Financial Difficulties

This sorry tradition was established indeed at the very outset, for when Haiti gained her independence she was forced to indemnify the French planters, and in order to meet these payments she contracted a loan from France, in addition to several internal loans that she already had floated. These loans were secured by her import and export duties, which were her principal source of income. Due to he constant change of administration and the resultant corruption and bribery little was realized from internal taxes and even a large percentage of the customs went to Presidential appointees or favorite generals whose support was needed. Little or nothing from the revenues went for productive purposes; they were all tied up to meet the loan payments. Thus, though the Government was able to meet the interest payments on its loans, it never had any money for administrative purposes. The Haitian Government was therefore constantly borrowing more money, and with each successive loan realizing less and less of the total amount of the flotation. The bonds were increasingly hard to sell, both in Haiti and abroad, and as the bankers knew that payment in full was a dim and distant prospect they demanded huge commissions for their services.

National Bank Established

So by 1910 finances were chaotic. The Government had no money on hand for its work; the foreign obligations were a tangled mess, and a complete reorganization necessarily was decided upon. A new national bank was formed and given the privilege of coining money and carrying out the Treasury functions of the Government. The contract between the Haitians and the bank provided that disputes were to be settled by arbitration and that there was to be no diplomatic intervention. The bank was originally a French corporation. The United States protested, however, against "the establishment in Haiti of a monopoly which excluded American enterprise" and declared the contract "disastrous to the sovereignty of Haiti and unjust in its operations in regard to the people and Government of Haiti." The French Company agreed to allow a group of American bankers, headed by the National City Bank of New York, to subscribe to 8,000 out of 40,000 shares. Despite the official protest of the United States the contract provisions in regard to Haiti were never changed.

Complications with Railroad

Haiti further bound herself by signing another contract for a railroad. The National City Bank of New York was directly or indirectly involved in the railroad company. This second contract had many complicated features in connection with building the road, and also contained the provisions that there should be no diplomatic intervention. Trouble soon developed between the railroad and the Haitian Government. The latter threatened to selves property belonging to the railroad on the ground that the contract had not been fulfilled. The company requested intervention from the United States.

In the meantime Haiti was also having a disagreement with the national bank, and matters came to a head in 1914 and 1915, when the bank, because of insufficient collateral, refused the Government money sufficient for its needs, and the Government, contrary to the contract, began coining money to meet the emergency. Differences developed, during which the bank appealed to the United States for help. Before help could come there were two revolutions in rapid succession, and the bank in high alarm asked the United States to send a warship, and quickly. But when this arrived the bank's chief concern proved to be the shipment to New York of gold belonging in whole or in part to the Haitian Government.

American Intervention

The new President, named Sam, was now desperate; new rebellion was brewing and he was absolutely without funds. In order to inspire his enemies with fear he ordered the massacre of 200 political prisoners. That strategy failed to tally, for the enraged populace grabbed President Sam from the French legation, where he had taken refuge, and literally tore him into bits. Pandemonium broke out, and on the following morning, July 28, 1915, Admiral Caperton landed troops and the American intervention began.

Some Haitians claim that conditions were not desperate, that matters could have been righted without the use of force, and that neither foreign lives nor foreign interests, as represented by the loans, had in any way been threatened. It is true that Haiti was not in arrears on any of her payments. They also claim that the republic's embarrassing financial position had been brought about by the bank and the railroad. They insist that the National City Bank was behind these two and had done everything in its power to bring about a pretext for American intervention, feeling that its interest would be furthered by American intervention, and hence not at all averse to any plausible excuse for forcing the hand of the State Department.

American Justification

The first reason ascribed for intervention was humanitarianism of a Whitman's-burden nature; conditions in Haiti were bad; "anarchy, savagery and repression" prevailed, and troops went in to clean up. Second, the State Department had been pressed not only to protect American interests already in Haiti but to allow these interests--notably the National City Bank--to, extend their activities. Last, we did not want any foreign power intervening in a land that was so near the Panama Canal; the Monroe Doctrine, as it had been reedited, covered any action on the part of a foreign country to protect its citizens or their property; hence we had to do the intervening, protecting first.

Debate as to Legality

There has been much argument and debate on the legality and justice of American intervention, but, whatever the justice, discussion is probably somewhat academic at present in view of the fact that marines are there now and should remain until 1936. As to the methods used to obtain control, there is sharper criticism, for until American plans were carried out funds were held up and the Haitian Government was left without means to pay salaries. The National Assembly, which refused to adopt a new constitution favorable to the Americans, was dissolved, and has never met since. A new constitution, granting the right to foreigners to hold property and containing various other features favorable to a continuance of American control, was drawn up and submitted to the people. It was adopted and the present lively debate is over the fairness of the campaign for it, and of the election itself.

Revolutions broke out in the north and interior of Haiti and were put down, the natives say, by unnecessarily brutal methods. A corvee system was instituted to build roads, but this administration, too, brought bitter complaint. The fact that much of the American personnel spoke no French and most of the natives no English naturally impeded progress and cooperation.