
Cayes ................................... 48,965 65,498
Jacmel .......................... 85,983 127,710
Miragoane ................................ 17,883 31,243
Port-au-Prince ...................... 176,791 182,034
Port-de-Paix ............................ 359,370 501,987
Saint-Marc .............................. 267,772 450,263
1,363,176 2,001,128

Shipping

The general advances in freight rates put into effect during 1937, and
in the early part of 1938 were maintained throughout the fiscal year. Ship
owners failed to find in the disastrous crash in the prices of the commodities
Haiti exports, any reason for lessening the burden they have placed on
Haitian commerce. The steamship companies serving Haiti took full
advantage of their position and of the international freight conferences
which they have formed to squeeze the last possible centime from the Hai-
tian producer. It seems clear that this practice will stop only when, because
of transportation costs commerce ceases to move at all.
Haiti has just passed through one of the most trying years in its recent
history. That shipping companies failed to respond to the plea for lower
freight rates in a year when the need was felt as never before, holds out
little hope that rates will ever be voluntarily reduced from the present
unreasonably high level to which successive increases have carried them.
Passenger accommodations between Haiti and New York are still at a
premium. During certain seasons of the year it is almost impossible to
purchase transportation between Haiti and the United States. As a result
Haiti's new tourist trade has been strangled.
The number of steam and motor vessels calling at Haitian ports during
1937-1938, was 655. This figure is less than the previous year's total by
67. The net registered tonnage of these vessels was 1,518,449, in 1937-1938,
and 1,642,958, in 1936-1937. These figures include the 24 tourist cruise ships
which called~at Haitian ports during the year. Further mention of them
will be made in the next section of this report.
The number of vessels of American register entered declined by 60
from the 1936-1937 figure of 289. Entries of British vessels increased from
40 in 1936-1937, to 52 in 1937-1938. The number of vessels flying the Dutch
flag decreased from 159 to 158. The records show that in both 1937-1938,
tnd 1936-1937, entries of French vessels totalled 30. Calls made by German




HAITI: REPORT OF FISCAL REPRESENTATIVE


vessels, however, declined from 74 in 1936-1937 to 68 in 1937-1938.. The
number of vessels of other nationalities calling at Haitian ports decreased
from 130 in 1936-1937 to 118 in 1937-1938.
Although the number of vessels calling at Haitian ports declined there was
no lack of cargo space for the principal products of both the import and
export trade. However, several times during the year highly perishable
cargo was left in New York for lack of refrigerator space, causing consider-
able loss, not to mention inconvenience, to importers whose trade is largely
in commodities of this nature.
As is usual, American ships carried a greater proportion of import com-
modities than vessels of any other nationality.
In 1936-1937, American vessels carried 55.01 per cent of the import trade
valued at Gdes. 25,349,934. In 1937-1938, American ships carried mer-
chandise valued at Gdes. 18,691,802, representing 49.22 per cent of total
imports.
Dutch ships were next in importance carrying 23.80 per cent of total
imports, with a value of Gdes. 9,038,042, in 1937-1938. In 1936-1937, Dutch
vessels handled a smaller share of the import trade. During that year they
brought to Haiti 20.99 per cent of all imports, valued at Gdes. 9,670,048.
Ships of Norwegian register, mostly under charter to American com-
panies, were third in importance in the import trade. These vessels carried
12.10 per cent of all imports, valued at Gdes. 4,596,028. The greater part
of the merchandise transported to Haiti by Norwegian vessels came from
the southern ports of the United States.
German vessels transported 8.45 per cent of total imports to Haiti, with
a value of Gdes. 3,208,968, during 1937-1938. During 1936-1937, 7.94 per
cent of all imports were carried by German ships. French vessels carried
2.27 per cent of Haitian imports during the year, and British ships carried
1.69 per cent.
Japanese vessels carried only 0.54 per cent of total imports. The balance,
1.93 per cent, was distributed among ships of other nationalities than
those mentioned.
American ships transported 54.94 per cent of total imports from the
United States. Dutch vessels carried 22.07 per cent, and Norwegian vessels
20.71 per cent.
Most of the merchandise imported from the United Kingdom arrived in
Haiti via New York. In consequence, American and Dutch vessels carried
the greater part of the goods imported from that country. Ships of Ameri-
can register carried 49.93 per cent of the merchandise imported from the
United Kingdom, and Dutch vessels carried 42.43 per cent. Altho monthly
calls are made in Haiti by ships of British register, clearing from England,
a relatively small proportion of the commodities imported from that coun-
try is carried on British vessels, due largely to their round about schedule
of calls and the long delay between their departure from England and





HAITI: REPORT OF FISCAL REPRESENTATIVE


arrival here. During 1937-1938, they handled only 3.47 per cent of this
trade.
Over one third of all imports from Belgium arrived in Haiti in transit,
via New York. American vessels carried 31.33 per cent, and Dutch vessels
8.92 per cent of this cargo. The other two thirds of all shipments from
Belgium arrived directly from Europe on vessels of German nationality,
which carried 58.89 per cent of all imports from Belgium during the year.
Holland, having direct steamship connection with Haiti, shipped 76.63
per cent of all its exports to Haiti on vessels flying the Dutch flag. Ameri-
can vessels carried 18.36 per cent of all imports from the Netherlands, in
transit from New York.
French vessels carried 55.94 per cent of all imports from that country.
American ships were in second place in this trade with 23.30 per cent, and
12.32 per cent of total imports from France were carried in Dutch vessels.
Imports from Italy were carried largely on vessels of American register.
During 1937-1938, 70.26 per cent of all imports from that country were
carried on American ships. Dutch vessels carried 10.41 per cent of imports
from Italy, and German vessels 16.76 per cent.
Only 10.09 per cent of imports from Japan were carried on Japanese
vessels.
American vessels carried 80.93 per cent of the merchandise shipped from
Japan to Haiti. Dutch vessels shared in the trade to the extent of 6.40 per
cent. A large proportion of the goods coming from Japan arrived in transit
through the Panama Canal from ports on the Pacific coast of the United
States, and were transported from Panama to Haiti by Dutch and American
ships.
Imports from Czechoslovakia were distributed more or less evenly
between ships of American register, which carried 38.40 per cent of im-
ports from that country, Dutch vessels which carried 30.30 per cent,
and German vessels which carried 30.20 per cent.
Of imports from Germany, 70.95 per cent were transported in vessels
flying the German flag. American vessels participated in this trade to the
extent of 19.12 per cent, and Dutch vessels transported 9.72 per cent.
The greater part of the merchandise imported from Canada is transported
in American, Dutch and Norwegian vessels. American ships carried 31.74
per cent; Dutch ships 27.73 per cent, and Norwegian ships 29.50 per cent
of all imports from that country.
Over 60 per cent of the export trade was divided equally between Ameri-
can and Dutch vessels which carried respectively 31.27 per cent and 31.19
per cent of all exports.
American ships in 1937-1938, carried 31.27 per cent of all exports. In
1936-1937, American vessels shared only 26.53 per cent of this trade, being
in second place to Dutch vessels which carried 32.65 per cent. In 1937-1938,
vessels of Dutch nationality carried 31.19 per cent of all exports.





HAITI: REPORT OF FISCAL REPRESENTATIVE


British ships were third in importance in the export trade during 1937-
1938, having carried 11.47 per cent of total exports. They maintained the
same relative position as in 1936-1937, when they were also third in im-
portance. However, the amount of total exports carried by British
vessels during that year was 12.49 per cent.
In 1936-1937, German vessels transported 12.31 per cent of all the mer-
chandise exported from Haiti. In 1937-1938, the relative importance of
German vessels in this trade was less. During that year, they carried only
10.61 per cent of all exports.
Next in importance after German were vessels of French nationality
which carried 9.60 per cent of all exports. During 1936-1937, French vessels
obtained 11.40 per cent of the export trade. The decline in the share of
the export trade obtained by French vessels during the year was due to
the fact that shipments of coffee to France during 1937-1938 were consider-
ably less than they were in 1936-1937.
Norwegian vessels carried 2.25 per cent of the cargo exported from Haiti
and Japanese vessels 0.29 per cent.
The balance, 3.32 per cent, was carried in vessels of nationalities other
than those mentioned, principally ships of Honduran register which
transported during the year most, if not all, of the bananas shipped from
Haiti to the United States.
Slightly over half of total exports to the United States during 1937-1938,
were transported in American vessels, the exact amount being 51.30 per
cent. Vessels flying the Dutch flag took second place in the transportation
of Haitian products to the United States, having carried 34.49 per cent of
all exports to that country. Third in importance in Haiti's export trade
with the United States were vessels of nationalities other than those men-
tioned which carried 7.14 per cent of all exports to American ports. British
vessels participated in this trade to the extent of 3.95 per cent, and Norwe-
gian vessels obtained 3.12 per cent of this cargo.
The second country of importance in Haiti's export trade was the United
Kingdom and British vessels transported the largest share, 39.39 per cent,
of Haiti's exports to the British Isles. American ships obtained 17.23 per
:ent of all cargo from Haiti destined for the United Kingdom. Dutch
vessels carried 7.34 per cent, and Norwegian vessels 5.07 per cent of ship-
ments to Great Britain.
Dutch vessels carried 33.63 per cent of all the cargo exported to Belgium.
German vessels were next in line with 21.68 per cent. French vessels obtain-
!d 18.98 per cent; American vessels 17.04, and British vessels 8.67 per cent
of Haiti's export trade with Belgium.
The merchandise shipped to France was fairly well distributed among
the vessels of the various nationalities which serve Haiti's export trade.
Dutch vessels obtained the largest share, 25.82 per cent, of this cargo.





HAITI: REPORT OF FISCAL REPRESENTATIVE


German vessels took 22.80 per cent of all exports to France. French and
British vessels carried an almost equal amount, British vessels obtaining
17.65 per cent, and French vessels 17.66 per cent of all Haitian exports to
that.country. The share of American ships in this trade was 13.96 per cent.
The bulk of the merchandise exported to Germany was carried in ships
of German nationality. They obtained 84.12 per cent of all exports to that
country. The balance of this trade was divided as follows: American vessels
3.02 per cent; French vessels 4.37 per cent, and Dutch vessels 2.84 per cent.
American vessels transported from Haiti 44.38 per cent of all exports to
Italy. Dutch vessels obtained the second place in this trade with 26.16
per cent. German vessels took third place with 23.28 per cent, and 6.17 per
cent was carried by vessels of British nationality.
Exports to the Netherlands were carried largely in Dutch ships. They
transported 72.59 per cent of all'exports to that country. Next in importance
in this trade were vessels flying the British flag, which obtained 13.99 per
cent of exports to the Netherlands. American vessels shared to the extent
of 6.72 per cent in this trade; German vessels to the extent of 4.67 per cent,
and vessels of French nationality obtained 2.25 per cent of this cargo.
The export trade was distributed among the vessels of the various
nationalities mentioned, during 1937-1938, very much as it has been for the
past few years, with the exception that French vessels are now carrying a
considerably less proportion of Haiti's exports than they were a few years
ago, and that American vessels have obtained a greater share.
The decline in importance of the cargo carried by French vessels is due
to lessened cargo from Haiti to France. In previous years, French vessels
carried a large proportion of this cargo.
During the past two years, exports of Haitian coffee to the United States
have greatly increased in volume, and a large portion of the increased coffee
shipments was carried in vessels of American register.
In April 1938, vessels of the Colombian Line, which served Haitian ports
on regular schedules for many years, were withdrawn from the Haitian
trade. At the time this service was suspended it was expected that ships of
the Grace Line would take their place, calling at Port-au-Prince on the
south bound run, and at Port-au-Prince and Cap-Haitien northward bound.
These expectations were not realized. Vessels of the Grace Line omit
Haitian ports on the southern run, and touch only at Cap-Haitien when
bound north.
The failure of the Grace Line to make Port-au-Prince a port of call has
further reduced the already limited passenger accommodations between
Haiti, New York and southern ports, inflicting a decided blow to Haiti's
winter tourist trade. The three new steamers which the Panama Railroad
Steamship Company, an American line, will put in service between New
York and Haiti during 1939, will do much towards alleviating the present
situation in the passenger trade to and from Haiti.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Tourist Trade
Port-au-Prince is becoming increasingly popular as a port of call for
tourist ships. In 1933-34 only ten large cruise ships called at Port-au-
Prince; in 1935-36 there were fifteen; in 1936-37 there were seventeen; and
during 1937-38 a total of twenty-four such vessels stopped at Port-au-
Prince. The large increase in number during the past year was due to ten
visits of the North Star of the Clarke Steamship Company, a cruise ship,
which during the winter months, makes weekly West Indies cruises out of
Miami. The cruise ships which visited Port-au-Prince during 1937-38
carried 7,469 passengers.
Vessels on regular or special cruises stay in port for only a few hours.
Of greater importance to the tourist trade are the calls at Haitian ports
by passenger or cargo vessels, catering to the tourist trade, and sailing on
regular schedules throughout the year. Tourist trade of this nature suffered
a set-back during 1937-38. Formerly the regular weekly calls at Port-au-
Prince and Cap-Haitien of both south-bound and north-bound vessels of
the Colombian Line permitted tourists to stop over in Haiti for a week, or a
number of weeks, making it possible for them to travel and to see some-
thing of the country outside of Port-au-Prince. Many tourists found oppor-
tunities to take the trip overland from Port-au-Prince to Cap-Haitien,
visit the famous Citadel of Christophe and the Palace of Sans Souci in a
leisurely manner, and take another boat of the same line again from the
latter port. The Colombia Line ships ceased to visit Haiti in April. The
Grace Line ships have not stopped at Port-au-Prince. They have stopped
at Cap-Haitien on their north-bound voyage only. Consequently, while it
has been possible for a number of tourists to visit the Citadel of
Christophe and the ruins of his Sans Souci palace at Milot, tourists during
the past year have had less facilities for seeing other parts of the country.
It is expected that the three new ships which the Panama Railroad Steam-
ship Company intends to place in service during the coming year and which
will make weekly calls at Port-au-Prince will again provide greater oppor-
tunities for tourists to stop over in Haiti.
There was an increase in the number of yachts visiting Haitian ports
during the year. Haiti's many beautiful harbors, magnificent coast line, and
deep sea fishing are attracting each year more and more privately owned
vessels to Haitian waters. There are no port charges to discourage these
vessels from entering Haitian harbors.
Although Haiti has much to offer tourists, its attractions have not been
extensively advertised, and are little known even to widely travelled persons.
The usual vacation sports: golf, tennis, swimming and riding, may be enjoy-
ed at any time of the year. The climate is healthy and agreeable. The
mountain scenery of Haiti compares favorably with any to be found else-
where in the world and certainly surpasses anything to be seen elsewhere
in the West Indies. Those who stay long enough in Haiti to see and learn





HAITI: REPORT OF FISCAL REPRESENTATIVE


something of its people always find in their life and customs much that is
new, interesting, and quite out of the usual experience of a vacation cruise.
Tourist trade is definitely one of the resources of Haiti which will well
repay more intensive development. Compared with other countries, similarly
situated, Haiti has done relatively little as yet to develop tourist trade.
Principally this is because of the lack of adequate and comfortable ships.
Happily now this obstacle is to be overcome.

Foreign Commerce by Months
The decline in the import trade occurring in 1937-1938 took place during
the latter half of the year. In October, imports were on a comparatively
high level, exceeding Gdes. 4,000,000, in value. November imports showed

'CHART No. 1
VALUE OF TOTAL IMPORTS AND EXPORTS. BY MONTHS
FISCAL YEARS 1930-31 TO 1937-38
MIIONhS OmpOUrDt a________Ll






1_ A___ --- -

/, i I y'i I A


'I

__ __. __ __.__ __ __ __

Io.-31 19i1-JSt 1-J3 193-354 I34--s 193s.~5 1936-.57 193T7' a

a slight increase in value, and in December, imports were valued at Gdes.
4,574,072, the highest point since October 1934-1935. During these three
months import values were well above the level of those for the correspond-
ing period of 1936-1938.
That import values attained these levels at the beginning of the year,
was, of course, due to the expectation of a good coffee crop to be sold at
the prices prevailing in October, and to the anticipated increase in banana
production. In November, importers learned of the crash in coffee prices,
and shortly afterwards became aware that the coffee crop was not as large
as had at first been estimated. In consequence, import values in January
dropped well over a million gourdes, and in February by nearly two million
gourdes, below the December figure.






HAITI: REPORT OF FISCAL REPRESENTATIVE


In almost every year, there is a drop in import values during the months
of January and February. In 1937-1938, this drop was particularly
accentuated.
The cotton crop, which usually starts near the end of January and con-
tinues for about three months, ordinarily brings a marked pickup in
imports during March and April. Contrary to the usual trend, imports
recorded but a slight rise in March; in April dropped back to the February
level and declined still further in May.
Imports, in June, increased slightly above those of May in value, but
remained well below the figures recorded for the first seven months of
the fiscal year. There were no noticeable fluctuations during the months
of July and August, from the June level. In September, however, there
was a slight upturn.
Total export values for the year, amounting to Gdes. 34,731,952, reached
a record low level.
Exports of coffee, as compared with previous years, showed remarkably
little monthly fluctuation throughout the year. The peak months were
October and January, 2,213,224 kilos being exported in the first month, and
2,339,624 kilos during the second.
Some years ago the greater part of the coffee crop was exported during
the first four months of the fiscal year. Of late years, however, a tendency
to distribute shipments more uniformly throughout the year has been
observed. In the past this has occurred, from time to time, as a result of
coffee being held in expectation of higher prices by exporters and growers.
Today, however, more and more coffee is being held in Haiti for ageing.
The continuance of this practice will inevitably result in a more uniform
spread of coffee exports over the twelve months of the year.
In January, 1938, coffee shipments amounted, in terms of value, to 13.50
per cent of total coffee exports. This was the peak month. The lowest
month in point of coffee exports was August, when 5.34 per cent of the
crop left Haiti.
More than one half of the cotton crop, valued at Gdes. 3,990,133, was
exported during the months of March and April. The total value of the
cotton exported was Gdes. 5,261,949.
Shipments of cotton in February were valued at Gdes. 635,321, and May
shipments at Gdes. 829,192. Smaller exports of this commodity were record-
ed for the remaining months of the year.
Cotton valued at Gdes. 362,426, exported during the months of October,
November and December, 1937, was a carry over from the 1936-1937 crop.
October 1937, was the peak month for exports of sisal. During that
month, 1,095,194 kilos of that commodity, valued at Gdes. 593,046 were
shipped. August was the month second in importance in the sisal trade,






HAITI: REPORT OF FISCAL REPRESENTATIVE


with exports valued at Gdes. 498,507. November and April followed next,
with exports of sisal valued at Gdes. 430,156, and Gdes. 426,090, respect-
ively.
The export flow of sisal conforms to no pattern, nor does it depend to
any great extent on the vagaries of climate or weather.
Plantation grown sisal is not a seasonal crop. It may be planted to
mature all the year round. Exports of sisal, therefore, follow no seasonal
trend, but depend on management and market demand rather than on
nature.
Sugar exports for 1937-1938, were valued at Gdes. 3,892,481. In volume,
the crop was the largest on record.
The cane grinding season Ibegins usually in January. Exports of raw
sugar, as a rule, also start during this month, and arrive at their peak in
the months of March, April and May. From these months on, sugar
exports gradually decline.
During the year under review, sugar exports reached their peak in March,
when exports of this commodity were valued at Gdes. 993,373. The second
month of importance was May, when sugar valued at Gdes. 812,844 was
exported. In January exports valued at Gdes. 562,316 were reported, and
April exports of this commodity were valued at Gdes. 650,962.
The balance of the crop was shipped during the remaining months of
1938. During the months of November and December 1937, no sugar left
Haiti.
Bananas come to maturity throughout the year. As the banana industry
in Haiti is still in the early stages of development, monthly fluctuations in
the number of stems exported have little significance. New planting has
been carried on steadily during the past few years, and the monthly export
figures reflect simply the number of stems coming to maturity.
When the banana industry becomes more firmly established, and pro-
duction increases to the extent that bananas from Haiti may influence prices
on foreign markets, it is expected that management will step in and control
planting, so that the bulk of the crop will mature during the months when
the consumption of bananas abroad is greatest.
Over production of a perishable commodity such as bananas, during the
months when there is lessened demand, and lower prices, will inevitably
result in loss, and retard the progress of the industry.
Altho bananas are not a seasonal crop, the demand for bananas is season-
al. In the rational planning for production of bananas in Haiti this fact
will have to be given proper consideration.
A total of 1,363,176 stems were exported, valued at Gdes. 2,001,128. The
high month was December, when bananas valued at Gdes. 204,365 were
exported. The low month was February, with banana shipments valued
at Gdes. 105,166.







26 HAITI: REPORT OF FISCAL REPRESENTATIVE

From February on the trend in value was upwards, September closing the
fiscal year with exports valued at Gdes. 196,577, second only to December.
Other export products, such as logwood, lignum vitae, molasses, goat-
skins, and honey, are exported either when sufficient quantities are available
or more or less regularly all the year round. They show no periodicity,
and their monthly fluctuations are unpredictable.
Total export values follow a fairly well defined monthly trend. The
months of February, March and April during which large shipments of
cotton and sugar are usually made, and about 25 per cent of the coffee crop
exported, are ordinarily the high months of the year. Values decline from
then on, and rise again with the beginning of the new fiscal year.
During 1937-1938, the largest total export values, Gdes. 4,573,006 were
recorded during the month of March. This figure represented 13.17 per
cent of all export values for the year. April was the second month in
importance when export values amounted to Gdes. 4,460,100 or 12.84 per
cent of all exports.
The following table shows, in terms of value, by percentages, monthly
exports of coffee, and monthly total exports:
Coffee All exports
Month Per cent Per cent
October 1937........................ 12.77 10.60
November .......................... 8.30 6.75
December ............................ 7.89 5.34
January 1938...................... 13.50 9.96
February ............................ 10.67 9.77
March ................................ 8.80 13.17
April .................................. 7.79 12.84
May .................................... 6.66 9.60
June .................................... 6.37 6.65
July .................................... 6.11 4.78
August ................................ 5.34 5.42
September .......................... 5.80 5.12
Total.................. 100.00 100.00

Commodities Imported

Import values dropped from Gdes. 46,075,660 in 1936-1937 to Gdes.
37,973,889 in 1937-1938. The lowest year since records have been kept by
this office was 1931-1932, when imports were valued at Gdes. 37,305,551.
The reasons for this decline in imports are varied and obvious. Among
them may be cited the fact that import purchasing was on a comparatively
high level at the end of the previous fiscal year, and that in general mer-
chants were well stocked at the opening of the year, in anticipation of a
good coffee crop. Another reason was the drop in world coffee prices oc-
curring in November. This for a time caused uncertainty as to whether
the coffee crop could be marketed at a price profitable to producers and
exporters, resulting in the cancellation by Haitian importers of orders
placed abroad. A third, and most important factor, was the general decline







HAITI: REPORT OF FISCAL REPRESENTATIVE


in the price of other Haitian export products. Prospects for business,
therefore, at the beginning of 1937-1938 were not brilliant. Buying was,
consequently, conservative and on a hand to mouth basis. No one was
inclined to speculate on an improvement in general business conditions.
The drop in total import values from 1936-1937 was 17.58 per cent.
C. I. F. prices of imported products, in general, were on the 1936-1937 level,
Indicating that thelower import values are a reflection of the decrease in
the volume of imports actually recorded.
The textile group, consisting principally of cotton piece goods, although
including manufactures of other vegetable and animal fibers, and silk, was,
as in previous years, the leading import group, accounting, in terms of
value, for 33.9 per cent of all imports. In 1936-1937, this group represented
36.5 per cent of total imports.
The decline in value of this category of imports from 1936-1937, amount-
ed to 23.8 per cent.
The second group in importance was foodstuffs. Imports of this nature
declined in value by 22.3 per cent.
The only increases noted in any of the leading import groups were those
recorded for agricultural implements and machinery (up 10.7 per cent)
chemical and pharmaceutical products (up 6.2 per cent) and tobacco pro-
ducts (up 7.3 per cent).
The relative importance, expressed in percentages, of leading import
groups in each of the last two years, measured by values, is shown below:


1937-1938
Per cent
Textiles, clothing, etc................................ 33.9
Foodstuffs ............................................. 17.1
Gasoline, kerosene, etc.............................. 3.6
Iron and steel products............................. 4.4
Soap .................................................... 4.6
Automobiles and trucks........................... 2.4
Lum ber ...................................................... 1.2
Chemical and pharmaceutical products....... 2.4
Household utensils ................................. 1.7
Agricultural implements, etc...................... 2.0
Jute bags, etc.......................................... 1.6
Tobacco products .............................. ...... 1.6
Liquors and beverages............................. 0.8
All other imports............... ............. 22.7
Total .................................. ..... 100.0


1936-1937
Per cent
36.5
18.1
5.6
4.0
3.9
2.7
2.0
1.9
1.9
1.5
1.5
1.3
0.7
18.4
100.0


Imports of agricultural machinery, tools and implements were valued
at Gdes. 775,911, an increase of Gdes. 75,324, or 10.75 per cent over those
of 1936-1937. Imports of this nature have gained steadily in value during
the past four years, reflecting the increased agricultural activity in Haiti.
The value of the automobiles imported was Gdes. 514,911. This was
Gdes. 308,772 less than in 1936-1937. The percentage decline was 37.49.







HAITI: REPORT OF FISCAL REPRESENTATIVE


Imports of trucks registered a decline of five per cent in quantity and 11.0O
per cent in value.
The decreased activity in the building trades during the year was ac-
companied by a sharp decline in imports of cement. They amounted to
4,581,694 kilos, a decrease of 4,485,408 kilos, or 49.47 per cent from imports
of this commoditity in 1936-1937.
The group comprising all chemical and pharmaceutical substances and
products recorded an increase in value of 6.2 per cent over similar imports
in 1936-1937. However, imports of patent medicines decreased by 47.49
per cent in quantity and by 39.33 per cent in value.
At the beginning of the fiscal year it was anticipated that imports of
textiles, in all probability, would be below normal. During 1936-1937,
imports of textiles, largely cotton piece goods, increased by 58.2 per cent
over those of the previous year. Consumer demand was considerably less
than had been foreseen by the trade, and comparatively large stocks of
textiles remained upon the dealers' shelves or in warehouses at the beginn-
ing of 1937-1938.
The general decline in imports of this nature was, in terms of value, 23.8
per cent. Imports of plain woven cotton cloth, bleached or unbleached,
declined in quantity by 242,776 kilos, or by 29.33 per cent and in value by
Gdes. 820,812, or 30.24 per cent when compared with those of 1936-1937.
Plain woven cotton prints, and plain dyed cotton cloth, were also im-
ported in lesser quantities. As compared with 1936-1937, imports of this
category decreased by 290,787 kilos, or 19.48 per cent, in quantity. The
decrease in value recorded was Gdes. 1,264,746 or 19.14 per cent.
Cotton cloths of other weaves recorded relatively equal decreases in
imports. Imports of this class were valued at Gdes. 3,129,245 in 1937-1938.
The decline in value from the 1936-1937 figure was Gdes. 1,145,184.
Imports of knit goods also decreased in value, in this case, 16.19 per
cent. Clothing, contrary to the general trend, increased in value by 21.32
per cent.
Imports of woolen goods were valued at Gdes. 105,079. This was Gdes.
64,872, or 38.17 per cent below the corresponding value for 1936-1937.
Silk and manufactures of silk registered a decline of Gdes. 46,752, or
16.78 per cent from the 1936-1937 values.
Wheat flour is, ordinarily, by far the most important item in the food-
stuffs group. It maintained its relative position for 1937-1938. Quantities
imported, however, diminished by 3,124,915 kilos, or 29.52 per cent from
1936-1937 imports of this commodity, to 7,460,091 kilos in the year under
consideration.
Flour and rice are the only two import commodities consumed by all
classes generally of the Haitian population. In times of stress, however,
locally produced foodstuffs replace flour in the diet of the peasant classes.






HAITI: REPORT OF FISCAL REPRESENTATIVE


CHART No. 2
QUANTITIES OF LEADING COMMODITIES EXPORTED AND IMPORTED
FISCAL YEARS 1916-17 TO 1937-38


EXPOer T


M,1..IONS or FILOS
COFFEE

IL-AAAA A

LIO
JdIIJJ OFAILO3


COTTON



MILLIONS OF KILOS

S3SAL
4








0 1 a. s i i i i i I i i 1 1
MILLIONS OF KI7OS.5
SUGAR




MILLIONS OF STEMS

BANANAS



MILLIONS OF KILO0
CACAO
V n \,/ A V A


IMPORT 7"


MILUWONS OF XITLOS
7DA7 Z.1


-i V


\,J V'I


MILLION OFKHILOS
30 A FL BOUR
I* ^ A --a







HAITI: REPORT OF FISCAL REPRESENTATIVE


The consumption of rice is fairly constant. Domestic rice is, however,
rapidly replacing the imported product, and should eventually entirely
take its place.
Imports of rice declined in value from Gdes. 426,675 in 1936-1937 to
Gdes. 315,051 in 1937-1938. The decrease was Gdes. 111,624 or 26.16 per
cent.
The staple articles of diet of a large part of Haiti's population are rice,
yams and plantains. These three are essentially carbohydrates. Protein
requirements are met, insufficiently, by consumption of beans, domestic
meats, and imported fish. That pellagra is not endemic in Haiti may be
attributed to the fact that this diet is supplemented by the mangoes, alli-
gator pears, citrus and other fruits, growing in profusion throughout
Haiti.
Flour is a luxury, fish is a necessity, to the mass of the population. This
is why imports of fish have declined in importance relatively less than any
other of the principal items in the foodstuffs group since the peak years
of 1926-1927 to 1930-31.
Imports of fish in 1936-1937, amounted to 3,426,148 kilos, valued at Gdes.
1,311,661. In 1937-1938, imports of fish totalled 2,709,471 kilos, the value
of which was Gdes. 1,128,283.
Imports of meats and meat products declined from Gdes. 370,641, in
1936-1937, to Gdes. 322,624 in 1937-1938.
The value of foodstuffs other than those mentioned, in 1937-1938, was
Gdes. 1,953,163. For the previous fiscal year the corresponding figure was
Gdes. 2,130,618. The decrease amounted to only Gdes. 177,455, or 8.3 per
cent.
This decline is comparatively small when compared with the general
decline of 22.3 per cent in value of total imports of foodstuffs, and the
decline in value, for flour, fish, meats and rice of 27 per cent.
A credible explanation is that the commodities comprising the balance
of the foodstuffs group are consumed chiefly by the upper classes of the
Haitian population, whose economic situation is such that their standard
of living is not immediately affected by a drop in export commodity prices.
Gasoline imports took a decided drop in both quantity and value. Imports
of this commodity were 23.61 per ceit less in volume, and 21.58 per cent
less in value in 1937-1938, than in 1936-1937. Gasoline consumption in
Haiti is believed to have decreased during the year.
Imports of kerosene during. 1937-1938, amounted to 3,569,841 liters, a
decline of 17.82 per cent from the previous year. In value kerosene imports
declined by Gdes. 107,782, or 14.55 per cent.
In general, articles manufactured of iron and steel recorded a decline of
8.3 per cent in value, as compared with 1936-1937.







HAITI: REPORT OF FISCAL REPRESENTATIVE


Imports in the group comprising largely iron bars for reinforcing con-
crete and galvanized iron sheets for roofing, registered a decline of 466,-
565 kilos in quantity and Gdes. 153,293 in value. This represented, re-
spectively, declines of 35.68 and 25.60 per cent.
Pipes and fittings recorded a decrease of 38.63 per cent in quantity, and
19.84 per cent in value. Nails and tacks (principally nails) showed a decline
in volume of 26.05 and a decline in value of 5.06 per cent.
As with other groups comprising material used in the building trades
lessened activity in construction had its effect on imports. Comparatively
little new construction was undertaken during the year.
A striking illustration of this was the decline in imports of lumber,
which decreased by 3,776 cubic meters, or 43.54 per cent in volume, and by
Gdes. 461,589, or 49.93 per cent in value.
Cutlery imports were down by 43.31 per cent in value from those of
1936-1937. Imports of painted, tinned and galvanized kitchen and house-
hold ware were reduced by 7.63 per cent in quantity, and 7.08 per cent in
value.
Imports of the more expensive grades of kitchen and household ware
fell by 47.38 per cent in quantity, and by 40.62 per cent in value.
The decrease in imports of soap was comparatively slight. In 1937-
1938, imports of this commodity amounted to 3,107,836 kilos, a decrease
of 113,029 kilos, or 3.51 per cent from the 1936-1937 figure. The soap
imported was valued at Gdes. 1,753,313, or 2.40 per cent less than the
value recorded for the previous year.
The number of jute bags imported into Haiti is, over a period of years,
in direct relation to the size of the coffee and sugar crops. Imports of
these bags for 1937-1938 declined in quantity by 1.89 per cent, and in
value by 1.6 per cent, from the 1936-1937 figure.
Well over ninety per cent of Haitian imports are articles of prime ne-
cessity, without which the industries of the country cannot function or the
normal life of the population be maintained. It is surprising, therefore,
in a year of restricted purchasing power such as 1937-1938, that imports
of luxury and semi-luxury articles should register important gains over
imports of these articles during 1936-1937. However, this is the case.
Imports of cigarettes increased by 38.71 per cent in quantity and by 42.62
per cent in value. Importations of cigars increased by 106.71 per cent in
quantity and by 87.15 per cent in value. Imports of cheese and canned
vegetables increased considerably in both quantity and value, as did imports
of ready made clothing. The quantity of distilled spirits imported more
than doubled, and beverages, other than wine and malt liquors, recorded an
increase of 12.63 per cent in quantity and 11.19 per cent in value. Imports
of malt liquors increased by 4.11 per cent in value.







32 HAITI: REPORT OF FISCAL REPRESENTATIVE

The table below shows C. I. F. prices of various leading imported com-
modities during the past four years computed from customs records:
1937-38 1936-37 1935-36 1934-35
Unit Gourdes Gourdes Gourdes Gourdes
Cement......................Kilo 0.07 0.05 0.05 0.05
Fish.......................... Kilo 0.42 0.38 0.43 0.49
Wheat flour..............Kilo 0.37 0.39 0.32 0.30
Meats........................Kilo 1.35 1.35 1.35 1.11
Rice.......................... Kilo 0.31 0.28 0.27 0.27
Liquors.....................Liter 1.22 1.25 1.50 1.78
Lumber.....................Cubic meter 94.52 106.66 9J0.29 89.61
Gasoline.................... Liter 0.10 0.10 0.10 0.11
Kerosene...................Liter 0.17 0.17 0.21 0.24
Soap..........................Kilo 0.56 0.56 0.52 0.46
Cotton textiles............Kilo 4.04 4.08 3.58 3.31

The only price decline of importance noted, when a comparison is made
with 1936-1937, is in the case of lumber. Prices for this commodity,
however, remain well above the 1934-1935, 1935-1936, level. Wheat flour,
liquors and cotton textiles also show a slight decline, but none of the
decreases or increases noted are sufficient to have any influence on retail
prices.

Commodities Exported
Total exports recorded a decline in value from the previous year of Gdes.
10,122,498, or 22.57 per cent. The decrease in value of the coffee crop
accounted for Gdes. 6,065,742 of this amount. Cotton exports decreased
in value from the 1936-1937, figure by Gdes. 2,403,186. The value of the
sisal exported decreased by Gdes. 586,317, as compared with the value of
sisal exported in 1936-1937. The value of sugar exported was Gdes. 190,006
less than in 1936-1937. Among the principal export commodities only
bananas showed .an increase in value. Banana exports in 1936-1937 were
valued at Gdes. 1,877,583, and, in 1937-1938, at Gdes. 2,001,128. The in-
crease in value recorded was Gdes. 123,545. These five commodities re-
present 91.33 per cent of total export values for the year 1937-1938.
The value of the coffee crop in 1937-1938 constituted 49.89 per cent of
total export values. In 1936-1937, coffee values represented 52.15 per cent
of total export values.
The steady decline in the relative importance of coffee in the Haitian
export trade noted during the past few years was again observed in 1937-
1938. It cannot be attributed this year to lower coffee prices, as they were
more than compensated for by the drop in world prices of the other prin-
:ipal Haitian export products, cotton, sugar, sisal and bananas.
The ever rising importance of sugar, bananas, and sisal as export crops,
is gradually lessening the dependency of economic stability in Haiti on its
widely fluctuating main crop, coffee. Unfortunately, increased production
of sugar in Haiti is limited at present by the quota restrictions imposed
by the World Sugar Conference. Greatly increased sisal production during






HAITI: REPORT OF FISCAL REPRESENTATIVE


1937-1938, was discouraged by the distressingly low prices offered foi
this commodity. Haiti can, and does, however, produce bananas profitably
at present world prices. That export of bananas in 1937-1938, were only
slightly greater than in 1936-37, was due to the unusual climatic conditions
which prevailed in 1937-1938, heavy winds in certain sections and drought
in the principal banana producing regions of the north. It has been estimat-
ed that producers lost a minimum of 500,000 stems from these causes.
Exports of sisal, the value of which constituted 9.32 per cent of total
export values, increased in quantity by 1,025,648 kilos, over exports of that
product for 1936-1937. The value of the sisal exported, however, diminished
by Gdes. 586,317, or 15 per cent from the value recorded during the previous
year.
Cotton exports were down by 709,761 kilos, or 13 per cent, compared with
1936-1937. The value fell by Gdes. 2,403,186 or 31 per cent. Only for
bananas, among the major export products, were increased exports and
increased values recorded. Banana shipments mounted by 36.070 stems, or
3 per cent, over those of 1936-1937. The value of the bananas exported
increased by Gdes. 123,545, or seven per cent.
The relative importance of the leading export commodities for 1936-1937
and 1937-1938, is shown in the table below:
1937-1938 1936-1937
Gourdes Per cent Gourdes Per cent
Coffee ...................... 17,327,215 49.89 23,392,957 52.15
Cotton ...................... 5,261,949 15.15 7,665,135 17.09
Sugar ..................... 3,728,416 11.21 4,082,487 9.10
Sisal ........................ 3,236,252 9.32 3,822,569 8.52
Bananas .................... 2,001,128 5.76 1,877,583 4.19
Cacao ........................ 693,608 2.00 1,001,347 2.23
Goatskins ................. 452,873 1.30 782,222 1.74
Cottonseed cake ........ 414,508 1.19 652,814 1.46
Logwood .................... 372,833 1.07 645,180 1.44
Molasses .................... 596,756 1.72 392,606 0.88
All other .................... 646,414 1,39 539,550 1.20
34,731,952 100.00 44,854,450 100.00

Coffee
Although the size of the 1937-1938 coffee crop was much below the
average, in quality it was the best ever produced in Haiti. The small size
of the crop was-the result of climatic conditions over which the producers
had no control, but the marked improvement in its quality was due to better
methods of harvesting, curing and grading, the result of the Government's
educational work among producers and exporters, and of the material aid
received from the Government by them. On all sides there was a very real
measure of cooperation and this is responsible for the fine quality.
That the intrinsic quality of Haitian coffee entitles it to rank with the
world's preferred coffees has never been questioned seriously. Nevertheless,
until two years ago, faulty preparation of the bulk of the crop closed to it







34 HAITI: REPORT OF FISCAL REPRESENTATIVE

the world's best and largest coffee market; further it kept the price far
below the possible level which even fair preparation would have given.
This condition has been remedied to the extent that in 1937-1938, Haiti
sold, 8,855,473 kilos or 35.03 per cent of its coffee crop in the United States.
Unless one takes into consideration in some detail what this signifies, the
measure of Haiti's accomplishment will not be understood.
Last year the world's coffee commerce was in a state of confusion. Brazil
had withdrawn its long established price control experiment and thrown
unlimited quantities of coffee at any price obtainable on the world markets.
.Quality coffee prices dropped in sympathy with low grade coffee prices.
There was almost no price level at all for weeks at a time.
Then too the menace of war kept all importers and roasters of coffee in
a; state of continued uncertainty. Coffee futures, the selling of which
stabilizes values for all holders of stocks of coffee, were as demoralized as
current prices and no one wished to be caught with large commitments.
SThe increasing use of exchange controls and of the quota systems by
Euiropean countries further disturbed and menaced the sale of coffee.
Under all of these circumstances there was the normal and to be expected
reaction. Coffee producing countries increased their efforts to maintain and
to enlarge their share of such possible open markets as remained.
When it is said that Haiti sold its entire crop notwithstanding that the
French market remained closed until June 24, 1938, the measure of Haiti's
accomplishment can be understood.
Coffee exports in 1937-1938, totalled 25,062,634 kilos, valued at Gdes.
17,327,215. In 1936-1937, exports of coffee totalled 24,806,858 kilos, valued
at Gdes. 23,392,957. The 1937-1938 crop was one per cent greater in quan-
tity, and 26 per cent lower in value than the 1936-1937 crop.
The quantities of coffee exported during the last two fiscal years, by
countries of destination, are given below:
1937-1938 1936-1937
Kilos (000's) Per cent Kilos '(OOOs) Per cent
Belgium ........ 6,227 24.2 5,623 22.7
France ............ 2,637 10.8 5,057 20.3
United States.. 8,855 35.0 4,636 18.7
Italy ............ 535 2.1 3,822 15.4
Denmark ....... 2,749 10.7 2,130 8.6
Netherlands .... 1,311 5.4 921 3.7
Sweden .......... 580 2.7 894 3.6
Germany ........ 446 1.6 724 2.9
All other ....... 1,723 7.6 999 4.1
25,063 100.0 24,806 100.0

Exports to France continued to decline. The application by France during
the greater part of the fiscal year of its "general" tariff to Haitian products
and the refusal of any coffee quota to Haiti was responsible for reduced
purchases of Haitian coffee by that market. Another factor of lesser im-






HAITI: REPORT OF FISCAL REPRESENTATIVE


portance, but of particular significance, is the growing tendency -of ex-
porters to sell directly to those countries which formerly purchased Haitian
coffee through the intermediary of the Havre market.
The new Franco-Haitian commercial convention signed in Paris June
24, 1938, opened again, for a period of three years, the French market to
Haitian coffee. The general feeling of satisfaction which followed the
announcement of the signing of this treaty, was somewhat marred, as it
gradually became known that its application was conditioned by the pro-
visions of several riders, placing a heavier burden on exports of coffee to
France than at first had been anticipated. Nevertheless, the re-opening of
the French market is of decided advantage to exporters, as France has a
market for Haitian coffee long established and in which other coffees have:

CHART No. 3
AVERAGE COFFEE PRICES, F. O. B. HAITIAN PORTS
FISCAL YEARS 1916-17 TO 1937-38
"GOUBIDE3 PE. KILO'
2.7.--_--_-- ------------__--_------


t.y -------------- ---L ---_ -_----- ---




o------------------------ -








/9/6-17to /9ZZ-?-3 W-Z4 L4-ZS5-Z$ Z-ZT7 Z-I8-Z9ZS-30JO-1.J1/-Z Z-J5J~-J4-J535s-5J6- -J7-38

little chance under equal conditions of anything like equal preference by
the consuming public there.
An immediate upward swing in exports of coffee to France was noticed
after the convention went into effect. Of the 2,636,517 kilos of coffee
exported to France during the fiscal year, 1,233,158 kilos were shipped
during July, August and September.
Exports of coffee to Belgium rose from 22.7 per cent of total exports in
1936-1937 to 24.14 per cent of total exports in 1937-1938. In 1936-1937,
Belgium took 5,623,368 kilos of Haitian coffee. In 1937-1938, the amount
was 6,226,897 kilos. It is probable, however, that to some extent this in-
crease reflects the transfer of business from Le Havre to Antwerp of the
resale of Haitian coffee to other European countries.






HAITI: REPORT OF FISCAL REPRESENTATIVE


For some time past stringent legislation governing the quality and the
appearance of the coffee which may be imported into Belgium has been in
force. It is, therefore, particularly gratifying, in a year of such merciless
competition in the coffee trade, that notwithstanding the stricter control
of coffee imports by the Belgian authorities, Haiti increased its sales of
coffee to Belgium.
Sales of coffee to Italy amounted to only 2.08 per cent of total coffee
exports, as compared with 15.4 per cent in 1936-1937. It is a matter of
grave concern to Haiti that Italy, notwithstanding the provisions of the
Haitian-Italian commercial convention still in effect, has seen fit to impose
import restrictions on Haitian coffee, which to all appearances are responsi-
ble for the general decline in trade between the two countries.
Germany's share of the Haitian coffee trade dropped from 2.9 per cent
in 1936-1937, to 1.64 per cent in 1937-1938. That it would decline was
expected, in view of the present trade policies of Germany. Haiti has not
been equipped to do business on a basis of barter, and until such time as
Germany offers to Haiti the advantages offered by other markets it is
to be expected that its export trade with that country will show no marked
development.
Coffee exports to Denmark showed an increasing trend. In 1936-1937,
Haiti shipped there 2,130,220 kilos of coffee, or 8.6 per cent of the year's
crop. In 1937-1938, that country took 10.72 per cent of the crop, amounting
to 2,748,983 kilos. Coffee exports to Denmark have been on a fairly
constant level for the last decade.
SIn the endeavour to obtain diversity of markets for its principal crop,
Haiti added during 1937-1938 ten new customer countries to the list of
those which regularly purchase Haitian coffee. While it is true that these
ten countries purchased together less than one per cent of all coffee ex-
ported during the year, the necessary contacts have been made, and further
development of these new markets will follow.
The downward break in coffee prices resulting from the collapse of the
Brazilian price-fixing policy faced the Government and business with a
situation which combined all the elements of disaster. The reduction in
coffee duties necessary to move the crop forced the budget badly out of
balance. The measures taken to restore its balance are narrated elsewhere
in this report.
Exporters were confronted with the necessity of marketing the bulk of
the coffee crop elsewhere than in France and Italy, which countries together
took 36 per cent of the 1936-1937 crop. The marked improvement in
quality of this year's crop made this possible of accomplishment.
The 1937-1938 crop was remarkably free from the groundd" taste
complained of in previous years. Consequently, it was acceptable to the
American coffee trade, which heretofore has been reluctant to purchase
freely Haitian coffees.







HAITI: REPORT OF FISCAL REPRESENTATIVE


During the, year, the Government continued its program of building
cement coffee drying platforms throughout the coffee producing regions.
The prediction made in last year's report that enough of these coffee drying
platforms have been constructed so that a large part of the 1937-1938 crop
would be free of objectionable flavor seems to have been realized. The
continued construction of these platforms or of drying trays will help to
assure continued improvement in the quality of the coffee produced in
Haiti in regions not now served by coffee washing and drying plants.
The new coffee machinery installed during the year 1936-1937 has in-
creased the production of washed coffee by about 54 per cent over the
1936-1937 figure. During 1937-1938, plans were made for, and construction
started on several new coffee factories for the production of washed coffee.
Much has been written about the present over production of coffee. The
fact that there exists a tremendous surplus over immediate world require-
ments has been greatly emphasized and been given wide publicity.
What has not been sufficiently emphasized is that there exists no surplus
of high grade mild coffees, and that countries producing coffee of this type
can and do sell their entire production, at better prices than those obtained
by their competitors marketing inferior lowland coffees.
World production and world consumption of high grade coffee is
constantly on the increase. World consumption of low grade coffee is
steadily decreasing, although production has not diminished to any satis-
factory extent. Hence the ever increasing surplus of this type of coffee.
It became evident many years ago that arabica coffee, grown in the higher
altitudes, was destined to replace, to a great extent, in world markets, the
lowland grown coffee.
Failure to recognize this fact, or the inability to adjust their economic
schemes to changing conditions, by the countries producing lowland coffee
result in the present unsalable, over-supply of low grade coffee.
Haiti is fortunate in that it produces arabica coffee, and that its soil and
climatic conditions are suitable to the increased cultivation of a superior
type of this variety.
The improved methods now being employed in the preparation of Haitian
coffee are adding to its value and to its reputation. In the near future
Haitian coffee will take a preferred place in world markets, fearing no
competition, as the world demand, for many years to come, will be greater
than the supply.
On May 1, 1938, the services of Mr. Leslie Springett, an expert in the
production and preparation of coffee were made available to Haiti through
an arrangement between the Government and Mr. C. A. Mackey, President
of the New York Coffee and Sugar Exchange.







HAITI: REPORT OF FISCAL REPRESENTATIVE


Mr. Springett in cooperation with the Haitian Agricultural Service has
undertaken a survey of the coffee growing regions of Haiti, and of those
suitable for future coffee production, with the purpose of determining the
areas capable of producing the highest grade coffee. In addition he is
introducing to the coffee industry better methods of drying and curing
natural coffee, the extension of the practice of cup testing, and is urging
the establishment of modern coffee factories for the production of washed
coffee.
The activities of Mr. Springett form only a part of the large scale govern-
ment program for the improvement of Haitian coffee. Much has already
been.done, but much remains to be accomplished. Needful legislation has
been enacted, more may be required. An astonishing amount of inertia,
apathy and ignorance is yet to be overcome before the coffee industry of
Haiti approaches its optimum level.
While, at present, much emphasis is laid upon the improvement of the
"natural" coffee now largely exported from Haiti the ultimate aim of the
government's program is the replacement of this type by washed coffee.
A good start in this direction has been made, and it is confidently expected
that progress along this line will rapidly continue.

Cotton
Exports of cotton in 1937-1938, totalled 4,681,814 kilos. There was a
decline of 709, 761 kilos, or 13 per cent, from the total of 5,391,575 kilos
exported in 1936-1937.
From 1916-1917, to 1930-1931, cotton exports averaged 3,933,888 kilos
yearly. From 1931-1932, to 1935-1936, the yearly average was 5,877,664
kilos. The 1935-1936, 1936-1937, and 1937-1938, crops show a steady decline
from the 1931-1932, to 1935-1936 average.
This decline is the result of the spread of bollweevil infestation. In spite
of sanitary and quarantine measures this pest has steadily and relentlessly
cut down the production of native perennial cotton. Experiments with
several varieties of annual cotton have been carried on by the Agricultural
Service with varying success. Until now, however, these experiments have
not produced a variety considered entirely suitable for extensive culture
in Haiti. Nevertheless, efforts in this direction are being continued.
Although the area of infestation increased during the year, quarantine
regulations are still being enforced in order to minimize as much as possible
the ravages of the pest.
,The price paid for the 1937-1938 crop offered no encouragement to cotton
planters. Customs records show that the average price per kilo received
by exporters was Gde. 1.12. This compares with an average price per kilo






HAITI: REPORT OF FISCAL REPRESENTATIVE 39

of Gdes. 1.42 in 1936-1937, and was the lowest price at which Haitian cotton
was sold since 1932-1933.
The average prices received for cotton during the last nine fiscal years
are given below:
SFiscal Years Gourdes per kilo
1937-1938......................................... 1.12
1936-1937 ........................................... 1.42
,1935-1936............................................ 1.26
':1934-1936 ........ ........... ................... 1.24
1933-1934 .......................................... 1.29
1932-1933............................................ 0.79
1931-1932............................................ 0.64
1930-1931.......................................... 1.02
1929-1930............................................ 2.18


As was the case last year the United Kingdom purchased a larger per-
centage of the crop than any other country. Exports of cotton'to the United
Kingdom amounted to 1,918,408 kilos, or 44.87 per cent of total cotton
exports. France took 1,895,256 kilos, or 37.67 per cent of total exports.
Japan purchased 14.32 per cent, amounting to 716,549 kilos. Germany in-
creased its purchases by 59,509 kilos over the 1936-1937 figure of 657,040
kilos.
Exports of cottonseed cake declined from 6,347,055 kilos in 1936-1937,
to 5,045,697 kilos in 1937-1938, a decrease of 21 per cent. The drop in
exports of this commodity is an immediate corollary of the drop in cotton
exports. The value of the cottonseed cake exported declined by 37 per cent,
indicating the lowered unit price received for this commodity during 1937-
1938.
Considerable capital has been invested in Haiti in industrial plants for
the production of cottonseed oil, and its conversion into lard substitutes
and soap. The declining production of cotton, and its by-product cotton-
seed, is a matter of grave concern for thefuture of this industry. However,
groundnuts or peanuts appear to offer an acceptable substitute, and to grow
well here.
The United Kingdom purchased 85.14 per cent of cottonseed cake exports.
Belgium took 7.30 per cent and Curacao 6.48 per cent.


Sugar
Exports of sugar in 1937-1938 were seven per cent higher in volume and
four per cent lower in value than those of 1936-1937. The price per kilo
F.O.B. fell from Gde. 0.124 in 1936-1937 to Gde. 0.111 in 1937-1938.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Average F.O.B. prices for the last eleven years, as computed from
customs records, are given below:
Fiscal Years Gourdes per kilo
1937-1938........................................... 0.111
1936-1937................................. .... 0.124
1935-1936... .......................... ... 0.108
1934-1935 ............................................ 0.106
1933-1934.......................................... 0.108
1932-1933...... ....... ... ......................... 0.090
1931-1932...................... ..... 0.108
1930-1931................................. ........ 0.140
1929-1930.......................... .... 0.199
1928-1929............................................ 0.326
1p27-1928......................................... 0.271

The World Sugar Conference held in 1937 and again in 1938 has not,
as yet, achieved the purpose for which it was called. Sugar is still a com-
modity unprofitable for even efficient producers. Expectations of higher
prices for sugar have not been realized.
SAt.the last conference, held in July 1938, it was decided that further
drastic action was required, if prices were to be raised, and the quotas of
the participating nations were reduced from a total of 3,682,500 metric
tons to a figure more commensurate with the requirements of the free
market for the second year of the agreement, estimated to amount to
3,000,000 metric tons.
Through the application of a 5% cut, and through voluntary surrenders
on the part of many of the exporting countries, the quotas for the second
year of the Agreement (beginning September 1, 1938) were reduced to
a total of 3,270,000 tons. It is expected that further voluntary releases on
the part of certain exporting countries and probable purchases by the
British Government (not included in the estimated requirements of 3,000,000
tons) will take care of the present surplus of 270,000 tons.
In this adjustment Haiti's basic quota of 32,500 metric tons has been
reduced to 29,900 tons for the second year of the Agreement. This is a
very distinct hardship on Haiti in view of the fact that at this writing
shipments on account of the above quota already amount to 3,755 metric
tons out of the 1938 crop, leaving a balance of only 26,145 metric tons to
be shipped out of the 1939 crop.
Haiti's only hope, under the circumstances if small cane farmers are not
to suffer the loss of a part of their growing crop, is that the United States
may find it possible to pursue the same policy towards Haiti that was
followed last year and allot to Haiti during the coming year an additional
quota, not chargeable to the free market, of at least 2,471 metric tons.
Whether or not further world reduction of sugar production is possible
to an extent sufficient to cure the ills which beset the industry is problem-
atical. Sugar is suffering not alone from overproduction, but from under-
consumption. To large groups of the world population, sugar, once an






HAITI: REPORT OF FISCAL REPRESENTATIVE


every day article of diet, is now a luxury, and is sometimes unobtainable.
Until the artificial trade barriers restricting consumption are lifted, and
certain countries cease giving support to the uneconomic production, from
a cost point of view, of sugar, there is but little hope for a change in the
present position of the sugar industry. The conflicting interests of the
various sugar producing countries seem almost to preclude the possibility
of a reduction in production sufficient to have any marked influence on
prices. It is more than likely that there will be no tangible improvement in
the sugar trade for sometime to come, and that the Haitian sugar industry
can expect no immediate relief from competition in world markets with
sugar sold at a loss. In certain countries this same loss is being compensated
by high prices in controlled markets.
Sugar exports from Haiti in 1937-1938 totalled 33, 480,311 kilos, 2,111,955
kilos, or seven per cent more than was exported in 1936-1937.
Exports of refined sugar increased by 128,315 kilos, or 12 per cent over
the 1936-1937 figure, exports of this commodity amounting to 908,360
kilos in 1937-1938. As was the case last year, it was sold chiefly in the
United States and the Virgin Islands.
The United Kingdom, as usual, was the largest purchaser of Haitian
sugar. However, only 52.14 per cent of the sugar exported went to this
destination this year. In 1936-1937, the figure was 86 per cent, and in
1935-1936, 83.5 per cent. The United States in 1937-1938 took 44.47 per
!cent of all sugar exported. The greatly increased quantity of sugar shipped
to the United States this year is not an indication that consumption of
Haitian sugar in that country is on the increase. It simply means that
refiners in the United States entered this sugar for reexport after reprocess-
ing.
Shipments of molasses took a decided turn upward. From 10,842,450
kilos in 1936-1937, exports of this by-product of sugar rose to 15,898,183
kilos in 1937-1938. This molasses was valued at Gdes. 596,756. The in-
crease in the quantity exported was 47 per cent, and the increase in value,
52 per cent. The sole country of destination was the United States.

Sisal
Sisal production in Haiti is steadily on the increase. This is very largely
a plantation grown product and in spite of the lean years planting has gone
progressively on.
In quantity sisal shipments exceeded all previous years. This was not
true in the case of value, however. Exports were up 17 per cent in quantity
and down 15 per cent in value from those of 1936-1937. The average price
of the sisal exported in 1937-1938 was Gde. 0.448. In 1936-1937, it was
Gde. 0.618. The 1937-1938 price therefore has been considerably below the
1935-1936 price which was Gde. 0.532.







HAITI: REPORT OF FISCAL REPRESENTATIVE


The bulk of the sisal exported was grown and shipped by the large sisal
plantation at Fort-Liberte. In view of the low prices prevailing other
plantations suspended operations during part of the year. A small amount
of wild sisal was exported.
Shipments of sisal totalled 7,222,891 kilos of which 6,890,109 kilos were
exported from Fort-Libert6. Exports of this commodity at Port-au-Prince
amounted to 251,251 kilos. The balance was distributed between the ports
of Cap-Haitien (285 kilos), Miragoine (36,363 kilos), Gonaives (8,172
kilos) and Saint-Marc (36,711 kilos).
As in previous years the United States purchased the greater part of the
sisal crop, shipments to that country totalling 6,779,844 kilos, or 94.23 per
cent of total exports. Germany took 220,987 kilos, Belgium 139,028 kilos
and Canada 80,459 kilos.

Bananas
Banana shipments for the year 1937-1938 increased slightly both in
quantity and value.
In 1936-1937, banana exports totalled 1,327,106 stems, valued at Gdes.
1,877,583. Exports for 1937-1938, totalled 1,363,176 stems, valued at Gdes.
2,001,128.
The increase in quantity was 3 per cent, and the increase in value' was
7 per cent.
Expectations of a considerable increase in the number of stems exported
in the year under review unfortunately were not realized. Climatic con-
ditions, drought, and heavy winds in certain sections were responsible for
a loss of at least 500,000 stems, which would otherwise have been shipped.
For the last seven months of the fiscal year the north and north-western
coast of Haiti suffered from an almost unprecedented drought. Production
not only of bananas, but of other crops, except in the irrigated regions,
diminished to a great extent. Certain parts of the south also felt the effects
of the lack of rainfall.
The hopes of planters that banana production would increase by 50 per
cent over the previous year met with disappointment.
Production in the regions not affected by the drought, however, increased.
Exports of bananas from Cayes more than doubled. Shipments from Jacmel
increased by over 500 per cent. In 1936-1937, Miragoane exported 2,707
stems. Shipments from that port in 1937-1938 totalled 17,883 stems. Culti-
vation of bananas for export at the three ports just mentioned is in the
preliminary stage, and much greater development is under way.
With the exception of Saint-Marc, the more highly developed banana
producing regions suffered the most from the drought. Saint-Marc in
1936-1937, exported 230,735 stems. In 1937-1938, exports increased to
450,263 stems, notwithstanding the fact that over 200,000 stems nearly
ready for cutting were blown down by heavy winds.






HAITI: REPORT OF FISCAL REPRESENTATIVE


At Port-de-Paix exports dropped from 524,080 stems in 1936-1937, to
501,987 stems in 1938. Exports at Cap-Haitien fell from 433,585 stems to
406,412 stems. This was particularly disappointing, in view of the fact
that greatly increased acreage came into production during the year.
The losses caused by the drought to banana planters were commented
on as follows in the Monthly Bulletin of this office for June 1938:
"The fact that droughts have occurred in the past, are being
experienced now, and will occur in the future, calls attention to
the necessity of digging wells to furnish water, to the necessity
of opening canals for its distribution, and to the need of planned
irrigation of the banana fields of Haiti, if the present system of
small plantations is to succeed."

CHART No. 4
QUANTITIES OF BANANAS EXPORTED, BY MONTHS
FISCAL YEARS 1931-32 TO 1937-38
THOUSANDS OF .STEMS

14 ll0l i i l i i~ i l l l l i l l~ il l l l l l l l l l li i li l l i i
.0 0 l l i i i i i l l i l l ll l l l I i i l l l l l i ll i i l l l ll i l I J l


It
0II4 11 11 1 LLL . L l
g o . . .-.. -.. . . .- T 9


... ....................... .. .. . ..... ......i... .....i ... ......... ... .



so -- - ---- IB -I t t t' "

0OiNDJPSMA JrAMJJSr nJMA MJJANDJr MAMJJASONDJFMAMJJASONDJrAMJJAODJMAMJJAONDJrMAMJJA3
1951-Jr 1932-3J /193-.4 1934-35 19353PJ 1936-37 /.937-30

Studies are now being made of the irrigation possibilities of the Republic,
and work on several projects is now underway.
Another quotation from the Bulletin of June, 1938, is given here in view
of its significance to the banana industry:

"Following reports that the Sigatoka disease was becoming
widespread in Haitian banana plantations, the Government
invited Dr. James Zetek, associate entomologist, of the Bureau
of Entomology and Plant Quarantine, U. S. Department of Agri-
culture, to study the extent of Sigatoka disease in Haiti and
to make comments on other banana problems and troubles. Dr.
Zetek arrived in May and after visiting every area where Siga-
toka had been reported, and as many other banana areas as
possible, submitted a thorough and interesting report.






44 HAITI:- REPORT OF FISCAL REPRESENTATIVE

"There is a great deal in the report which is distinctly en-
couraging to the banana industry of Haiti. Unfortunately, the
report could not be conclusive on the spread of Sigatoka dis-
ease because Dr. Zetek's visit was made at the end of a pro-
longed and unusually severe dry season. The rapid spread of
Sigatoka requires high humidity and it will be in the rainy
season that the disease will spread and become dangerous, if
at all. Dr. Zetek states that all of the Sigatoka infections he saw
were on leaves that indicate the infection had taken place from
September to November 1937 and that he saw no indications of
any new infection since then. Basing his opinion on a study
of the general climatic conditions, amount of rainfall and its
distribution by months and seasons, temperature, and the amount
and distribution of morning dew, Dr. Zetek concludes that Si-
gatoka may not become serious in Haiti. In regard to the con-
ditions necessary for the spread of Sigatoka Dr. Zetek states:
"The fungus of Sigatoka disease is a weak parasite, and it
needs for its rapid development certain very definite conditions,
especially lower temperature and high humidity, and particularly
early morning dew of long duration. Lowered vitality in the
banana plant, or where grown under what may be called unsuit-
able banana situations, or where bananas are grown too closely
together, these are conditions that favor the development of the
disease. The disease spreads fast during prolonged rainy periods,
and especially if the rains are in the form of drizzles that con-
tinue for many hours. But, if rains are heavy and are followed
by several hours of sunshine, then the disease does not propagate
fast.
"Hence, good cultivation, improvement of water relations,
proper drainage where necessary, manuring of the land if possible
to do so, wider spacing of plants within economic limits, all of
these work against the Cercospora fungus.
"Returning to Haiti, we find Cercospora (Sigatoka disease)
spots, but we do not find the peculiar conditions that are a pre-
requisite for its rapid development. We have, instead, rather
pronounced drought, a prolonged dry season, plenty of sun and
wind, very little dew, conditions that work against the fungus.
"It is believed that Sigatoka can be kept down in Haiti by a
few simple measures provided these are carried out at the proper
time."
"Sigatoka disease must not be taken lightly. It has caused
tremendous loss all through the Caribbean region and although
climatic conditions in Haiti do not appear to favor its spread
it would be foolhardy for banana growers not to take those
control measures which are easily possible. The most important
preventive measure is spraying with Bordeaux powder which
has proved entirely successful. After this the measure next in
importance is to make careful inspections for at least six or
eight weeks after rains begin and to cut off and burn all leaves
which are found to be infected; and finally, it should be borne
in mind that strong vigorous plants are more resistant to in-
fection than weaker plants. Consequently, good cultivation.






HAITI: REPORT OF FISCAL REPRESENTATIVE


proper irrigation and drainage, fertilizing wherever fertilizing is
necessary practical and economical, and wide spacing between
plants are all very important in fighting the disease. Since these
measures are also essential to successful banana cultivation,
fighting the disease and making banana cultivation a profitable
venture amount to one and the same thing."
Since the above was written six months have passed, and the rainy season
has come and gone. Rain has fallen more or less abundantly over the ba-
nana regions of Haiti. No serious outbreaks of Sigatoka have been re-
ported, although its presence has been noticed here and there.
It may be assumed therefore, unless abnormal climatic conditions ensue
such as prolonged and drizzling rainfall, that Sigatoka will not seriously
menace the future of the banana industry in Haiti. Further new and
improved methods of control are now known involving greatly reduced
costs. The Haitian banana industry therefore need not regard this disease
as the certain catastrophe it was thought at first.

Other Exports
Other export commodities of some importance are cacao, goatskins,
logwood and honey. They were valued, in 1937-1938, at Gdes. 1,663,604.
In 1936-1937, exports of these commodities were valued at Gdes. 2,968,299.
Cacao exports in 1935-1936, were 1,641,124 kilos valued at Gdes. 567,026.
In 1936-1937, the volume of exports declined to 1,436,280 kilos valued at
Gdes. 1,001,347, an increase of 76.7 per cent over the 1935-1936 value.
This violent upward swing in cacao prices was matched by an equally
violent downward tendency in 1937-1938. Exports of cacao in that year
totalled 1,566,383 kilos, valued at Gdes. 693,608. The increase in volume
was nine per cent, the decrease in value amounted to 31 per cent.
These unpredictable and astonishing price fluctuations, coupled with
the extremely low prices of cacao for the past nine years have a depressing
effect on cacao production in Haiti. Cultivation of existing cacao areas
is more or less perfunctory. Present prices offer no stimulus to increased
production, and the cacao trade of Haiti'may be expected to stagnate until
prices are established on a higher level.
Goatskin exports from 1916-1917 to 1937-1938, averaged 166,236 kilos
annually. In 1937-1938, exports were 161,236, valued at Gdes. 452,873.
This was a decrease of 23 per cent in volume, and of 42 per cent in value,
from 1936-1937 exports of this commodity.
Since 1916-1917, exports of logwood have steadily declined in quantity
and value. Lessening demand for this product is the explanation. Exports
in 1937-1938, amounted to only 8,888,685 kilos, valued at Gdes. 372,833. In
1936-1937, exports of logwood were 15,679,898 kilos, valued at Gdes. 645,-
180, a decline in value of 42 per cent.





46 HAITI: REPORT OF FISCAL REPRESENTATIVE

Exports of honey also record a downward trend. The 1916-1917, average
was 569,305 kilos. During the past fiscal year only 144,290 kilos were
shipped.
Certain regions of Haiti produce a honey of exceptional quality and
flavor. However, due to faulty preparation and packing, Haitian honey has
never been able to command the best prices abroad, and is classed with the
low grade honeys. Better preparation and shipment in new, clean containers
is the remedy.
Exports of rum declined by 56 per cent in value from those of 1936-1937.
Declines both in quantity and value were also noted for beeswax, lignum
vitze, grapefruit and oranges.
During the past two or three years several new crops have been added
to the list of those heretofore cultivated in Haiti, and the cultivation of
others has been intensified with a view to producing them for export.
Among the first group may be mentioned amber seeds, giant sunflower
seeds, and tumeric. Small quantities of amber seeds were exported in 1936-
1937, and 1937-1938. Tumeric was exported for the first time in 1937-1938,
yet freight rates rendered the cash result entirely unsatisfactory.
In the second category are coconuts, ben nuts, and manioc. Extensive
coconut planting has been carried on for the past two years, and is being
continued. It is natural, however, that some years must elapse before"
production starts.
The ben nut produces a table oil of excellent flavor, and has the added
advantage that it will keep indefinitely without becoming rancid. Cultiva-
tion of this crop is increasing rapidly.
Cultivation of manioc for export in the form of flour hats been under-
taken during the last two years, on a small scale. Manioc is extensively
cultivated in Haiti in small patches for local consumption. The preparation
of this product for export if it is to command an acceptable price, however,
requires that processing commence immediately after harvesting. Plantation
growing and processing therefore, is the only practical method of pro-
duction for export.
The experiments along this line, undertaken at Cap-Haitien, have shown
that Haiti can produce manioc flour, saleable on foreign markets. Whether
or not this can be done profitably on a larger scale, at present prices, re-
mains to be determined. A trial shipment of 24,189 kilos was made to
England near the end of the fiscal year.
The crops mentioned are at present of slight importance in the Haitian
economic fabric. Nevertheless it is easily possible, with progressive cultiva-
tion, that in the aggregate, they may overshadow some of the major export
crops in the not too far distant future.





HAITI: -REPORT OF FISCAL REPRESENTATIVE


Survey of Agricultural Resources
In view of the low commodity prices throughout the world, and in view
of Haiti's economic situation brought about by the abandonment by Brazil
of its coffee valorization plan, an agricultural survey to determine the
possibilities of further increasing and diversifying Haiti's agricultural
production was undertaken during the fiscal year. Extracts from the report
are given below:
Haiti has 10,200 square miles of territory and an estimated population
of 3,000,000 people. There is, thus, an estimated average population of 294
people per square mile. This compares with 501 people per square mile in
Puerto Rico, 62 in the Dominican Republic and 90 in Cuba. More than 95
per cent of the population of Haiti would be classed as rural, since Port-
au-Prince, which can be considered the only metropolitan area, has a
population today of slightly over one hundred thousand.
Haiti has few industrial activities and these at present are of minor value.
The tables and schedules attached to this report will show that more than
96 per cent of all exports are of direct agricultural origin.
These figures showing the agricultural nature of Haiti's exports together
with the figures showing the rural nature of Haiti's population indicate the
predominantly agricultural nature of life in Haiti.
Soils of limestone origin predominate throughout Haiti. Most of these
soils are high in organic matter and unusually fertile and productive for
certain types of crops. These fertile limestone soils constitute Haiti's prin-
cipal asset.
Much of the area of Haiti is mountainous, but even steep hillsides in
most cases are at present fertile and careful selection of crops could render
them lastingly productive.
The wage scale for adult men in Haiti varies between 50 centimes to
1.50 gourde per day, equivalent to 10 to 30 cents in currency of the United
States. This wage scale compares with wage scales of 35 to 40 United
States cents per day in the nearby British possessions of Jamaica and
Trinidad, 80 cents to $1.00 per day in Puerto Rico, and $1.00 to $1.50 per
day in such banana-producing countries as Honduras, Guatemala and Costa
Rica. The wage scale in such oil-producing countries as Venezuela and
Colombia is even higher, and agricultural labor much more scarce. Cuba
has a minimum wage for sugar-cane laborers of $1.00 per day. Possibly
Brazil is the only country of the Western Hemisphere of any large popu-
lation where the wage scale is of the same low level of wages paid in Haiti.
Haiti, therefore, can be considered a country of cheap productive labor
which, if well directed, can undersell most tropical countries of the Western
Hemisphere.
Although the wage scale in Haiti is among the lowest in the Western
Hemisphere, the population has an appearance of relatively good physical





HAITI: REPORT OF FISCAL REPRESENTATIVE


welfare. For example, there are fewer signs of nutritional deficiencies in
Haiti with its wage scale of 10 to 30 cents per day than in Puerto Rico
with a wage scale of 80 cents to one dollar a day, or in Mexico or other
Central American countries. The explanation lies in the wide distribution
of the ownership of land among the people. A large percentage of the
population either owns land directly or belongs to a landowning family.
The high fertility of the limestone soils making production of food crops
comparatively easy, together with this wide distribution of land ownership,
has resulted in an advantageous combination of relatively good physical
Well-being and low wage scale.
The production of foodstuffs for home use should be the cornerstone of
Haitian agricultural policy. In Java with its 822 people per square mile, the
Netherlands government years ago developed a policy with the abundant
production of foodstuffs as a first essential. This has resulted in a popu-
lation of contented people in a state of comparatively good physical well-
being although the wage scale is low. The same effect has been obtained
in Haiti without such a policy, but it would seem logical to adopt as an
agricultural principle for Haiti, that the abundant production of cheap
foodstuffs be always placed first. This would indirectly aid the export
industries by keeping the standard of nutrition of agricultural labor on a
high plane, even though the wage scale is comparatively low. For Haiti to
succeed easily with its export crops in competition with other countries, it is
essential to maintain this advantage of cheaper wage scale.
Because of its geographic position, as compared with countries of the
eastern hemisphere, Haiti would have an advantage in the production of
such tropical crops as Manila hemp, sisal, some of the industrial-oil crops,
the insecticidal crops, and some of the essential oils requiring an abundance
of cheap labor. While maintaining in every way possible the value of the
exports of coffee, cotton, logwood, sugar, and cacao in Haiti, it would seem
desirable to give attention to such less competitive crops as those just
mentioned.
Haiti appears to be favorably situated in the production of bananas as
compared to other Latin American countries, not only because of the
cheaper labor costs, but also because of its more favorable climatic con-
ditions to avoid the full effects suffered by more humid countries from the
new epidemic and destructive banana-leafspot disease.
There are parts of Haiti in which the rainfall is not over abundant and
the vegetation in many places gives the impression of a semiarid country.
In other regions the rainfall is well distributed, while in still other parts
there are pronounced dry and wet seasons. The selection of crops adapted
,to these regions of different rainfall can make an asset rather than a lia-
bility of Haiti's climate. In this connection, on unirrigated areas one
.immediately thinks of sisal and the more recently used industrial-oil plant,
-chia, and the insecticidal plants of the genus Tephrosia. The oil plant





HAITI: REPORT OF FISCAL REPRESENTATIVE


Moringa oleifera also thrives in this climate, as do also some of the tropical
species producing tung oil. The African oil palm and coconuts as sources
of vegetable oils can be grown as hillside crops and possibly can be pro-
duced as cheaply in Haiti as in other parts of the world. Among the citrus
fruits, limes thrive in the climate of Haiti, which with its advantages of soils
and labor conditions can easily undersell other lime-producing countries.
On the more humid hillsides Manila hemp should thrive, and the success
with bananas would possibly indicate that the lime-stone soils might give
Haiti an advantage over the Philippines in the production of this crop. The
insecticidal plants of the Derris and Lonchocarpus species, the roots of
which are now in great commercial demand, should thrive in the lowlands
of adequate rainfall.
Denuded hills in Haiti have created a serious problem of liability in soil
erosion. Authoritative sources state that from 75 to 100 years ago most
of the hills of Haiti were clothed in forests. This picture is entirely changed,
for at the present time most of the hills are denuded. The disappearance of
;hill coverings has resulted from the cutting of firewood, the cutting of
logwood for export, the production of charcoal, and the clearing of hill-
sides for corn and other cultivated annual crops. The soil on those denuded
hills is now exposed to intermittent rains, sometimes intense, and on all sides
there are evidences of destructive erosion.
The topsoils of a country are usually higher in organic matter and more
fertile than the subsoils. Naturally, erosion removes the topsoil first and
thus creates impoverishment of the soils.
Research in the United States Department of Agriculture has shown that
soil erosion is cumulative. Near Gonaives one can already see hillsides, the
soils of which have been eroded leaving nothing but bare rock as a water-
shed. With every desire to avoid any statement which might be considered
that of an alarmist, it is logical to conceive that in 50 to 100 years con-
tinued soil erosion may severely impoverish the people of Haiti.
In Haiti, however, not only is soil erosion causing damage of an agri-
cultural nature, but also the -severe showers and steep hillsides result in
prompt freshets which carry soil, rocks, and rubble with them. These
rubble-carrying freshets have filled up culverts, destroyed bridges, changed
water courses, and filled up reservoirs. It is a common sight to see a culvert
filled up with rubble and the stream bed diverted to one side. One may also
see reservoirs which have been entirely filled with sand and rubble to the
rim of the retaining dam, leaving no storage capacity in the reservoir. The
sudden freshets, apart from causing severe erosion, have also destroyed
many roads and bridges in Haiti.
For any permanent system of public works, reforestation of the denuded
hills appears to be fundamental. From an agricultural viewpoint, such
reforestation is even more urgent.






50 HAITI: REPORT OF FISCAL REPRESENTATIVE

It has been advanced that, with more profitable crops in the lowlands,
the population will move itself from the hills and such hillsides will gra-
dually reforest themselves; As against this, however, is the factor of ever-
increasing population and the factor that lowlands used for profitable ex-
port crops will drive small farmers to the hillsides to produce the food
crops. It would not seem logical to expect that reforestation will take care
of itself under such conditions in Haiti.
Reforestation can be expedited even if crop plants other than timber trees
are used. As an example, it is quite probable that reforestation with some
of the tropical tung-oil species would prevent soil erosion fully as well as
a crop of timber trees, and the financial returns should be quicker and pro-
bably greater than from such timber crops. Other forest crops which
suggest themselves as of higher value than timber trees are the African oil
palms, logwood or campeche, mango trees, breadfruit trees, the chestnut
palm of Honduras, the vegetable-oil tree Moringa oleifera and a number
of similar crops. Coffee groves with their shade trees constitute a crop
that would lessen erosion in the mountains at the higher elevations, and
this is an additional reason why the cultivation of coffee, could advanta-
geously be doubled.
Among the timber crops, possibly reforestation could be made much
more promptly with teakwood and the indigenous quick-growing pine tree
of Haiti rather than with the slow-growing West Indian Mahogany. The
tanbark-producing divi-divi grows well under semiarid conditions. The
planting of date palms could be increased to some extent for local use
rather than export.
Some of the industrial bamboos would be of great value in producing
furniture and farm structures in Haiti and raising the standard of living
among the small farmers. Bamboo is one of the best crops obtainable for
checking soil erosion, and reforestation of large areas with bamboo would
seem logical and of great aid to the population as a whole.
The excerpts of the agricultural report, as given above, are taken from
the survey made by Mr. Atherton Lee, an agricultural engineer of the
United States Department of Agriculture, who is a specialist in tropical
agriculture and who was lent by the United States government to the
Haitian government for this purpose.
In addition to the foregoing, it is perhaps of interest to note here that
all of those who have been studying and working on an improvement and
increase in agricultural production in Haiti find that there is connected
with any betterment in agriculture the problem of irrigation and drainage
which must be satisfactorily solved before any great change can take place.
During the time of the French colony, there were small irrigation systems
established throughout the entire country. Also, large drainage projects
were undertaken and in use. In many of the valleys successful agriculture





HAITI: REPORT OF FISCAL REPRESENTATIVE


is dependant upon the irrigation and on the drainage, and only by the re-
establishment of sufficient irrigation and drainage can it be hoped that
there will be an adequate increase of production made possible throughout
the country as a whole. Much has been done in this connection but a very
great deal must be accomplished in the near future if the banana industry
is to increase to a point where the other factors of climate and soil con-
ditions, and adequate labor, are to be given a chance to become fully
effective.
So far as an increase in high quality coffee is concerned, all of the factors
are here, and additional plantings easily possible. But so far as substituting
annual cotton for perennial cotton may be possible, it is necessary that
irrigation be installed in much of the land which is suitable otherwise for
annual cotton, because only by the use of irrigation and careful regulation
of the season of production of annual cotton can it be hoped that the boll
weevil infestation will be overcome. Haiti can produce cotton, as it can
produce other agricultural products, at a cost which makes Haiti easily a
producing country, able to combat world competition.
Under all of these conditions, irrigation and drainage will be seen to be
the fundamental problem of Haiti.

Commercial Conventions
In trade relations with other countries, the fiscal year was marked by a
new commercial convention with France, a commercial treaty with Den-
mark and sanction of the trade agreement previously entered into with
Canada.
SBefore the world depression Haiti sold more than half of its total exports
to France. This meant that France was taking the greater portion of Haiti's
coffee. France sold its commodities, since naturally Haiti is a small market
only, to other countries, which in turn sold to Haiti the larger part of the
imported manufactured articles, foodstuffs and other merchandise which
Haiti required. This flow of trade through natural channels constituting
the pre-depression concept of triangular or multilateral trade between
nations, worked satisfactorily enough so far as Haiti was concerned. But
with the world depression and subsequent extreme emphasis upon economic
self-sufficiency among nations, came strenous efforts on the part of many
European countries to solve their economic problems by erecting higher
trade barriers-of various and sundry kinds, and thereafter negotiating
exclusive trade agreements directly and separately with other nations in
disregard of the old concept of triangular trade with its long-established
directional movements of commerce.
This new trend in international trade relations meant new problems for
many countries. For Haiti in particular the situation was difficult since
Haiti was selling the greater portion of its coffee to France and had de-
veloped few other important outlets; while on the other hand Haiti's






52 HAITI: REPORT OF FISCAL REPRESENTATIVE

purchases came largely from countries other than France. During the
period from 1916 to 1930, for example, only 6 per cent approximately, of the'
value of Haiti's total imports were purchased from France; while over 50
per cent of the total value of Haiti's exports went to France. During the
same period approximately 77 per cent of the total value of Haiti's imports
came from the United States, while exportations to the United States were
only valued at 28 per cent of total exports during the first half of the same
period and but 8 per cent during the second half.
In other words, looking at Haiti's trade with other countries individually,
Haiti's sales and purchases not only did not balance, but were completely
out of line. Haiti thus was faced with the problem of how to maintain long,
established markets with European countries which had adopted this new,
balance-of-trade policy. At the Montevideo Conference in 1933, Haiti had1
joined with other countries of the Pan American group in accepting as it'
policy the theory of unrestricted unconditional multilateral most favored
nation treaties. This theory of free trade among nations, coupled as it is
with the lowering of tariff and other barriers was then, and is today,
directly opposed to the European balanced-trade theory, yet as long as
Haiti had to go to Europe, notably to France, for a coffee market and to
England for sugar and cotton markets, it was necessary to find some way
in which Haiti could continue to export goods and, at the the same time,
render allegiance to two distinctly opposed world theories of international
commerce. This was, and is an almost impossible task; that it has given
rise to innumerable difficulties is only to be expected.
The first apparent solution was to increase purchases from France as
much as possible, but the wide discrepancy in value between Haiti's pur-
chases from France and elsewhere, reflecting consumers' preferences and
long-established movements and channels of trade, clearly indicated that
it was advisable to supplement efforts to increase purchases from France
with the development of new markets for Haitian products in those
countries where there was a chance to enter markets and, at the same time,
where much of Haiti's purchases had been and were being made.
The attempt to increase its purchases from France is the key of Haiti's
commercial relations with France since 1930. The practical difficulty in
the way of realizing balanced trade between the two countries lies in the
fact that Haiti does not consume, to a sufficiently great extent to balance
sales and purchases, the luxury articles and specialties with France pro-
duces. In an attempt to bring about greater consumption of French mer-
chandise the 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 further trade privileges to France
and still further reduced the duties, and removed all internal taxes, on
leading French specialties such as wines and perfumes. Subsequently, the
Haitian government attempted, by agreement with France, to purchase a





HAITI: REPORT OF FISCAL REPRESENTATIVE 53

substantial 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.
Although every effort was made to increase purchases from France under
the convention of 1930 and the addition to it of 1934, purchases of French
merchandise did not increase sufficiently to effect any material change in
the relation of export to import values. The convention was denounced
by France in March, 1936. Over two years passed before a new convention
was entered into. During this interval Haiti's efforts to open new markets
resulted in a shifting of business from Havre, France, to Antwerp, Belgium
and a great increase in Haiti's exports to Belgium. Likewise, business
with Norway increased considerably, but the most important movement,
commercially speaking, was the entry of Haitian coffee into the United
States market. This is fully discussed under the section on coffee.
It is perhaps important, in order to understand clearly the Haitian com-
mercial treaty position, to note here that at the time the new Haitian-French
commercial treaty was signed, June 24, 1938, there were in full force and
effect unconditional, unrestricted, most favored nation treatment agree-
ments, accords or treaties with each of the following countries, viz: Great
Britain, Canada, United States of America, Germany, Italy, Netherlands,
Belgium-Luxemberg Union, Switzerland and Denmark. These treaties had
been promulgated in "Le Moniteur" the official gazette of the Republic of
Haiti, on the following dates:

Italy.............................................September 1, 1927
Netherlands ....................................January 16, 1928
Germany .......................................August 21, 1930
The United Kingdom....................November 28, 1932
United States of America.............April 29, 1935
Belgium-Luxemberg Union............July 30, 1936
Switzerland..... ......... ...........January 14, 1937
Canada....................................... April 18, 1938
Denmark........... ...... ......June 9, 1938

The new commercial convention with France was signed in Paris June 24,
1938, and became effective in Haiti upon publication in the Moniteur July
11, 1938. The provisions of the new convention reflect the objectives of
the former convention and rider thereto, while the means invoked for their
realization are-much the same. Under the terms of the new convention the
products of France imported into Haiti are to receive most favored nation
treatment. The convention further provides for a reduction of import
duties by 33 1/3 per cent upon certain articles the most important of
which are: wrought and cast iron pipes; pipe-fittings and accessories;
kitchen utensils of cast iron; pots and kettles; surgical instruments; Castile
soap; certain kinds of cotton thread; etc. The convention provides for the
reduction of duties to specifically stated amounts on certain other French






HAITI: REPORT OF FISCAL REPRESENTATIVE


products, including lace; tapestries, tapestry fabrics, cheeses, etc., and the
following articles when designated by specified trade marks; wines, ver-
mouths, cognacs, armagnacs, liquors, cordials and medicinal wines; per-
fumes, lotions, dentifrices, essences, cosmetics, etc; pharmaceutical products;
crockery or faience and other similar articles. The French government
reserves the right to designate additional trade-marked articles of like
kind. If French importations do not reach a total value of 11,000,000 francs
at the end of the first year a supplementary detax of 40 per cent is to be
put into effect upon most of the above mentioned articles. Upon importation
into France certain Haitian products listed in the convention will enjoy
most favored nation treatment. France agrees to accord to Haiti a normal
quota of not less than 12,000,000 kilos of coffee per year. There is pro-
vision in the convention for a supplementary quota which shall be deter-
mined by agreement between the two governments. Although Haitian
sugar, alcohol, rum, tafia, etc., are to benefit from the French minimum
tariff no quotas were assigned which would permit their importation into
France, and none have been assigned to the date of writing this report.
Haiti's import tariff is primarily for revenue, and in decreasing the tariff
on important revenue producing articles, Haiti has granted substantial
concessions to France. Lowering the tariff on these articles for French
exporters means that the lower rates, under most favored nation treaties,
will automatically apply to the merchandise of some of France's com-
petitors.
A decree law published January 3, 1938, sanctioned the International
Accord for the regulation of sugar production and marketing entered into
at London May 6, 1937.. By the accord Haiti was given a production quota
of 32,500 metric tons of sugar per annum. This, however, has been further
reduced by the London Sugar conference held last summer, the details of
which are discussed in the chapter on sugar.
As mentioned above a commercial Treaty between Denmark and Haiti
was signed at Paris October 21, 1937, providing for reciprocal most favored
nation treatment. The treaty was sanctioned by decree law published June
9, 1938.
Likewise a trade agreement entered into between Haiti and Canada at
Port-au-Prince April 23, 1937, was sanctioned by decree law April 18, 1938.
The Agreement provides:
"Canada and Hayti will grant each other unconditional and
unrestricted most favored-nation treatment in all matters con-
cerning customs duties and subsidiary charges of every kind and
in the method of levying duties, and, further, in all matters con-
cerning the rules, formalities and charges imposed in connection
with the clearing of goods through the customs, and with respect
to all laws or regulations affecting the sale or use of imported
goods within the country...






HAITI: REPORT OF FISCAL REPRESENTATIVE


"The advantages now accorded or which may hereafter be
accorded by Canada exclusively to other territories under the
sovereignty of His Majesty the King of Great Britain, Ireland
and the British dominions beyond the Seas, Emperor of India,
or under His Majesty's suzerainty, protection or mandate shall
be excepted from the operation of this Agreement.
"The advantages granted or to be granted by the Republic of
Hayti to the Dominican Republic with a view to facilitating
frontier traffic shall not be affected by the present Agreement."
The trade agreement is for one year only, and is renewed unless six
months prior, to the expiration of the year notice be given by the Govern-
ment of either country of intention to terminate the agreement upon the
expiration of the term.

Tariff Modifcations
The reduction in export duties on coffee not only was the most significant
modification of the tariff during the fiscal year, but was a modification
involving a fundamental change in Haiti's tax structure.
It had long been questioned whether Haiti's tax structure was basically
as sound and well balanced as could be desired. It was generally agreed
and constantly reported that there was too great a dependence upon customs
duties and particularly upon the export duties on coffee, with consequent
fluctuations from year to year in government revenues depending upon the
volume of the coffee crop. In addition to this objection there was the ever
present danger that a crop failure, a war abroad, or a serious disturbance
in the coffee market would bring, immediately, financial difficulties to the
government. Naturally a bad year would be reflected in any sort of tax
system but there is a considerable lag between a depression and its reflection
in internal revenues while there is no lag at all where revenues are
based on export taxes. Thus Government gains time to move wisely in its
measures for betterment and is not under stress of emergency as was the
case last December after the world-wide break in coffee values. On the
other hand any change involving reduction in the export duties necessarily
meant finding other sources of revenue. Efforts were made from time to
time in the direction of such a change. The formation of the Internal
Revenue Service, for example, had as its avowed objective the reduction of
export duties .Dn coffee. Internal taxes, however, and particularly excise
taxes, were not popular and the Internal Revenue Service has not succeeded
in carrying internal revenues to a level sufficiently high to permit the
abolition or substantial reduction in coffee duties, and at the same time
maintain the budget at the necessary level. Collection of revenue by means
of the export duty on coffee while world prices were good was the easier
way, and governments cannot readily relinquish easy sources of revenue
when the alternative is the enforcement of unpopular taxes. In short, it has
proved impossible to enforce those drastic measures needed to develop





HAITI: REPORT OF FISCAL REPRESENTATIVE


sufficiently new sources of revenue in replacement of the export duties
notwithstanding the wide-spread benefit of such a shift in the incidence of
taxation.
When Brazil gave up its valorization plan in November 1937, coffee prices
fell to a point at which exporters could not pay the export tax and still
move coffee out of Haiti. There was then no alternative and no time for
adjustments that could be hoped to compensate the loss. Without the
purchasing power which Haiti derives from coffee sales the import trade
must have been restricted to an extreme degree. In fact, both the import
and export trade had been brought close to ruin and the government
meanwhile was depending upon customs duties for more than 80 per cent
of its normal revenues. Recognizing the emergency it faced, the government
took immediate measures to decrease the coffee export duties. The first
executive order published November 29, 1937, reduced the export duties
by Gde. .10 per kilo for the months of December and January, only. This
was merely to gain the time necessary to study and determine the extent
and probable duration of the price drop. It was still hoped that the market
condition might be more or less temporary and that some agreement among
the larger coffee producing countries would bring prices back to better
levels. It was soon apparent that this would not happen, at least during the
fiscal year, and also clear that the first reduction of Gde. .10 per kilo was
insufficient. On January 10, 1938, a further reduction of Gde. .05 per kilo
was put into effect and the period of application was extended to September
30, 1938. Before any reduction was made Haiti's export tax was
graduated from Gde. .15 per kilo for type 1 coffee to Gde. .30625 per
kilo for types 4 to 7. Under the rates put into effect January 10, 1938
coffee of type 1 was made exempt from duty. The duties on type 2
amounted to Gde. .05 per kilo; type 3, Gde. .10 per kilo, and types 4 to 7,
Gde. .15675 per kilo. By a law dated September 22, 1938 lowered duties
on coffee became a part of the permanent tariff. The new schedule of duties,
which varied but little from those prevailing under the decree law of
January 10, was as follows:
Per kilo
Gourde
Coffee of type 1......................................... 0.03
Coffee of type 2......................................... 0.05
Coffee of type 3................................... 0.10
Coffee of type 4 to 7.................................. 0.15675

In so far as the Government in the future becomes less dependent upon
revenues derived directly from an export tax on coffee, it can be said that
permanent benefit has remained to Haiti out of the emergency measures
taken to meet the crisis brought about in November 1937 by the catastrophic
drop in coffee prices. However the Haitian Government under present
conditions has not, as yet, succeeded in meeting its contractual obligations
in full and balancing its budget, and no tax structure can be considered to





HAITI: REPORT OF FISCAL REPRESENTATIVE


be a satisfactory one while this situation continues. It is of course recog-
nized that for so long as coffee is Haiti's principal product of exportation,
and while economic conditions are influenced as at present by the size and
value of the coffee crop, government revenues must continue to be sensitive
to it, but revenue receipts should not be allowed again to fluctuate as
formerly because of the easy reliance on export taxes.
Aside from the possibility of greater stability in Government revenues if
a successful shift be made from such a large dependence upon export duties,
there are other, and perhaps even greater, advantages.
Most countries have not looked upon export taxes as the best means of
raising revenues. It is reasoned that the burden of export taxes tends to
diminish the production of export commodities. Such taxes handicap
commodities in the hard competition of world markets. It is better
economic and better fiscal policy to encourage production, and secure the
government's income from taxes upon the resulting wealth. In the tax
system of Haiti this means, from import duties to a great extent. There is
not much contention as to the validity of this argument in most countries.
In some it is accepted as axiomatic.
Still, it was argued in Haiti until recently, that these considerations did
not apply here, that there was no evidence that export taxes on coffee were
retarding coffee production. The Haitian peasant was supposed to pick
whatever coffee the untended and uncultivated trees produced and bring
it to market for whatever price was offered him. If it were low he was
supposed to make no very conscious effort to abandon coffee and invest in
other crops. He had no costs to consider. If the price happened to be
high it was assumed he would not, for that reason, make any great effort
to increase his coffee production by additional planting, and indeed the long
continued dead level of Haitian coffee exports did support these easy views.
In more recent years it has become evident that these ideas are not
accurate, at least in so far as decreasing production is concerned. Large
numbers of peasants now are known, while low prices have been prevalent,
to have destroyed their coffee trees and planted bananas, beans, or other
crops. Furthermore during recent years it has become evident that the
peasant will not harvest the coffee crop as readily when he considers his
return too low for the hard physical labor involved. Estimates of production
in 1937-1938 placed the probable crop at 30,000,000 kilos. Export statistics
show 25,000,000(kilos were marketed. What proportion of the difference
is attributable to neglect of the harvest on account of the low price offered
can not be known. It certainly was a factor.
Failure to look at the tax problem from the peasant's point of view had
Perhaps continued already too long. Reduced coffee duties at this late date
'may not be sufficient to overcome the understandable indifference of the
Peasant to coffee production, unless other measures are taken to insure that





58 HAITI: REPORT OF FISCAL REPRESENTATIVE

the peasant gets a fairer return from his product. Certainly the time has
arrived when the government is wise to take an active interest in the
returns to its coffee producers and this interest is being taken.
While one may be convinced that the low prices offered the peasant have
tended to induce indifference to coffee production and led him to destroy
trees and neglect harvests, it is not so clear that the peasant would be
induced by tariff reduction merely, to take positive measures to increase
production. In fact it is a practical certainty that if left to himself the
peasant will not plant very substantial additional areas to coffee or attempt
systematic coffee plantation. .The habits inculcated by a hundred years of
repetition are opposed. Increased production by the present coffee growers
is to be expected only if actively striven for by the government. The
government must show them how to increase production and quality and
prove that it is worth the producers while to do it.
The reduction in coffee export duties makes development of coffee plant-
ations in Haiti a far more attractive proposition to those who might be
interested in making capital investments. The possibility of such develop-
ment is not remote. Excellent areas in high altitudes are available for the
production of quality coffee-coffee which will not be in competition with
average coffees from other countries. Climatic conditions in Haiti's higher
altitudes are ideal for coffee development.- To these considerations should be
added the fact that Haiti has an abundant supply of the cheapest and best
agricultural labor in the western world and that the Government is alive to
the interest of its people in the development of the export production of
the country.
In line with the reduction in coffee duties, but not of such far-reaching
importance, was an executive order published November 25, 1937, by which
the former measure suspending the collection of export duties on logwood
and logwood roots was extended for an additional year. Likewise the
former measure suspending the export duty of six cents per 100 pounds
on raw sugar and eleven cents per 100 pounds on refined sugar was con-
tinued in effect for an additional two years by an executive order dated
May 12, 1938.
Coincident with the first reduction in export duties on coffee was an
executive order, December 1, 1937, increasing the surtax on import duties
from 10 to 20 per cent. Revenues continued to fall, however and on
January 13, 1938, an upward revision of the import tariff was made.
Increased rates were made effective on cement; kerosene; many manu-
factured articles of iron and steel, as well as structural iron. Duties were
likewise increased on lumber and certain leather goods. Higher rates were
placed on importations of fish, rice, meats, and on common soap.
Very few reductions have been made in the import tariff during the year.
The duties on insecticides and fungicides were removed to aid in controlling
plant diseases. Reduced duties were also put into effect on malt beverages.


I





HAITI: REPORT OF FISCAL REPRESENTATIVE


It was felt that the rates were so high as to discourage consumption and
also there were inequities in the rates which discriminated against importers
of beer in metal cans and bottles.
By a decree-law published September 22, 1938, duties were removed on
X-Ray machines to encourage their use in the medical profession. By the
same decree-law the duties on ordinary ice boxes were reduced to bring the
duties into line with those levied on electric refrigerators.
The most important reductions in import duties during the past fiscal
year were those resulting from the new commercial treaty with France.
These have been noted in detail in the section on Commercial Conventions.

Customs Administration
Low revenues during the year necessitated economies in all government
services. The customs service was no exception. In customs administration
the necessary economies were effected by a decrease in personnel, and by a
reduction in the salaries of all customs officials and employees during the
last five months of the fiscal year, It is believed that these measures were.
effected without loss of efficiency in the customs organization. The morale
of the organization continued to be excellent and the additional duties placed
upon some officials and employees by the decreases in personnel were
willingly assumed.
Periodical inspections of the various customs houses were carried on
throughout the year by the resident inspectors and by inspectors from Port-
au-Prince. Various minor deviations from authorized administrative pro-
cedure and practice were discovered and corrected in the course of these
inspections, but in only one case irregularities grave enough to merit dis-
ciplinary action were brought to light. In this case, the offender was dis-
missed from the service.
In connection with efforts to encourage better preparation of coffee, stress
was laid during the year upon proper classification of coffee types under
the standardization law, which provides a lower rate of export duty upon
the better types of coffee.
There was no relaxation, during the year, in efforts to suppress smuggling.
A large number of arrests were made and in most cases convictions were
obtained. However, the penalties imposed have been light and insufficient
to discourage other violations.
Returning passengers continue to attempt evasion of customs duties
despite the fact that in most cases, we believe, they are detected.
In general the smuggling operations uncovered during the year were of
minor importance, and did not appear to be the work of extensive contra-
band organizations. A particular contraband problem worthy of mention
was presented during the year by the small sailboats plying between Haiti
and neighboring islands, where certain articles, especially silk goods, can






HAITI: REPORT OF FISCAL REPRESENTATIVE


be purchased at prices which make smuggling into Haiti an alluring contra-
band proposition. It is believed that the measures taken have been sufficient
to check, although unhappily not to stop entirely, their operations.
There is every indication that the cooperation of the Garde d'Haiti and
increased activity of customs agents have diminished contraband operations
over the Haitian-Dominican frontier.

Internal Revenue Inspection Service
Under the agreement of August 7, 1933, it is the duty of the Fiscal
Representative to inspect the activities of the Internal Revenue Service and
make appropriate recommendations for its proper operation. These func-
tions are carried out by the Internal Revenue Inspection Service operating
as a division of the Office of the Fiscal Representative.
The activities of the Inspection Service were increased somewhat during
the year when the Registration Bureau which had been operating as a
separate organization under the Department of Finance was retransferred
to the Internal Revenue Service. Inspection of the recording and registra-
tion of documents was added to the routine inspection of collection bureaux,
distilleries, and factories producing products subject to excise taxes.
A complete report by the Inspector General of the activities of the Ins-
pection Service is annexed to this report.


Government Revenues

Total Revenues
Government revenues from all sources totalled Gdes. 28,109,488.87 during
the fiscal year 1937-38. In the preceding fiscal year revenues totalled Gdes.
34,448,671.19. Revenue receipts therefore declined during the year under
report by Gdes. 6,339,182.32 or by 18.1 per cent.
The estimate of ways and means at the beginning of the fiscal year
predicted revenues of Gdes. 32,936,000. This seemed to be a conservative
estimate. Revenues in the preceding year had exceeded Gdes. 34,000,000.
Crop prospects at the beginning of the year were excellent. In October,
the first month of the fiscal year, coffee exports exceeded those of the pre-
vious year by nearly a million kilos; foreign commerce in value exceeded
that of the corresponding month in the preceding year by two million gour-
des; government revenues from all major sources except the import
tariff were greater than in the preceding year; and government expenditures
were less. It is true commodity prices were declining but still seemed high
enough to sustain foreign commerce at a high level. Treasury reserves at
the beginning of the fiscal year were nearly as great as they had been the
year before.





HAITI: REPORT OF FISCAL REPRESENTATIVE


These excellent prospects were short-lived, however. In November, Brazil
abandoned its coffee price-fixing policy and the resulting collapse of coffee
prices changed the outlook immediately and completely. Every category
of revenue was more or less affected and what was only too evident was
the state of business-both foreign and domestic commerce had collapsed.
It became evident from decreased revenues in November and December
that revenues for the year would fail to reach estimates by some four to
five millions of gourdes and that reserves would be inadequate to meet the
situation. Faced with a badly unbalanced budget exceptional measures
were necessary.
The measures taken to retrench expenditures will be considered later on
in this report. The following measures were taken to increase revenues or

CHART No. 5
TOTAL REVENUE RECEIPTS OF HAITI AND EXPENDITURES FROM REVENUES
FISCAL YEARS 1916-17 TO 1937-38
MILLIONS OF 6 OURDES
.so-- II I I I



IEVEHUVt/' ] .XP EN/oJTU ES













check their declines so far as that should ble possible: 1) Reduction in coffee
export duties to approximately one-half of those in effect was made to
partially compensate the price decline and to permit coffee to continue to
10 ---------___________-- -- ------------------






be exported; 2) The surtax on import duties was increased from 10 per
cent to 20 per cent; 3) increases were made in the import duties on a large
number of import commodities particularly soap, kerosene, lumber, cement,
manufactured articles of iron and steel, and fish; 4) a change in the basis
of the salt tax was made to discourage contraband; 5) upward revision of
the irrigation tax was made; 6) measures were taken providing for the
collection of identification card receipts, automobile license fees, and drivers'
license fees as government revenues (instead of communal revenues as






HAITI: REPORT OF FISCAL REPRESENTATIVE


theretofore); 7) another measure provided for the direct collection of vital
statistics fees and increased the treasury's share of the fees. All of these
measures as well as those taken to decrease government expenditures are
discussed in greater detail in appropriate sections of this report (See the
chapter on the Budget and Financial Legislation, Tariff Modifications,
Government Expenditures, etc.).
As stated above the original estimate of ways and means was Gdes.
32,936,000. Revenues collected during the fiscal year amounted to Gdes.
28,109,488.87. Actual revenues were therefore Gdes. 4,826,511.13 less than
the original estimate.
Chart 5 shows the movement of revenues and expenditures from the
fiscal year 1916-17, to the fiscal year 1936-37. The year under review is the
first fiscal year since 1921-22 in which revenues have dropped below Gdes.
30,000,000, with the exception of the mid-depression year 1931-32.
Another fact brought out clearly by the chart is the relatively narrow
spread between revenues and expenditures since the start of revenue declines
following the peak year of 1927-28. The exception is the year 1934-35 when
government disbursements increased strikingly in a year during which
revenues declined. In that year, nearly half of the spread between revenues
and expenditures represented the five million gourdes paid as the purchase
price of the Banque Nationale de la R6publique d'Haiti. This expenditure
from treasury reserves was an investment rather than an operating expense
although the item is included in total government expenditures .for ac-
counting purposes.
SGovernment revenues in 1937-38, classified by sources were as follows:
1937-38 1936-37
Gourdes Per cent Per cent
S Customs:
Imports ...................................... 17,607,360.82 62.6 60.0
Exports .................................... 4,907,527.06 17.4 23.3
Miscellaneous Customs ............. 79,424.49 0.3 0.2
Internal Revenues ............................ 4,990,787.28 17.8 14.4
Miscellaneous Government Receipts.... 287,871.79 1.0 1.3
Receipts from Communes*.................. 236,517.43 0.9 0.8
Total revenues.......................... 28,109,488.87 100.0 100.0

During the fiscal year receipts from imports accounted for 62.6 per cent
of total revenues while export revenues were 17.4 per cent. In the previous
year the corresponding percentages were 60 and 23.3 respectively. The
change in the relative position of import and export revenues is of course
due to the decreased rates of the coffee export duties. Under the present
tariff schedules the change in relative position of returns from import duties
and export duties should become even more pronounced. That the change


*The amounts represent payments by various Communes to defray cost of services rendered by the Internal
Revenue Service in the collection of Communal revenues.





HAITI: REPORT OF FISCAL REPRESENTATIVE


was not greater during the fiscal year under review, was due to the fact that
imports were far below normal, and the decreased duties on coffee were not
in effect during the full fiscal year.
The percentage of total revenues derived from internal revenues increased
more because of the drop in total revenues than because of increased internal
revenue receipts, since the amount of internal revenues in gourdes collected,
only increased by .5 per cent over the previous year, while the percentage
of total revenues derived from internal revenue sources increased from 14.4
in the preceding fiscal year to 17.8 in 1937-38.

Customs Receipts
;Total receipts from customs sources in 1937-38 amounted to Gdes. 22,-
594,312.37. In the previous fiscal year total customs receipts were Gdes.
28,742,872.82. In comparison, therefore, with the previous year there was
a decline of Gdes. 6,148,560.45 or 21.4 per cent.
Receipts derived from the import tariff in the fiscal year 1937-38 amount-
ed to Gdes. 17,607,360.82 as compared with Gdes. 20,659,893.06 derived from
the import tariff in the prior fiscal year. Receipts from the import tariff,
accounted for 77 per cent of total customs revenues.
Although the surtax on import duties was increased from 10 per cent to
20 per cent during the year, this increase could be only partially effective
because of the provision in the American-Haitian Commercial Convention
fixing the then existing (June 3, 1935) schedules on certain articles. These
schedules likewise apply to importations from all countries having treaties
with Haiti containing the most favored nation clause.
Receipts derived from the export tariff in 1937-38 amounted to Gdes.
4,907,527.06. In the previous year Gdes. 8,020,007.37 had been collected in
export duties. Export duties accounted for 21.7 per cent of total customs
in 1937-38, while in the prior fiscal year export duties had been 27.9 per cent
of total customs revenues. Export revenues of Gdes. 4,907,527.06 for the
fiscal year just ended are the lowest on record. The record goes back to the
fiscal year 1911-12 when export revenues of the country were first segregat-
ed from import revenues. The decrease in export revenues is accounted for
tby the decreased rates on coffee since export duties on other important
products have long since been reduced to more or less nominal amounts.
Duties on sugar and logwood are suspended. Duties on cotton, bananas, and
sisal amount to little. Despite the reduced rates, coffee duties still accounted
fo- over 90 per cent of all export duties in 1937-38. In the preceding year
the quantity of coffee shipped was about the same as in the fiscal year 1937-
38 but export duties derived'from coffee then amounted to Gdes. 7,550,641.
In the fiscal year under review duties on coffee, after the rates were more
than halved for the last three-fourths of the fiscal year, amounted to Gdes.
4,471,945.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Export revenues by sources were as follows in 1937-38 and 1936-37:
1937-38 1936-37
Gourde& Gourdes
Coffee ............................ 4,471,945 7,550,641
Cotton .......................... 99,344 114,935
Sisal ................................ 103,077 88,617
Bananas ........................ 100,300 91,651
All other ...................... 132,861 174,161
4,907,527 8,020,005

Internal Revenue Receipts
The present Internal Revenue Bureau was inaugurated in 1924 for the
dual purpose of stabilizing government revenues through diversification ofi
revenue sources and increasing total revenues to a level which would make
possible a reduction in the export duties on coffee. It was hoped and pre-'
dieted that the time would come when internal revenue would equal or
exceed customs duties. Customs revenues at the time the Internal Revenue|
Service was formed, supplied about 90 per cent of total revenues, causing!
the then General Receiver to describe Haiti's public economy as the worst
balanced in the world.* During the first full fiscal year of its existence over!
four million gourdes were collected by the new service. The fiscal year
just passed marked the 14th. year of the existence of the Internal Revenue
Service and yet less than five million gourdes were collected. A study of
the interim period shows that the Bureau made progress towards increasing
revenues only until the sixth year of its operation, reaching the high point
in collection in 1929-30, when a total of Gdes. 6,620,164.04 was attained.
The showing of the present internal revenue system of Haiti is poor
indeed when it is considered that approximately a third of the amounts
collected are charges for services rendered by the state and in a more strict
sense are in the nature of reimbursements to the state. Such for example,
are telephone and telegraph receipts, and charges for water service from
the state owned and operated water systems. Irrigation taxes come in this
category, as well as charges made by the post office.
It was stated above that the Service made progress towards the goal
for which it was created during its first six years only. The amount of six
million six hundred thousand gourdes collected during fiscal year 1929-30
has never since been equalled. An analysis of collections shows that the
decline in internal revenues coincided with giving up manufactured tobacco
and alcohol as important sources of internal revenue.
However, declines in internal revenues from existing sources, particularly
from excise revenues, have been accepted and new sources of revenue are
constantly sought to replace the declining ones. Thus in the fiscal year;
1929-30 when excise taxes were limited to alcohol and tobacco productsI
excise receipts amounted to two and three quarter million gourdes overi

*Annual Report 1926-27. page 65.






HAITI: REPORT OF FISCAL REPRESENTATIVE 65

40 per cent of all internal revenues). Total excise duties in the year under
review amounted to little over one and a quarter million gourdes, although
the excise list has been expanded from alcohol and tobacco products to
include excise taxes on salt, matches, vegetable oil, lard substitutes, soap,
and at times, gasoline. If this trend continues at least Haiti will have, a
wide diversification in its internal taxation; but so many taxes are costly
of collection and as a matter of world wide expert opinion fewer taxes
are in the end more satisfactory and less burdensome.
Total internal revenue receipts in the fiscal year just ended amounted to
Gdes. 4,990,787.28. In the preceding fiscal year Gdes. 4,964,672.98 were
collected. The increase is slightly over one-half of one per cent. The-yield
from the new sources of revenue transferred to the internal revenue service
in January was: ourad
Identification Card Tax.......................... 118,103.41
Automobile Licenses .............................. 98,254.75
Drivers' Licenses .................................... 54,535.79
State Land Denunciation...................... 4,245.00
275,138.95
To this amount is to be added approximately Gdes. 40,000 as the increase
in irrigation taxes attributable to the higher irrigation rate since January
1938; and Gdes. 49,000 for the increase in receipts from vital statistics fees
as the approximate amount attributable to the larger percentage of vit l
statistics fees paid into the treasury; and we then find that the measures
taken January 13, 1938 account for some Gdes. 364,000 in additional rev-
enues. After making these adjustments, revenues from sources existing
in the previous year declined by approximately Gdes. 339,000 during the
year under review from the total collected in the fiscal year 1936-37, or by
nearly seven per cent.
Returns from excise taxes during the fiscal year amounted to Gdes.
1,368,704.36. In the preceding year excise sources produced Gdes. 1,618,-
896.89. The following table will show the relation of excise taxes to other
taxes collected. Excise Other Internal Total
1924-25............ ................ 4,089,926.10 4,089,926.10
1925-26 ............... ................ 4155,170.28 4,155,170.28
1926-27 ............... .............. 4,163,287.97 4,163,287.97
1927-28............. 61,738.65 4,179,881.49 4,241,620.14
1928-29........... 2,263,818.37 3,771,446.43 6,035,264.80
1929-30............... 2,732,478.75 3,887,685.29 6,620,164.04
1930-31........... 1,889,942.34 3,270,470.99 5,160,413.33
1931-32............ 1,178,076.27 2,752,830.02 3,930,906.29
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
1937-38................... 1,368,704.36 3,622,082.9)2 4,990,787.28
Individual sources making up the excise group declined during the fiscal
year from the amounts collected in the previous fiscal year, as follows:






HAITI: REPORT OF FISCAL REPRESENTATIVE


(1) Alcohol taxes on distilleries declined from Gdes. 321,659.77 to Gdes.
305,903.05. (2) The receipts from malt beverages declined from Gdes. c
18,397.68 to Gdes. 4,648.09. The amount collected represents the internal
revenue receipts prior to January 11, 1938 on which date they were abolish-
ed. Up until the fiscal year 1934 a brewery was operated in Haiti and an
internal revenue duty was collected upon imported malt beverages to
equalize the internal revenue tax paid by the local brewery. Since the
brewery has ceased to operate and since all malt beverages now used are
imported and are subject to customs duties it was felt that a consolidation
of the internal tax and customs duty was advisable. (3) Receipts from the
taxes on vinous liquors declined chiefly because of the new French treaty
effective July 11, 1938 in accordance with which internal revenue duties
were no longer applicable to French wines. In the preceding year returns
from vinous liquors were Gdes. 49,881.58 and in the fiscal year under review
dropped to Gdes. 37,361.59. (4) Returns from cigarettes dropped from Gdes. 1
556,037 in 1936-37 to Gdes. 445,339.45 in 1937-38. (5) In the preceding
fiscal year Gdes. 25,530.66 had been collected on gasoline. This represented
returns from an internal tax on gasoline in stock at the time an increase
was made in the customs duties. After payment was made on such gasoline
as was in stock at the time the tariff rate was changed, the law had no
further application. (6) Receipts from the tax on vegetable oil decreased
from Gdes. 249,363.23 to Gdes. 245,313.98; (7) on lard substitutes fro t
Gdes. 195,903.82 to Gdes. 150,612.01; (8) and on salt from Gdes. 114,650.45
to Gdes. 95,199.54. (9) The returns from the tax on manufactured tobacco
decreased from Gdes. 35,013.18 in the preceding year to Gdes. 24,935.37.
Decreases from this source are not new. This is the source of revenue
which in 1929-30 yielded Gdes. 672,441.56 and which has declined to the
meagre yield of Gdes. 24,935.37 for the year under review.
Excise taxes were first put into effect in 1927-28. Until the fiscal year
1932-33 excise revenues were limited to receipts from alcohol and tobacco.
In that year an internal revenue tax on gasoline (since discontinued) was
put into effect to check falling revenues. In the same year salt was added
to the excise list. Since that year excise taxes have been levied on vegetable
oil, lard substitutes and soap. The following comparison will show the
relation of excise derived from alcohol and tobacco taxes to other excise
revenues:
Tobacco and Alcohol All Others Total Excise
1928-29.................... 2,263,818.37 .................. 2,263,818.37
1929-30.................... 2,732,478.75 .................. 2,732,478.75
1930-31.................... 1,889,942.34 ................. 1,889,9.42.34
1931-32.................. 1,178,076.27 1............... 1,178,076.27
1932-33................... 1,137,028.99 707,405.21 1,844,434.20
1933-34.................... 1,093,807.64 710,731.15 1,804,538.79
1934-35.................... 964,496.63 414,671.98 1,379,168.61
1935-36................. 757,432.38 656,140.18 1,413,572.56
1936-37.................... 992,715.16 626,181.73 1,618,896.89
1937-38.................... 828,722.04 539,982.32 1,368,704.36






HAITI: REPORT OF FISCAL REPRESENTATIVE 67

The above table will show clearly that the fiscal year 1930-31-the year
of new alcohol and tobacco legislation-was the line of demarcation
between high and low returns from alcohol and tobacco taxes. Neither
addition of new excise sources nor substantial increases in the rates on
cigarettes have made up for the loss of revenues from alcohol and manu-
factured tobacco. Had those interested in the manufacture, distribution,
and sale of products taxed benefited from the changes in legislation largely.
responsible for this loss to the state, there would be a measure of satis-
faction to be found, but if anything, the exact contrary is the case. Less
control and lowered taxes have encouraged the maintenance in casual
operation of establishments-that cannot operate at a profit yet which ruin
the business of those which could. In the case of tobacco, the producer
and manufacturer, caught between contraband tobacco on one hand and the
lack of any real government control of quality and market on the other,
have given up trying to continue in business and except for use in the
manufacture of cigarettes there is little market for tobacco grown in Haiti.
The peasant cultivator grows enough leaf to smoke raw and has no
further interest. The one or two foreign capitalized plantations have long
since been abandoned.
During the years when receipts from alcohol were high, that is, during
the fiscal years 1928-29 and 1929-30, the alcohol tax was Gdes. 0.30 per
liter of alcohol produced of 230 Cartier or under, (over 230 Cartier the
tax was Gde. 0.45). In 1931 the alcohol law was revised and the tax per
liter of alcohol produced was discontinued. The new law provided that
each distiller from cane juice should pay a monthly tax of Gdes. 50 for
each "point de chaudiere" of his distilling apparatus during those months
or portions of a month in which his distillery is not closed with permission
of the Internal Revenue Service. A "point de chaudiire" is defined in the
law as "the amount of alcohol of 200 Cartier that an intermittent jet
apparatus having a capacity of 225 liters produces per day."
Since 1931 the tax has been on the capacity of distilling apparatus and
consequently no figures are available as' to the quantity production of
alcohol in Haiti. It cannot be stated, therefore, with any close degree of
accuracy just what returns could now be expected from a return to the
former basis of taxation. One thing, however, is clear-if alcohol is to
become again an important source of revenue to the State either a return
must be made to the former basis of taxation or else the monthly tax of
Gdes. 50 for each "point de chaudiere" must be greatly increased. The only
other alternative would be trying some new system for taxation of alcohol.
None has been suggested.
Taxation of tobacco in Haiti has presented some peculiar problems. At
the time the first excise law was enacted manufactured tobacco was used






HAITI: REPORT OF FISCAL REPRESENTATIVE


to a great extent. The manufactured product known as black tobacco was
a blend of Haitian and imported tobacco. After manufactured tobacco was
taxed a shift occurred in the form in which tobacco was consumed by the
mass of the population. The explanation of this involves a discussion of
raw leaf tobacco, and how it came to be so widely used. The first excise
law, that of August 13, 1928 provided that raw leaf tobacco in the possession
of the grower should be exempt from tax. It was soon noticed that this
exemption decreased the efficacy of tobacco control and was being used
as an instrument for evasion of the tax, since raw leaf frequently found its
way out of the grower's possession, and was used in the raw form or
prepared for use by the simplest of processes. It was accordingly recom-
mended to the government that this loophole be eliminated. The legis-
lature, in the revision of the excise law which it made in 1931, did not
accept the recommendation but rather proceeded in the opposite direction.
For not only did the new law maintain the exemption from taxation of
raw leaf tobacco, but removed the limitation that such tobacco must be in
the possession of the grower. Raw leaf tobacco therefore could circulate
freely and its use supplanted the taxed package of black tobacco turned
out by the factories to such an extent that raw leaf tobacco has now become
almost exclusively the form in which tobacco is used by the mass. of the
population.
It is doubtful that there has been any appreciable decrease in the quantity
of tobacco used in Haiti since the years when the tax from manufactured
tobacco returned its largest amounts. The use of tobacco is about as wide-
spread here as it is elsewhere and the tendency is for tobacco consumption
to increase in countries which like Haiti have a rapidly increasing popu-
lation. It is possible, therefore, that the returns from tobacco taxes could
be restored gradually as the purchasing power of the people again improves.
Tobacco taxes would be unpopular when first imposed as they were in
the past. Consequently, due consideration would have to be used in selecting
a time when they could be imposed again with the least opposition. Certain-
ly tobacco is a proper source of revenue, certainly revenue is needed, and
certainly those interested in tobacco growing and its manufacture and
sale could only benefit from a reasonable state control.
To make tobacco taxation effective, the internal revenue service would
have to control raw leaf tobacco and such control would necessarily have
to start at the tobacco plantations. The efforts of the internal revenue
service would have to be greater than would be involved were it is possible
to confine activities to making collections at a few tobacco factories. Never-
theless, tobacco taxation is a potential source of revenue which, judging
from experience, could yield well over a half million gourdes annually.






HAITI: REPORT OF FISCAL REPRESENTATIVE


Important sources of internal revenue other than those discussed above
did not fluctuate in yield to any great extent from the amounts recorded
in the preceding fiscal year as the following comparison will show:
1937-38 1936-37
Income taxes .......................... 475,877.48 461,739.83
Telegraph & Telephone receipts 472,000.28 499,521.41
Documentary.stamps...................... 421,520.50 489,521.33
Registration fees ...................... 334,065.83 320,105.51
Public Land rentals.................. 331,311.61 344,830.97
Occupational license fees.......... 302,038.78 318,047.91
Water service rents.................. 283,241.25 285,090.75
Postage stamps ........................ 252,765.00 225,225.78

Income tax returns were slightly better in 1937-38 than in the preceding
fiscal year. Unfortunately the increase cannot be taken as reflecting better
business conditions. Too many of Haiti's business concerns pay this tax
on the basis of the rental value of their properties rather than upon the
basis of profits actually realized to make this tax a reliable barometer of
business conditions.
Receipts from the state owned telegraph and telephone systems declined
for the year under review as compared with the previous year. Receipts
amounted to Gdes. 472,000.28. Expenditures for maintenance of the service
amounted to Gdes. 444,081.62 during the year.
The Postal Administration as usual failed to cover expenses. Receipts
from the sale of postage stamps and post office box rentals amounted to
Gdes. 261,478.90 for the year while expenses of the postal administration
amounted to Gdes. 302,719.85. This was relatively a better showing than
in the previous year when receipts were only Gdes. 233,917.50 and expenses
were about the same as in the year under review-Gdes. 301,296.54. The
better showing in receipts from the sale of postage stamps (Gdes. 252,765.00
in 1937-38 as against Gdes. 225,225.78 in 1936-37) is due to increasing use
of the air mails. Boat transportation facilities during the year between
New York and Port-au-Prince were curtailed and correspondingly greater
use of the air mail facilities was made.
Receipts from municipal water systems totalled Gdes. 283,241.25 which
amount was only a slight decrease from the amount of Gdes. 285,090.75
collected in the previous year; while cost of maintenance was Gourdes
241,863.53 in 1937-38 as compared with Gdes. 260,874.91 expended in the
previous year by-the Hydraulic Service.
Land rentals is a source of revenue from which much was expected in
the past. The internal revenue service undertook the administration of the
private domain of the state during the fiscal year 1926-27. The situation
brought about by periods of confusion, destruction of public records, and
inadequately kept records made it extremely difficult to say just what
assets in the nature of state owned lands Haiti really possessed. Gradually
the Internal Revenue Service began untangling state owned lands from
Privately owned lands and increased the rent rolls of the state. The follow-






70 HAITI: REPORT OF FISCAL REPRESENTATIVE

ing year-by-year comparison of rents collected will show what progress was
made:
Year Gourdes Year Gourdes
1925-26................. 191,390.71 1932-33.................. 369,430.98
1926-27.................... 213,851.77 1933-34.................. 389,872.46
1927-28.................... 268,626.01 1934-35.................... 345,618.91
1928-29........................ 270,005.83 1935-36 .................. 332,881.27
1929-30.................. 267,436.07 1936-37.................... 344,830.97
1930-31.................. 223,460.58 1937-38.................... 331,311.61
1931-32.................. 278,661.66
The above will show that increasing rentals were obtained until 1933-34.
Since that date returns have decreased. One of the reasons for the decrease
has been the homestead law passed in 1932, under which occupants of rural
properties, after fulfilling certain requirements of cultivation and residence,
may obtain title to a limited amount of land. A recent compilation of lands
homesteaded shows that about 1,000 hectares have been taken up by home-
steaders. Considering the low rentals charged on rural properties the
amount of land homesteaded cannot account completely for the change
from an upward trend in land rentals, assuming that the addition of state
lands to the cadastre is continued.
A second and important reason for lower receipts in recent years has been
that for several years the Internal Revenue Service did not take the
measures provided in the law on state land rentals to collect from those
neglecting or refusing to pay rent. After permitting back rentals to ac-
cumulate over a period of several years the procedure has been followed
in certain districts of accepting a part of the amount due in full settlement.
Still another method has been used, namely, permitting the lessees to pay
the current year's rental and to disregard back rentals. Some lessees paid
under one or the other of these arrangements but since in any case the
procedure was not invoked to recover properties from non-paying tenants
obviously the most advantageous thing to do, from the point of view of the
tenant, was not to pay at all but await expiration of the prescription period,
recognized as the limit of time within which the Internal Revenue Service
would proceed against delinquents.
This method of tax enforcement encourages neglect and refusal to pay
taxes. Why should a person pay his taxes promptly and in full when his
neighbor by simple delay brings it about that he pays only a fraction of
the tax or perhaps nothing at all?
It was advanced in explanation and justification that the interest of agri-
cultural development was not served best when peasants were dispossessed
from lands they were cultivating. Furthermore drought or crop failure for
some reason or other made the position of the farmer difficult. It is true
that this has been the case to a certain extent but the contention loses much
of its force when it is considered how great a proportion of land rentals
comes from the rental of houses and lots owned by the state in urban
districts rather than from rural lands.





HAITI: REPORT OF FISCAL REPRESENTATIVE


It is admitted that the above criticism had more application to practices
in recent fiscal years than to the year under review. When revenues began
declining seriously in the early part of this fiscal year a more strict attitude
towards enforcement was taken by the Internal Revenue Service. But inter-
mittent efforts in tax enforcement are not as effective as the pressure of
constant and impartial enforcement. Application, steadily made, of every
provision in the tax laws tends to induce in the mind of the taxpayer the
psychological attitude that taxes are something which must be paid at the
time due; while alternating strict enforcement with leniency induces in the
mind of the taxpayer the attitude that taxes are at most contingent debts
which the taxpayer may some day compromise or which he may even never
be called upon to pay.
Miscellaneous Receipts
Miscellaneous receipts of the government totalled Gdes. 287,871.79 in
1937-38 as compared with Gdes. 463,619.25 in the fiscal year 1936-37. Mis-
cellaneous receipts, therefore, declined by Gdes. 175,747.46 or by 38 per
cent when comparison is made with the preceding fiscal year.
Miscellaneous receipts may be classified (see Table 37) into three groups
as follows:
Gourdes
Return on Investments............................ 97,273.25
Conversion of francs................................ 99,096.70
Other miscellaneous.................................. 91,501.84
Total ............................................ 287,871.79
The first category includes returns on bond investments and interest on
government deposits in New York funds.
The decline in receipts from this source from Gdes. 244,823.94 in 1936-37
to Gdes. 97,273.25 for 1937-38 results from the fact that in the previous
year dividends from the Banque Nationale de la R6publique d'Haiti in the
amount of Gdes. 78,333.34 were included in the total, while there were no
miscellaneous receipts from dividends declared by the bank during the
fiscal year 1937-38; and secondly from the reduction in the amount of bonds
of the Republic held by the government. Total government investment in
bonds calculated at cost, dropped from Gdes. 650,239.10 at September 30,
1937, to Gdes. 527,780.00 at September 30, 1938. Included in the amounts
given above are bonds held by the Garde d'Haiti and bonds held for the
benefit of the agricultural colonies. Interest on those bonds does not appear
as miscellaneous receipts. The amount of bonds held by the government
on which interest was taken up as miscellaneous receipts stood at Gdes.
337,386.90 on September 30, 1938.
SUnder the second category above (Conversion of francs) receipts declined
from Gdes. 145,186.90 in 1936-37 to Gdes. 99,096.70 in 1937-38. This source
consists of interest on funds held in trustees hands for the benefit of the
bondholders of the 1910 loan when, as, and if, they choose to redeem their





HAITI: REPORT OF FISCAL REPRESENTATIVE


bonds. Interest on.the fund at the rate of 2Y2 per cent per annum is paid
to the Haitian Government in francs and converted monthly into dollars.
The decline from this source is due to two factors. The balance in the
franc account is constantly decreasing as bonds are redeemed, and secondly
there was a decrease in the amount of dollars received by the treasury in
the form of interest, caused by the decline during the year in the value of
the franc. There was a balance of Frs. 20,624,422.50 in the redemption fund
at September 30, 1938, as compared with Frs. 24,767,925 at September 30,
1937.
Other miscellaneous receipts consist of interest and amortization pay-
ments on treasury loans to communes, and funds reverting to the treasury
through prescription of unpaid treasury checks. Returns from "other
miscellaneous" sources increased from Gdes. 73,608.41 in 1936-37 to Gdes.
91,501.84 in 1937-38.
Receipts from Communes
Receipts from this source consist of a 15 per cent service charge on
communal receipts in those'communes where the revenues are collected for
the communal authorities by the Internal Revenue Service in reimbursement
of this expense to the Service.
Receipts totalled Gdes. 236,517.43 in 1937-38. In the prior fiscal year
receipts amounted to Gdes. 277,506.14. The decrease results from decreased
totals in communal revenues. Some decrease in communal revenues was
to be anticipated after the transfer to the national treasury of the returns
from automobile license fees and drivers' license fees, formerly sources of
communal revenues.
Government Expenditures
Government expenditures from revenue in 1937-38 totalled Gourdes
28,940,782.51. In the previous fiscal year government expenditures from
revenues amounted to Gdes. 35,033,437.11. Expenditures, therefore, declined
by Gdes. 6,092,654.60 or 17.36 per cent.
When it became evident early in the fiscal year that receipts would not
permit expenditures in the amounts carried in the 1937-38 budget, measures
were taken to curtail expenditures.
The most important of these measures from the point of view of balanc-
ing the budget was an accord between the Haitian and American govern-
ments made after conversations between the Haitian Government and The
Protective Council of Foreign Bondholders, reducing amortization pay-
ments on Series A and Series C bonds to Gdes. 100,000 during the period
from January 1, 1938 to September 30, 1938. By this measure the treasury
was relieved from payments during the fiscal year to the extent of Gdes.
3,963,114.45.
To effect economy the Department of Labor was discontinued as such,
and its functions absorbed by the Department of Public Instruction and





HAITI: REPORT OF FISCAL REPRESENTATIVE


i the Department of Agriculture. The latter Department is now referred to
: as the Department of Agriculture and Labor. The Registry Office was
h attached to the Internal Revenue Service and the appropriation for its
Ij separate maintenance was discontinued. A decree-law was promulgated
in reducing the budgets of expenditure for the following departments: Fi-
of nance, Commerce, Interior, Public Works and Justice. Economies in
id operation were requested of all departments. Personnel was reduced in
0, many services. Several departments and services found operation within
their new allotments necessitated salary reductions, which were accordingly
y- made. Finally in June a decree-law, effective during the remaining months
ry of the fiscal year (July, August and September), reduced salaries for all
er government employees whose salaries had not previously been reduced.
s. It goes without saying that extraordinary appropriations for the year
were only made in those cases of urgent need. Extraordinary appropriations
amounted during the fiscal year to only Gdes. 311,600.00. In the previous
year such appropriations has been Gdes. 1,484,236.20 and in the fiscal year
S1935-36 had been Gdes. 2,215,999.87. Supplementary credits totalled Gdes.
a 771,000.00, of which Gdes. 710,000.00 were voted for the Garde d'Haiti.
The above measures enabled the government to complete the fiscal year
with an operating deficit for the year of only Gdes. 831,293.64 despite the
-d fact that receipts for the fiscal year dropped Gdes. 6,339,182.32 when
compared with receipts in the prior fiscal year. The deficit was entirely
covered by treasury reserves.
Total government expenditures during 1937-38 by departments and
services, are given in the table which follows. Each item includes all dis-
bursements from ordinary, supplementary (or deficiency), and extraor-
dinary appropriations, together with the amounts by which expenditures
Were greater or less than those of the previous year.


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


Total Expenditures
1937-38
Gourdes
3,046,760.75
88,554.00
759,237.36
769,092.21
1,252,257.20
968,371.16
349,071.79
1,745,470.79
7,515,710.11
2,612,764.62
35,433.38
3,669,485.73
1,320,010.35
100,438.82
1,804,311.12
2,464,456.66
439,356.63


Total ................. ............... 28,940,782.51


Decrease from
1936-37
Gourdes
4,409,806.52
1,446.00
312,538.13
64,353.45
158,590.61
53,746.26
3,106.74*
199,321.47
671,817.30*
25,772.46
930.99
1,264,142.40
78,251.50
35,116.53
170,657.66
11,668.51*
4,573.17
6,092,654.60
net decrease


*Increase.






HAITI: REPORT OF FISCAL REPRESENTATIVE


The above table shows but three Departments and Services which re-
ported increased expenditures over the previous year, and of those increases
only that of the Garde d'Haiti was important in amount. The Garde d'Haiti
'is the only armed force in the Republic. It constitutes the police force as
well as Haiti's standing army. Expenditures of the Guard were increased
-during the fiscal year by the sum of Gdes. 671,817.30 for the purpose of
strengthening the Guard.
The expenditures of the Department of Public Instruction increased by
Gdes. 11,668.51. This increase is more apparent than real, it resulted from
the fact that the function of administering the technical schools was trans-
ferred to the Department of Public Instruction when the Department of
Labor was discontinued. Other functions of the Department of Labor
were transferred to the Department of Agriculture (now Agriculture
and Labor). The combined expenditures during 1937-38 of the two
reorganized departments i. e. Department of Public Instruction and
the Department of Agriculture and Labor, show a substantial decrease from
the expenditures recorded in the prior year for the three Departments,
namely Labor, Public Instruction, and Agriculture, which then covered the
same fields of activity now covered by the two.
The increase in expenditures of the Department of Commerce amounted
to only Gdes. 3,106.74.
All Departments and Services other than those discussed above show
reduced expenditures for the fiscal year in comparison with total expendi-
tures for the preceding year. Aside from reduction in the amounts expended
for service of the Series A and C loans, the largest reduction was that
effected by the Public Works Administration. Expenditures for the Public
Works Service decreased by Gdes. 1,264,142.40. Since all of Haiti's public
works in recent years have been financed out of current revenues or trea-
sury reserves, expenditures are necessarily limited to the revenues and
reserves available. Whenever revenues have permitted in past fiscal years,
expenditures for public works have been expanded, therefore when rev-
enues declined it was a natural direction in which to turn for retrenchment.
Supplementary (deficiency) credits were voted during 1937-38, and
extraordinary appropriations were made as follows:
Supplementary Extraordinary
Guard .......................................... 710,000.00 .........
Department of Foreign Affairs........ 36,000.00 115,000.00
Public Works Administration........ 25,000.00 133,350.00
Department of Finance.......... ... ................ 40,000.00
Agricultural Service ...................... ................ 18,000.00
Department of Religion.................. .............. 3,750.00
Department of Public Instruction.... ................ 1,500.00

771,000.00 311,600.00





HAITI: REPORT OF FISCAL REPRESENTATIVE


The appropriation in the amount of Gdes. 40,000 was opened in favor of
the Department of Finance for the purpose of repatriating Haitian citizens
living in the Dominican Republic.
Of the extraordinary credit totalling Gdes. 115,000.00 opened in favor
of the Department of Foreign Relations, Gdes. 40,000 were appropriated
to cover expenses of the commission sent to Washington in connection
with the Haitian-Dominican crisis which occurred at the end of 1937. The
sum of Gdes. 75,000 was appropriated for execution of a program of
improvement of coffee to meet coffee market demands.
Two extraordinary credits in favor of the Public Works Administration
amounted to Gdes. 133,350. Gdes. 33,350 were appropriated to cover the
cost of construction of the new steel bridge over Trois Rivieres. The other
extraordinary credit in the sum of Gdes. 100,000 opened in the Public
Works Administration was for the purpose of continuing work on the
international road along the Haitian-Dominican frontier in fulfillment of
Haiti's obligation under its arrangement for settlement of the Haitian-
Dominican boundary.
The total amounts spent or appropriated since July 1936 for expenses
of the Frontier Commission and for construction of this international fron-
tier road now approximate Gdes. 2,000,000. When the road is completed,
there will be maintenance costs as well.
A total of Gdes. 18,000 was appropriated to be used by the Agricultural
Service in the maintenance of a coffee testing station and other purposes
connected with coffee marketing.
The extraordinary appropriation of Gdes. 3,750 in favor of the Depart-
ment of Religion was for the purpose of official installation of a
Bishop at Cayes. The extraordinary credit of Gdes. 1,500 opened to the
Department of Public Instruction for the establishment of a reform school
was .accompanied by a corresponding compression in budgetary allocations.
A classification of government expenditures by functions is presented in
Table 41 which includes a column showing the percentage of total re-
presented by expenditures for each function. These percentages for 1937-38
are apt to be misleading unless allowance is made for two things. 1) Low
receipts during 1937-38 restricted expenditures to essential government
functions which consequently show an abnormal percentage increase over
those functions which are highly desirable from the point of view of ulti-
mate welfare of the people but in time of emergency perhaps not quite so
indispensable; and 2) the fact that full amortization payments were not
made and the consequent low percentage expended for public debt unduly
swells the percentage recorded for other functions.
After making these allowances the objects for which expenditures were
made presents some interesting trends.
Expenditures for maintaining order and security absorbed 26.12 per cent
of total government expenditures in 1937-38. This percentage is the largest





7() IIAITI: REPORT OF FISCAL REPRESENTATIVE

Haiti has shown in many years. While allowance must be made as stated
above for other factors affecting percentages, a study of the total amounts*
spent shows the same upward trend. Expenditures for this purpose in(
1937-38 exceeded those of 1936-37 by Gdes. 671,817.30. Still higher ex-[
penditures are provided for in the 1938-39 budget. It is disturbing to find.
it necessary to spend such a large percentage of public money on police,
arms and munitions, and military preparedness in Haiti. This is more
particularly true when one considers the kindly tranquil Haitian country-
side where the most peace loving agricultural people in the world ask only
to be allowed to live out their lives in security.
The amount spent for education was 12.77 per cent of total expenditures
during the fiscal year. Public debt expenditures were 10.59 per cent of
total expenditures; expenditures in the interest of public health were 9.15
per cent; expenditures for financial administration used up 8.84 per cent;(
and 7.61 per cent was spent for public works and municipal improvementsi
combined. Legislative and judicial functions absorbed 7.76 per cent of the|
total.
Public Works Program
A contract was entered into in July 1938 between the Haitian State and
The J. G. White Engineering Corporation whereby the latter undertakes
to execute a program of productive public works over a period of-three to
four years and to an extent of approximately twenty five million gourdes.
Reimbursement to The J. G. White Engineering Corporation will be made
by negotiable notes. The public works to be undertaken are described
in the contract as public works of a productive nature such as roads, bridges,t
wharves, drainage canals, irrigation projects, and projects of agricultural
development.
Haiti's resources so far developed are predominately agricultural in
character and development in Haiti necessarily means further agricultural
development. Since those foodstuffs with few exceptions which can be
produced in Haiti for local consumption are produced in abundance, in-
creased agricultural production consequently means increased production of
exportable surpluses.
The bulk of the work to be undertaken under the public works program
is expected to have a more or less direct bearing on increased productioni
for export. The building of roads, for example, will consist chiefly of short
"feeder" roads leading directly to ports or to main highways from particu-
larly productive areas now in need of such outlets. Among the projects
under consideration at the year-end or on which work had actually begun
were several such feeder roads as: the road from Marigot to Jacmel; Camp
Perrin to Cayes; Dondon to Cap-Haitien; Lafond to Jacmel; and Plaisance
to Cap-Haitien. Better roads are particularly important in the regions
mentioned both for coffee and to make possible banana transportation from






HAITI: REPORT OF FISCAL REPRESENTATIVE


.buying stations to the ports of shipments without that injury to the fruit
which rough roads cause.
Improvement of trails leading from coffee and banana regions to main
roads in the neighborhood of Saint-Marc, Cayes, Jer6mie, Jacmel, Jean-
Rabel and Cap-Haitien is under study.
Work had begun or was started shortly after the year-end to improve
the wharf serving coastwise shipping at Port-au-Prince, and the wharf at
Cayes.
In recent years Haiti has lost two of its most important bridges by floods.
The bridge over the Cavaillon river on the main highway between Port-au-
Prince and Cayes was carried away. Likewise the steel bridge over the
Grand-Anse river on the main highway leading to J6remie was destroyed by
an unprecedented flood in the Grand-Anse valley. Neither of those bridges
has been replaced. The bridge over Trois Rivieres on the main highway
leading to Port-de-Paix became unsafe for travel and was replaced by a
new steel structure during the fiscal year. There are many smaller bridges
which have been destroyed by floods or are in need of repairs in order to
make existing highways passable in all seasons. Work has been begun on a
badly needed bridge over the Trou River and another at Terrier Rouge
both on the main road from Cap-Haitien to Ouanaminthe. Studies are being
made to determine the best type of bridge for the Cavaillon river.
Irrigation and drainage projects have naturally the most direct bearing
on increased production since land otherwise idle is brought directly into
production. Irrigation projects are under consideration for the following
regions: Gonaives plain, Cavaillon plain, Plain of the North, Plain of
Leogane, Trois Riviere valley, in the vicinity of Jacmel, and at Jean-Rabel.
Improvement in the small irrigation systems in the Artibonite valley and in
the St.-Marc region is under study. Drainage projects are being carried
out for portions of the Cul de Sac Plain, and the Leogane Plain. Studies
are being made of drainage projects in the region of Jean Rabel and else-
where.
Several projects are under consideration for construction or improvement
in city water supply systems. Port-de-Paix has no municipal water service.
The present systems of Port-au-Prince, Gonaives, and Cap-Haitien are
inadequate.
One of the advantages of undertaking an extensive program of productive
public works at.this particular time of economic depression was the allevia-
tion it should make in unemployment conditions throughout the country.
The drop in the national income because of low world commodity prices,
particularly coffee, has caused retrenchment in expenditures from private
sources for employment. Added to this retrenchment in private spending
has been curtailment of government spending. Meanwhile the numbers of
unemployed have been increased by the return of Haitian emigrants from
Cuba and from Santo Domingo. In previous years due largely to lack of






78 HAITI: REPORT OF FISCAL REPRESENTATIVE

employment opportunities in Haiti large numbers of Haitians found em-
ployment in these neighboring countries. In fact Haitian laborers were
eagerly sought and various large sugar companies maintained recruiting
agencies in Haiti for that purpose. In particular, they were needed for cane
cutting, as they could support the heat and hard work where weaker types
failed. In the last few years sugar prices fell along with other commodity
prices and the pressure for cane field labor in those countries has lessened.
As economic conditions and unemployment grew to greater proportions one
of the means hit upon for reducing unemployment was the expulsion of
Haitian emigrants, thereby lessening their own unemployment problem by
decreasing the available labor supply and providing greater opportunities
to their nationals.
All of which points to the need not only of increasing present employment
in Haiti but of multiplying opportunities for useful employment in the
future. Success of the plan to increase the economic equipment and the
economic rehabilitation of the country should go far towards preventing a
re-occurrence of present and past conditions of suffering and unemployment.
When the contract for public works became effective July 14, 1938,-
only two and a half months of the fiscal year remained. Time was needed
for the engineering corporation to organize its personnel, study plans and
projects, order materials, etc. Consequently it was gratifying to have work
actually under way by the end of the fiscal year, if only on a limited number
of projects. These projects in the main were those already commenced
by the Public Works Service and such as could be undertaken immediately
with a view to relieving unemployment as quickly as possible. Such were
the considerations for completing the surfacing of the President Roosevelt
highway between Port-au-Prince and Carrefour. Another project having
a direct utility in improving export products and which could be under-
taken immediately was the manufacture of several thousand coffee drying
trays to aid the program for better coffee preparation. As many of these
as possible were made and delivered for use in the 1938 coffee harvesting
season.
Only Gdes. 317,117.69 had been expended by the year-end on the public
works program. This amount being a non-fiscal expenditure is not included
in total expenditures from revenue for the year, as expenditures are usually
referred to in this report.

Customs Service
Expenses of the customs service are paid out of the operating fund of the
Fiscal Representative. This fund consists of five per cent of customs
receipts. At the beginning of the fiscal year there was a surplus of Gdes.
122,541.58 in the fund carried over from the prior fiscal year and accruals
to the fund during the fiscal year of Gdes. 1,129,715.62 made a total of
Gdes. 1,252,257.20 available for customs expenses. This amount was suf-






HAITI: REPORT OF FISCAL REPRESENTATIVE


ficient to cover all costs of administering and operating the customs service
and in addition Gdes. 203,885.46 were paid towards the commission amount-
ing to one per cent of customs revenues, contractually payable by the
government to the Banque Nationale de la Republique d'Haiti for the
treasury service the bank renders.
In every year of its existence this organization and that of the General
Receiver of Customs, to which it succeeded, has met all of its operating
costs in full from accruals to the "five per cent fund" and in nearly every
year has paid from its operating fund the full amount of the bank's com-
mission. In the fiscal year just ended one per cent of total customs collec-
tions amounted to Gdes. 225,943.12 of which amount Gdes. 203,885.46 were
paid to the bank from the five per cent fund. This represented the amount
remaining in the five per cent fund after payment of all expenses of the
customs service. There was no balance left in the fund at the beginning of
the fiscal year 1938-39.
The expenses of the Fiscal Representative, classified by objects of ex-
penditure were .as follows in 1937-38:
Object Gourdes
Administration ..................................... 551,284.56
Customs Operation................................. 483,753.96
Repairs and Maintenance....................... 8,897.51
Acquisition of Property..................... 4,435.71
Fixed charges ..... .................. ....... 203,885.46
Total ............................................. 1,252,257.20

Disbursements from the five per cent fund for administrative expenses
declined from Gdes. 556,198.88 in 1936-37 to Gdes. 551,284.56 in 1937-38.
There was a decline in the expense of customs operation from Gourdes
506,301.07 in 1936-37 to Gdes. 483,753.96 for 1937-38. With low accruals to
the fund in prospect expenditures during 1937-38 for repairs and mainte-
nance as well as acquisition of property were restricted to Gdes. 8,897.51 and
Gdes.4,435.71 respectively. In 1936-37 Gdes.45,899.70 had been expended for
repairs and maintenance while Gdes. 15,019.43 were expended for acquisition
of property. Expenses classified as "fixed charges" include only the com-
mission paid to the Banque Nationale de la Republique d'Haiti for treasury
service. The part of this commission paid out of the five per cent fund
amounted in 1937-38 to Gdes. 203,885.46. In the previous year the full
amount of one per cent of total customs revenues totalling Gdes. 287,428.73
was paid from the five per cent fund.
Expenses for administration and operation, combined, amounted to 82.65
per cent of total disbursements from the five per cent fund in 1937-38. The
corresponding share for the previous year amounted to 75.31 per cent. This
does not mean that the total cost of administration and operation increased,
but that is was possible to decrease amounts expended for repairs and





HAITI: REPORT OF FISCAL REPRESENTATIVE


maintenance, acquisition of property and fixed charges, in a greater pro-
portion to total expenditures than was possible in expenditures for ad-
ministration and operation.
The amount expended for repairs and maintenance amounted to but 0.71
per cent of total disbursements during 1937-38; while the corresponding
percentage for 1936-37 was 3.26. Amounts expended for acquisition .of
property in 1937-38 comprised but 0.36 per cent of the total expended. In
the previous year property acquisitions comprised 1.06 per cent of the total.
Fixed charges totalled 16.28 per cent of total disbursements from the five
per cent fund while in 1937-38 the corresponding percentage was 20.37.
Expenditures for administration and operation may be broken down
into the following items:
Gourde Per cent
Salaries and wages................ 890,346.72 86.03
Supplies and material........... 52,188.15 5.04
Transportation:...................... 71,434.50 6.90
Communications .................... 7,491.25 0.72
Rents ............. .................... 735.84* 0.07*
Special and miscellaneous...... 14,313.70 1.38

In the previous year salaries and wages had been Gdes. 923,715.36;
supplies and materials Gdes. 59,565.46; transportation costs Gdes. 72,470.87;
communications, Gdes. 5,387.40; rents, Gdes. 930.00*; and special and
miscellaneous Gdes. 2,290.86.
The largest saving in amount (Gdes. 33,368.64) was made in "salaries
and wages". Whenever it was possible during the year to make a re-
distribution of duties so as to reduce personnel and still maintain the effi-
ciency of the customs service, this was done. In addition to this economy
measure the salaries of all officials and employees were reduced by 10 per
cent during the last five months of the fiscal year.
The cost accounting system maintained by this office makes it possible
to give a detailed analysis of customs costs at all ports. The figures for
1937-38 show that for each gourde collected in customs duties during the
fiscal year the cost of collection averaged Gde. 0.0214. This compares with
a similar average of Gde. 0.0176 in the preceding fiscal year.
The cost at each port of each gourde collected was: Port-au-Prince Gde.
.0152; Gonaives, Gde. .0182; Cap-Haitien Gde. .0241; Cayes Gdes. .0268;
Port-de-Paix Gde. .0289; Miragoine Gde. .0274; Fort Libert6 Gde. .0321;
Jacmel Gde. .0367; Petit-GoAve Gde. .0390; Saint-Marc Gde. .0465; J6r6mie
Gde. .0624; Aquin Gde. .4557. The total receipts collected at Belladere,
Glore and Ouanaminthe are so low that the cost of maintenance at these
posts exceeds the amounts collected in duties. It is however necessary to
maintain these custom houses to prevent contraband. The cost per gourde
collected was: Belladere Gde. 1.0713; Glore Gde. 1.4822; Ouanaminthe Gde.
1.6593.
*Credit.





HAITI: REPORT OF FISCAL REPRESENTATIVE 81

'o .From. 1919 to 1937 the average cost of customs operation had been Gde.
A. .0194 per gourde collected.

71 Internal Revenue Service
ig The operating fund of the Internal Revenue Service consists of 10 per
of cent of all internal revenue receipts collected; and 15 per cent of the corri-
In munal taxes collected by the internal revenue service.
The Internal Revenue Inspection Service, under the Agreement of August
ve 7, 1933 may expend an amount not to exceed five per cent of internal re-
7, venue receipts for the purpose of inspecting the collection of internal
rn revenues. Actual expenditures by the Internal Revenue Inspection Service
have not totalled five per cent of internal revenue in any year since its
Creation.
During 1937-38 expenditures by the Inspection Service amounted to 3.7
per cent of total internal revenues. In the fiscal year 1936-37 its expendi-
tures were covered by 3.9 per cent of internal revenue receipts. Five per
cent of internal revenue receipts amounted in 1937-38 to Gdes. 249,539.36.
Expenses of the Inspection Service were Gdes. 185,009.89. The balance
Sof the fund unused was therefore Gdes. 64,529.47. Of this sum Gdes.
7 2,237.00, representing the amount of salary cuts, reverted directly to the
general treasury and Gdes. 62,292.47 were made available to the Internal
Revenue Service.
s Accruals to the operating funds of the two services during the past two
e- fiscal years have been as follows:
1937-38 1936-37
iy Gourdts Gourdes
SInternal Revenue Service
10 per cent of internal revenues................ 499,078.73 496,467.30
15 per cent of communal revenues............. 236,517.43 277,506.14
le 735,596.16 773,9,73.44
r Internal Revenue Inspection Service
S5 per cent of internal revenues.................. 249,539.36 248,233.65
h Total .................................................. 985,135.52 1,022,207.09

From these funds, the Internal Revenue Service and the Internal Revenue
Inspection Service expended the following amounts:
1937.38 1936-37
Gourdes Gourdes
eInternal Revenue Service.............................. 783,361.27 826,493.02
Internal Revenue Inspection Service........... 185,009.89 195,624.40
e Total ................................................ 968,371.16 1,022,117.42
0
e Combining all costs of the two services shows that total expenditures of
the two services decreased from Gdes. 1,022,117.42 in 1936-37 to Gdes.
968,371.16 in 1937-38. Expenses for administration and operation decreased
from Gdes. 946,985.71 in 1936-37 to Gdes. 913,506.99 in 1937-38. Salaries





HAITI: REPORT OF FISCAL REPRESENTATIVE


and wages decreased from Gdes. 687,356.83 in 1936-37 to Gdes. 684,804.81
in 1937-38; purchases of supplies and materials decreased from Gourdes
80,240.35 in 1936-37 to Gdes. 64,120.79 in 1937-38; and transportation cost
dropped from Gdes. 160,685.35 to Gdes. 146,871.98.
Expenditures of the Internal Revenue Inspection Service were as fol-
lows during each of the last two years:
1937-38 1936-37
Gourdre Gourdes
Salaries ........................ 107,338.24 104,487.50
Supplies ...................... 4,035.64 3,133.67
Transportation ................ 70,540.01 65,554.28
Equipment ...................... .................. 21,946.75
Repairs ......................... 924.45 .................
Miscellaneous ............... 2,171.05 502.20
185,009.89 195,624.40

There were no expenditures for equipment during 1937-38. In the pre-
vious year four new automobiles had been purchased to replace used cars.

Treasury Position

Government expenditures from revenues exceeded revenue receipts in
1937-38 by Gdes. 831,293.64. The deficit was covered by treasury reserves.
Table 47 presents a detailed statement of treasury assets and liabilities
as of September 30, 1938. The same statement in simplified form showing
the position of the treasury at the end of each of the last two fiscal years
would appear as follows:
Sept. 30, 1938 Sept. 30, 1937
Assets
Current assets ........ 2,160,306.05 2,656,689.52
Investments ............ 5,527,780.00 5,650,239.10
Other assets .......... 4,345,573.40 4,156,974.49

12,033,659.45 12,463,903.11
Liabilities
Current liabilities .. 1,979,771.27 1,682,473.15
Reserves ............... 9,345,573.40 9,398,123.57
Surplus ................ 708,314.78 1,383,246.39
12,033,659.45 12,463,903.11

Current assets include: the balance amounting to Gdes. 1,960,226.49 in
the government gourde accounts with the Banque Nationale de la R6pu-
blique d'Haiti; government sight and time accounts in New York (Gdes.
73,392.15); receipts collected but not deposited and cash in the hands of
disbursing officers (Gdes. 95,824.24); and finally reserves for unpaid checks
issued under the public works contract in the amount of Gdes. 30,863.17.
Investments include the purchase price (Gdes. 5,000,000) of the capital
stock of the Banque Nationale de la Republique d'Haiti owned by the
government, and bonds of the Series A and Series C issue totalling Gdes.





HAITI: REPORT OF FISCAL REPRESENTATIVE


527,780. Bonds in the amount of Gdes. 337,386.90 are held for the treasury
account; while bonds in the amount of Gdes. 121,165 are held for account of
the Garde d'Haiti. Bonds to the extent of Gdes. 69,228.10 are held for the
account of the Agricultural Colonies. All amounts stated are cost prices.
Under "Other Assets" there are but two items: the fiduciary currency
reserve (Gdes. 3,622,500), and ,advances to communes (Gdes. 723,073.40).
The "Fiduciary 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 the vaults of the bank.
Advances to communes at the end of the previous year had stood at Gdes.
775,683.57, the difference (Gdes. 52,610.17) represents the amount received
by the treasury during the fiscal year as amortization on loans to com-
munal governments.
Turning to the liabilities side of the statement, the first item "Current
liabilities" includes: unpaid checks in the amount of Gdes. 811,454.35;
unexpended balances of extraordinary appropriations totalling Gdes. 81,-
705.09; balances in non-fiscal accounts, Gdes. 1,055,748.66; and unpaid
checks issued in connection with the public works contract in the amount
of Gdes. 30,863.17.
These current liabilities are self explanatory except perhaps for the
balances in "non-revenue" accounts. The "non-revenue" accounts include
cash bonds of various kinds covering notaries and postal contractors,
and security deposited by licensed owners of firearms, etc. It also includes,
among others, the revolving funds of the Bureau of Supplies, Public Works
Administration, and the State Printing Office. The Garde d'Haiti savings
accounts and pension fund are likewise included in the "non-revenue"
accounts.
At September 30, 1938, non-revenue accounts stood at Gdes. 1,055,748.66
as compared with Gdes. 570,115.68 at September 30, 1937. The largest
single item in the non-revenue accounts at the year-end was the balance of
Gdes. 483,683.21 held for the benefit of the agricultural colonies established
during the fiscal year mainly for, the purpose of providing a means of
livelihood for Haitian refugees from the Dominican Republic.
It might be here explained that "non-revenue" receipts and expenditures,
in accounting for Haitian government funds, are kept separately from all
statements of revenue receipts and disbursements from revenues. The
"non-revenue" accounts are in the nature of trust funds administered by
the Treasury.
There are three items included as reserves: the "Fiduciary currency
reserve" (Gdes. 3,622,500); the purchase price of the capital stock of the
Banque Nationale de la R6publique d'Haiti (Gdes. 5,000,000); and advances
to communes (Gdes. 723,073.40).
The surplus was Gdes. 708,314.78 on September 30, 1938.





HAITI: REPORT OF FISCAL REPRESENTATIVE


Public Debt
The fiscal year 1937-38 marked the lowest point in the public debt in
several decades. The low point reached at the end of July 1938 marked
the first interruption in the steady decrease of Haiti's public debt since the
consolidation of the debt and the refunding operations in 1923-24 fixed the
amount of the debt in dollars. During each of these last 14 successive years
Haiti has decreased its debt by percentages which are surprisingly large
when considered in the light of fiscal events in other countries during the
same period. Measures taken during the fiscal year resulted in reduction
of the public debt through amortization of the Series A and Series C loans
being curtailed to token payments until September 30, 1939. The govern-
ment at the same time has undertaken a program of expenditures for
productive public works and as a result the present outlook is for an in-
crease in the public debt during the coming fiscal year; and possibly for
three or four years more, depending on whether or not expenditures under
the public works program exceed the amortization payments on the 1922
loans during this period.
No alarm need be felt about Haiti's financial position. Haiti has been
faced with an emergency and has found it the part of wisdom to alter
temporarily its financial policy to meet the new situation. The Republic
should emerge from this period with its credit value improved; with its
capacity to meet obligations increased.
The gross public debt on September 30, 1938, was Gdes. 43,950,094.29.
This is lower than .at any year-end in the last sixty years so far as a search
of the records shows. Haiti's public debt was almost three times as high
only 14 years ago, and over four times as high if we go back a few years
more. In 1924 the debt amounted to Gdes. 121,048,501.20 and in 1918 had
been Gdes. 177,247,900.35.
The per capital public debt in Haiti cannot be stated with exactitude in
the absence of an accurate census. On the basis of the best estimates of
population available it is apparently between Gdes. 15.00 and Gdes. 20.00
and therefore close to the lowest to be found anywhere in the world.
In view of the greater size of the public debt in the recent past and
Haiti's demonstrated ability, not only to carry it successfully, but in years
of normal revenues to reduce it, even in excess of contractual requirements,
it is evident that Haiti's debt burden is far from being a heavy one. The
country is somewhat rare in the world to-day which does not consider the
mere payment of interest charges on its public debt without an increase
in the total debt for that purpose an accomplishment, almost if not entirely,
beyond attainment.
The history of Haiti's public debt in recent years has been fully discussed
in many annual reports, notably in the reports for 1929-30 and years prior
thereto, also in the report for 1935-36. However, in view of the arrangement





HAITI: REPORT OF FISCAL REPRESENTATIVE


entered into in January 1938 for curtailment of amortization payments, it is
timely to review briefly once again the policy followed in previous years
for a better appreciation of the actual situation in regard to .amortization.
Reference to table 48 which presents an itemized statement of the public
debt since 1915 will show at a glance the rapidity with which the debt has
been retired. The following is a statement of the total debt at September
30 of each year since 1924:
Year Gourdes Year Gourdes
1924............ 121,048,501.20 1931 78,357,576.10
1925............ 115,231,263.80 1932 72,625,870.96
1926............ 108,307,079.30 1933 66,901,412.84
1927............ 99,706,855.09 1934 60,830,435.79
1928............ 94,438,115.05 1935 54,930,599.85
1929............ 8,677.396.00 1936 49,092,715.80
1930............ 82,705,649.35 1937 44,317,295.95
1938 43,950,094.29

Important in the rapid decrease in the debt was the policy of amortization
in excess of requirements in the early years of the loans. In those years
it became a practice, which was followed until 1931-32, to anticipate the
entire requirements for a given year at the beginning of the year rather
than to effect their payment in monthly installments as permitted under the
loan contracts. The result was that large sums remained in the hands of
the fiscal agent, and accumulated interest on these funds was applied to
additional amortization and served to accelerate retirement of the bonds.
Since 1931-32 amounts have been placed in the hands of the fiscal agents
in advance, but not to the extent of the full amount stipulated for the year
at the beginning of each fiscal year. The loan contracts provide that when
revenues exceed Gdes. 35.000,000 a specific percentage of the excess
up to Gdes. 40,000,000 must be used for the establishment of a market fund
for additional amortization. Revenues exceeded Gdes. 35,000,000 for six
consecutive years beginning with fiscal year 1924-25 and ending with 1929-
30, and again in 1933-34 and 1934-35. However, market fund purchases by
the provisions of the contract were to be made only when bonds could be
purchased at a price not to exceed par and accrued interest. In 1926-27
when the Arbitration Court completed its examination of the Claims Com-
mission awards and the exact liability of'the state was fixed, the amount
of Series B bonds remaining unissued was deducted from the outstanding
debt. This operation, it is to be noted, did not reduce the actual debt, but
rather was in the nature of a correction of inflated debt figures, since
previously the entire authorized amount of the Series B loan had to be
considered as part of the public debt. Debt retirement was also accelerated
by the fact that nearly all purchases of bonds have been made at prices
under par and given amounts of funds set aside for purchases have retired
a correspondingly larger number of bonds. Another factor which acceler-
ated amortization was the feature of the bond contracts requiring the





HAITI: REPORT OF FISCAL REPRESENTATIVE


. government to make at regular intervals certain specified payments to the d
fiscal agents, without regard to the amount of interest to be paid on the
bonds. Consequently, as bonds were retired and amount of interest payable i
was reduced, the amounts which the fiscal agents were required to apply C
to amortization were automatically increased. Amortization was accelerated i
correspondingly.
The result of the foregoing factors was that, although the Series A bonds
were to mature in 1952, and Series C bonds in 1953, payment of the amounts
provided in the contract schedules would have retired all of the bonds by
about 1944. Series B loan has been already retired. t
The wisdom of retiring bonds out of revenues in excess of amounts
called for by the original amortization plan has been questioned at times.
It has been advanced that keeping the surplus in the country and putting it
to productive uses should have increased Haiti's economic ability to carry
the debt burden by increasing the resources of the country, and contributing
materially to government income. By so doing the security behind the
loan, would, in turn, have been substantially increased.
On the other hand, it must be taken into consideration that Haiti's debt
record on the 1922 and 1923 loans, in which the outstanding features are,
advance payments for amortization, and prompt discharge of all its obliga-
tions through depression years when other neighboring countries were
defaulting one after another, has secured for Haiti an excellent credit
standing. This has been evidenced by the high market values placed upon
Haitian securities. During the fiscal year 1936-37 Series A bonds com-
manded prices above par. It was evidenced again by the readiness with
which the cooperation of the bondholders' representatives was obtained to
a curtailment of amortization during the fiscal year when revenues fell to
a point at which continuing full amortization payments would have meant
curtailing government expenditures by an additional Gdes. 4,000,000 at the
very time when business in the country was most in need of the support
which comes from government spending; and when the economic conditions
of the country brought about by the interlocking problems of increased
unemployment and repatriation of Haitian citizens, required that further
decreases in government spending be avoided as far as possible during the
existing emergency. Haiti's credit standing is also reflected by the fact that
in this same year of low revenues, new funds were found for financing a
program of productive public works by notes to be accepted at their face
value and with an interest rate of but five per cent. No commission or fee
is payable on this new financing.
And here it should be recalled that a relatively small portion of the
proceeds of the 1922 loans was used for public works or to increase pro-
duction. The proceeds of the Series A loan were devoted to: (1) settlement
of arrears of interest upon the guaranteed bonds of the National Railroad
Company of Haiti; (2) repayment of a loan made by the Banque Nationale





HAITI: REPORT OF FISCAL REPRESENTATIVE


de la R6publique d'Haiti; (3) settlement of claims; (4) payment of interest
on the internal funded debt; (5) refunding of the 1896 and 1910 French
loans. The balance when available for public works amounted to some
Gdes. 12,000,000. A large part of this sum was expended for purposes not
immediately connected with increased economic production such as the
construction of vocational schools, for example. The bonds of Series B
were used in refunding various internal loans, and in paying awards of the
Claims Commission. We have noted above that when sufficient bonds had
been issued to effect these purposes no more Series B bonds were issued and
the balance of the loan authorized was deducted from the public debt. The
Series C bonds were exchanged for the guaranteed bonds of the National
Railroad Company of Haiti. Thus it will be seen that the proceeds of the
1922 loans were largely absorbed in refunding operations, and very little
of the proceeds of those loans went into productive public works, or to
increase the economic equipment of the country.
During the fiscal year arrangements have been made to finance a program
of productive public works, such as roads, bridges, wharves, drainage
canals, irrigation projects and projects of agricultural development to an
extent of approximately five million dollars.
To carry out this program a contract was signed July 6, 1938, and
published together with the sanctioning decree-law in the Moniteur of
July 7, 1938.
Under the terms of the contract the services of the J. G. White Engineer-
ing Corporation were engaged to purchase material and undertake the
execution of a series of public works projects of a productive nature. The
expenses of the Engineering Corporation, as incurred, are paid from a
revolving fund established in the Banque Nationale de la R6publique
d'Haiti. At least once a month a statement of expenditures from the fund
is presented and the Haitian Government signs and delivers to The J. G.
White Engineering Corporation a promissory note in an amount represent-
ing the multiple of $5,000 next lower than the total amount carried in the
statement. The balance left over is added to the next statement. The
proceeds of the note are deposited to the credit of the revolving fund. The
J. G. White Engineering Corporation is bound to continue the work only
so long as it is able to negotiate at their face value the promissory notes
signed by the Haitian government. The Export-Import Bank of Washing-
ton Inc. has agreed to purchase the notes at their face value.
The promissory notes both as to interest and principal are payable at
the main office of the National City Bank of New York, at 55 Wall Street,
New York City. The notes bear interest at the rate of five per cent per
annum payable semi-annually.
The first note under the contract was issued September 3, 1938, in the
amount of Gdes. 150,000. The note was negotiated September 15, 1938 and
matures September 15, 1943. This was the only note issued under the




HAITI: REPORT OF FISCAL REPRESENTATIVE


contract during the fiscal year. The amount of the note together with the
advance of Gdes. 163,431.53 from the revolving fund during September,
and the balance of Gdes. 3,686.16 carried forward from August, make up
the item of Gdes. 317,117.69 appearing in the statement of Public Debt as
"Public Works Contract 1938".
On September 30, 1938, the gross public debt of the Republic consisted
of the following items:
Gourdes
Series A bonds.................................. 34,459,585.75
Series C bonds...................................... 5,550,890.85
Fiduciary currency.............................. 3,622,500.00
Public Works Contract 1938............... 317,117.69
Total .......................................... 43,950,094.29

The total as given above compared with corresponding totals of Gdes.
44,317,295.95 on September 30, 1937, Gdes. 49,092,715.80 on September 30,
1936, Gdes. 54,930,599.85 on September 30, 1935, and Gdes. 60,830,435.79
on September 30, 1934.
The item of Gdes. 3,622,500 represents the amount of nickel currency
not covered by the fiduciary currency reserve. Since the fiduciary currency
is not redeemable it may be questioned whether this item of "debt" re-
presents any liability whatever. It is in the debt statement in continuation
of the practice of previous years.
The figures given above for the funded debt are net amounts after
deduction of sums remaining in the sinking fund of each bond issue at the
year-end which had not yet been applied to amortization. These unapplied
sums at September 30, 1938, were as follows:
Gourdes
Series A sinking fund.............................. 57,914.25
Series C sinking fund.............................. 6,966.85
Total ................................................ 64,881.10

Total expenditures for Service of the Series A and Series C bonds during
the fiscal year 1937-38 amounted to Gdes. 3,046,760.75 as compared with
Gdes. 7,456,567.27 in the previous fiscal year. Of the total amount expended
in 1937-38 for Service of the bonds, Gdes. 2,406,193.20 covered interest;
Gdes. 624,208.05 were applied to amortization; and Gdes. 16,359.50 re-
present expenses incurred for transfer of funds, etc.
Interest charges on the public debt in 1937-38 amounted to only 8.56 per
cent of revenues receipts. Interest charges amounted to 7.63 per cent in
1936-37. By way of comparison, in 1923-24 interest on the public debt had
cost Gdes. 6,276,510.66, or 19.08 per cent of total receipts.
Amortization payments during the fiscal year 1937-38 on Series A and
Series C bonds are considerably lower than amortization payments in




HAITI: REPORT OF FISCAL REPRESENTATIVE


previous fiscal years and this calls for consideration of the events which
led to the Accord of January 13, 1938, between the Haitian and American
Governments.
The emergency which forms the reason for this new accord, arose in the
early part of the fiscal year when coffee prices collapsed following the
abandonment by Brazil of its coffee valorization plan. Low prices for
cotton, sisal, sugar and cacao added to the distress caused by the low price
for coffee. Cotton production due to the ravages of the boll weevil was
decreasing, but the low price of cotton was an even greater factor in reduc-
ing the value of Haiti's crop. In addition to low world commodity prices,
Haiti was faced with another problem; thousands of Haitian emigrants
were streaming back from the Dominican Republic and from Cuba. For
the most part these returning emigrants were indigent. Many of those
returning from the Dominican Republic came back as refugees, having been
forced by acts of violence to abandon their possessions and flee for their
lives. These indigents and refugees had to be taken care of by the govern-
ment and aided to permanently reestablish themselves in a new life. Leav-
ing them to shift for themselves without food, without homes, and without
employment would have created intolerable social conditions. This ad-
ditional burden was thrust upon the government on the heels of the deves-
tating crash in coffee prices which was forcing foreign trade values of the
country to the lowest levels recorded in the last 21 years. Meanwhile the
government was depending upon its import and export tariff for over 80
per cent of its revenues. We have seen that while so depending the
government was forced to make drastic reductions in one of its hitherto
important sources of income, that is, in export taxes on coffee, before that
product could move out of the country at all.
It was under the foregoing conditions that negotiations for a temporary
reduction in amortization payments were opened between the Haitian and
American governments. It has been noted how Haiti was already before-
hand in amortization payments.
An Accord was reached, after consultation with the bondholders' re-
presentatives, between the two governments and signed January 13, 1938.
It was agreed therein that during the period from January 1, 1938 to
September 30, 1938 the amounts needed for payments connected with
execution of the Loan Contracts should consist of the amounts necessary
to pay the interest on all outstanding bonds issued under the Loan Con-
tracts of October 6, 1922 and May 26, 1925; and Gdes. 100,000 on account
of the amounts required to be paid under the Loan Contracts for the
amortization of the bonds.
The full amortization payments stipulated in the original schedules of
the loan contracts had been made during the October-December 1937
period. Amortization payments from January 1, 1938 to September 30,
1938 were made in conformity with the Accord of January 13, 1938.




HAITI: REPORT OF FISCAL REPRESENTATIVE


Service of Payments
The general accounting and disbursing office of the government is known
as the Comptroller's Office or as the Service of Payments.
The office audits all government expense vouchers to determine whether
proposed payments are legal and supported by justifying documents in due
form. If the payment is legal and properly justified, checks are prepared
for signature. After signature, the Service of Payments sees to the proper
delivery of the checks.
Checks covering monthly payments of salaries and pensions are prepared
in time to be in the hands of disbursing officers throughout the country a
few days before the end of each month. Delays in making these payments
are very infrequent.
In addition to its work of auditing and paying expense vouchers and
preparing payroll and pension checks, the Service of Payments tabulates
accounting data and prepares financial reports. Records are kept covering
budgetary, extraordinary, and non-fiscal accounts; functional nature of
expenditures; government receipts by ports, and by sources; and records
are kept covering all government bank balances.
From recapitulations of the records kept by the bookeeping sections of
the office covering all financial operations of the government, statistics are
compiled for publication in the Monthly Bulletin and in the Annual Report
of the Fiscal Representative. A detailed financial statement covering, all
government receipts, expenditures and other financial transactions occurring
during the month is prepared and made available to government officials
within fifteen days following the close of each month.
The Service also prepares estimates of revenue for the following fiscal
year upon which the budget of ways and means is based.
The office is responsible for payment to the fiscal agent of all amounts
due under the loan contracts. It maintains records showing the distribution
of payments between interest and amortization; it examines the expense
accounts of the fiscal agent; and prepares statements showing the position
of the public debt.
A section of the office maintains files containing all accounting docu-
ments, including payment vouchers and paid checks.
Supplies
The purchase of office supplies, stationery, and office equipment is cen-
tralized in the Bureau of Supplies. The object in the centralization of
purchases is to secure the economies of large quantity purchases. The
Bureau of Supplies is not a business. It does not seek profits. Its function
is to purchase and furnish government services with supplies at as low
a cost as possible. The service charge made by the Bureau is regulated to
cover only the overhead incident to the expense of handing supplies.
The objects for which the Bureau is maintained can only be realized if
all Government Services and Departments purchase their office supplies




HAITI: REPORT OF FISCAL REPRESENTATIVE


through the Bureau, for it is only through purchases in large quantities
of standardized supplies, maintenance of low stocks, and rapid turnover that
costs can be kept low. These advantages disappear if government services
purchase their supplies elsewhere and the Bureau is not patronized. If its
stock does not turn over rapidly, increased overhead expenses cause an
increase in the cost of handling government supplies.
The profit and loss statement of the Supply Bureau for 1937-38 shows
that gross sales, that is, the amounts charged to the various departments
and services for supplies furnished them through the Bureau, during the
year totalled Gdes. 204,616.60. This .amount was Gdes. 143.52 less than the
amounts paid for purchases and paid out to cover operating expenses of
the Bureau during the fiscal year.
Assets of the Bureau at September 30, 1938, consisted chiefly of inventory
valued at Gdes. 149,185.46. The inventory at September 30, 1937 was valued
at Gdes. 159,785.82. Accounts receivable September 30, 1938 amounted to
Gdes. 18,347.25. These accounts are against government services and there-
fore collectible. Cash amounted to Gdes. 13,466.61 and equipment was
valued at Gdes. 8,084.00.

The Budget and Financial Legislation
The 1937-38 budget as promulgated, July 12, 1937, authorized ordinary
appropriations totalling Gdes. 32,935,999.77. The budget at that time
appeared to be safely and conservatively balanced, with ordinary expen-
ditures so well within probable income that there would be sufficient
revenue above ordinary expenditures to provide the usual supplementary
credits for deficiencies, and in all probability permit of extraordinary ex-
penditures in reasonable amounts. However, the fiscal year had scarcely
begun when it became evident, as has been described fully elsewhere in this
report, that government receipts would not cover expenditures in the
amounts carried in the budget of expenditures. The budget of expenditures
was accordingly redrafted with many modifications and the revised budget
was sanctioned by a decree-law January 13, 1938. The original budget
compared with the modified budget as follows:
Original budget Modified budget
1937-38 193738
Gourdes Gourdes
Public Debt .................... 7,039,875.20 3,154,326.25
Foreign Relations .............. 662,780.50 662,780.50
Finances ........................ 2,974,617.00 2,874,617.00
Commerce ........................ 366,111.00 354,813.00
Interior ....................... 11,402,612.30 11,327,352.30
Public Works .................... 4,055,740.00 3,533,900.00
Justice ............................ 1,407,786.00 1,352,776.50
Agriculture ...................... 2,010,819.97 1,904,567.97*
Labor .............................. 611,260.50
Public Instruction.............. 1,949,619.80 2,528,300.30
Religion ............................ 454,777.50 454,777.50
32,935,999.77 28,148,211.32
*The Department of Agriculture, and the Department of Labor were combined January 13. 1938.






92 HAITI: REPORT OF FISCAL REPRESENTATIVE

The modified budget carried appropriations which were lower by Gdes.
4,787,788.45 than the original budget. Of this difference Gdes. 3,885,548.95
resulted from the decrease in the appropriation for the Public Debt, a
reduction which was made possible by the Accord of January 13, 1938, by
virtue of which amortization payments on the public debt were reduced
to Gdes. 100,000 for the period from January 1st. to September 30, 1938.
Full interest payments were provided for. The budget as modified January
13, 1938 controlled expenditures from that date until September 30, 1938.
Supplementary appropriations to cover deficiencies which developed in
the ordinary budget during the fiscal year amounted to Gdes. 771,000.
There were a number of cancellations of appropriations, in whole or in
part where appropriations exceeded requirements or where it was necessary
to reduce authorized expenditures for the sake of economy. In addition
there was the usual adjustment of allocations in favor of the revenue col-
lecting services whose appropriations are calculated on a percentage basis.
After making these adjustments, total ordinary and supplementary alloca-
tions for the year amounted to Gdes. 28,733,757.83. This figure compares
with previous years as follows:
Ordinary and Supplementary
Fiscal Years Appropriations
Gourdes
1933-34...................................... 32,863,794.84
1934-35...................................... 34,049,501.53
1935-36...................................... 34,565,141.68
1936-37...................................... 33,675,652.02
1937-38 ........................................ 28,733,757.83

Allocations during 1937-38 for extraordinary or non-operating expen-
ditures amounted to Gdes. 311,600.00 Extraordinary appropriations are
those not provided for in the regular budget, but which are necessitated
by urgent and unforseen circumstances. The funds for such expenditures
must be provided by treasury reserves or by surplus revenues. During the
fiscal year just ended revenues dropped to such low levels that amounts
available for extraordinary appropriations were necessarily very limited.
During the last five fiscal years extraordinary appropriations have been as
follows:
Extraordinary Appropriations
Gourdes
1933-34................................... 3,708,999.00
1934-35...................................... 2,822,795.04*
1935-36...................................... 2,215,999.87
1936-37...................................... 1,484,236.20
1937-38........................................ 311,600.00

The new budget for 1938-39 was promulgated September 29, 1938. A com-
parison between this budget and the original budget for 1937-38 is given
below, together with the increase and decrease in individual chapters. The

*This figure does not include the sum of Gdes. 5.000.000 appropriated to cover the purchase of the capital
stock of the Banque Nationaic de la Ripublique d'Haiti.





HAITI: REPORT OF FISCAL REPRESENTATIVE


comparison is made with the original budget for 1937-38 rather than with
the budget as modified in January, because it appears more useful to exa-
mine the changes from the longer range point of view. The new budget for
1938-39 follows closely the budget under which the government operated
during the last eight and a half months of the fiscal year 1937-38. The
original budget of 1937-38 is typical of those in the immediately preceding
years.
Original Budget Budget for
1937-38 1938-39
Gourdes Gourdes
Public Debt.................... 7,039,875.20 2,983,571.45
Foreign Relations .............. 662,780.50 739,280.50
Finances ........................ 2,974,617.00 2,667,527.00
Commerce ....................... 366,111.00 354,816.00
Interior ............................ 11,402,612.30 12,584,772.30
Public Works ................. 4,055,740.00 3,611,495.00
Justice ............................ 1,407,786.00 1,329,996.60
Agriculture .................... 2,010,819.97 1,810,264.19
Labor .............................. 611,260.50
Public Instruction ........... 1,949,619.80 2,652,477.80
Religion ............................ 454,777.50 454,777.50

32,935,999.77 29,188,978.34


The difference between the two budgets are numerous. The most im-
mediate and striking changes are:. (1) The sharp reduction in appropria-
tions for Public Debt. (2) The abolition of the Department of Labor and
absorption of its functions in part by the Department of Agriculture and
in part by the Department of Public Instruction. (3) The reduced ap-
propriations for the Department of Public Works, and (4) The increased
appropriations for the Garde d'Haiti.
The new budget is lower than last year's by Gdes. 3,747,021.43. If, for
the sake of better comparison, we exclude the appropriations for the Garde
d'Haiti and Service of the Public Debt the appropriations for all other
government Departments and Services combined are lower than those made
in last year's budget by Gdes. 930,717.68. This amount represents the
result of a painstaking search for possible economies through the elimi-
nation of, or reduction in, appropriations wherever that was found possible
and by reorganizations made with a view to decreasing operating expenses.
However, the increased appropriations in the amount of Gdes. 1,240,000 for
the Garde which appear in the budget of the Department of the Interior,
more than offset the economies resulting from decreases elsewhere in the
budget and, (still excluding appropriations for Service of the Debt) carry
total appropriations to an amount Gdes. 309,282.32 above appropriations in
the' prior budget.




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