The Haitian independence debt (French: Dette d'Indépendance Haïtienne) involves an 1825 agreement between Haiti and France that included France demanding an indemnity of 150 million francs in five annual payments of 30 million to be paid by Haiti in claims over property, including Haitian slaves, that was lost through the Haitian Revolution in return for diplomatic recognition. Haiti was forced to take a loan for the first 30 million, and in 1838 France agreed to reduce the remaining debt to 60 million to be paid over 30 years, with the final payment paid in 1883. However, according to a 2022 The New York Times analysis, because of other loans taken to pay off this loan, the final payment to debtors was actually made in 1947. They approximated that 112 million francs was actually paid in indemnity, which is equivalent to $560 million in 2022 after adjusting for inflation.
Restoration France's demand of payments in exchange for recognizing Haiti's independence was delivered to the country by several French warships in 1825, twenty-one years after Haiti's declaration of independence in 1804. Despite several revolutions in France after that date (July Revolution, French Revolution of 1848, Paris Commune), successive governments, be they imperial, monarchist or republican, continued enforcing the debt and coercing Haiti to pay. Haiti had to take a loan in 1875 to pay back the final portion of the original loan, and the bank that benefited most from this was Crédit Industriel et Commercial. Even after the indemnity was paid, Haiti had to continue paying the other loans, and the government of the United States funded the acquisition of Haiti's treasury in 1911, and in 1922, the rest of Haiti's debt was moved to be paid to American investors.
A 2022 The New York Times article stated that it took until 1947 for Haiti to finally pay off all the associated interest to the National City Bank of New York (now Citibank). In 2016, the Parliament of France repealed the 1825 ordinance of Charles X, though no reparations have been offered by France. These debts have been denounced by some historians and activists as responsible for Haiti's poverty today and a case of odious debt.
History
Saint-Domingue colony
Saint-Domingue, now Haiti, was the most profitable and productive European colony in the world going into the 1800s. France acquired much of its wealth by using slaves, with the slave population of Saint-Domingue alone accounting for forty percent of the entire Atlantic slave trade by the 1780s. Between the years of 1697 and 1804, French colonists brought 800,000 West African slaves to what was then known as Saint-Domingue to work on the vast plantations. The Saint-Domingue population reached 520,000 in 1790, and of those 425,000 were slaves. The mortality rate among slaves was high, with the French often working slaves to death and transporting more to the colony instead of providing necessities as it was cheaper. At the time, goods from Haiti comprised thirty percent of French colonial trade while its sugar represented forty percent of the Atlantic market. By the 1770s, more than sixty percent of the coffee consumed in Europe came from the French West Indies, primarily from Saint-Domingue.
Independent Haiti and the rejection of the international community
Haiti's legacy of debt began shortly after a widespread slave revolt against the French, with Haitians gaining their independence from France in 1804, followed by the 1804 massacre of much of the remaining European population of Haiti. Jean-Jacques Dessalines, Governor-General of Haiti, ordered the execution of remaining whites; in response, Thomas Jefferson, United States President, feared a slave revolt would spread to the United States, ceased the aid that was initiated by his predecessor John Adams and sought the international isolation of Haiti.
"An army of black troops might conquer all the British Isles and put in jeopardy our Southern states."
The news of the new Haitian state was thus received with great fear and rejection by the countries and colonial powers of the region, since all of these countries were slaveholding nations and were nervous that their slaves might follow the Haitian example. The Haitian diplomat and politician, Jacques Nicolas Léger, wrote that even Simón Bolívar ignored Haiti when he called the Congress of Panama for fear of offending the United States.
After the declaration of independence, no state was willing to trade with Haiti, which led Haiti's first president Alexandre Pétion to suggest paying an indemnification to France, solely for the value of lost real estate, in order to see the de facto embargo lifted. Nevertheless, the French calculation of the indemnification (made in 1825 and confirmed in 1826) was based on articles 44 and 48 of the Code Noir, which established that the enslaved labourers on an estate in the preceding 30 years constituted 30–60 percent of the property value.
Haiti had hoped that the United Kingdom would support their recognition due to Britain's strained relationship with France, even providing British merchants lower import duties in 1825. However, during the 1814–1815 Congress of Vienna, which Britain was a party to, the French inserted a secret clause during the negotiations allowing them to by "whatever means possible, including that of arms... recover Saint-Domingue or to bring the population of that colony to order". In 1823, Britain recognized the independence of Colombia, Mexico and other nations in the Americas while continuing to refuse recognition to Haiti, leading to the Haitian government abolishing the lower import duties granted to British merchants. Haiti was unable to count on the United States as a potential ally; despite their anti-colonial assertion in the Monroe Doctrine of 1823, the American government refused to recognize Haiti, largely due to opposition by Southern slaveowners. The first American ambassador to Haiti – and with it recognition of Haiti's independence – only came in 1862, a year after the Southern politicians who had blocked such a move had left Congress after declaring secession.
Until France recognized Haiti's independence, the fear of reconquest and continued isolation persisted among Haitians. Haiti was also financially strained after purchasing equipment to defend itself from invasion. Knowing that improvements could not happen until Haiti received international recognition, President of Haiti Jean-Pierre Boyer sent envoys to negotiate terms with France. At one meeting in Brussels on 16 August 1823, Haiti proposed waiving all import duties for five years on French products and then duties would be halved at the end of the period; France refused the offer outright. By 1824, President Boyer began to prepare Haiti for a defensive war, moving armaments inland to provide increased protection. After being summoned by France, two Haitian envoys traveled to Paris. At the meetings held between June and August 1824, Haiti offered to pay an indemnity to France, though negotiations ended after France said it would only recognize their former territory on the west half of Hispaniola and that it sought to maintain control of Haiti's foreign relations.
Ordinance of Charles X
As a show of force, captain Ange René Armand, baron de Mackau, in the ship La Circe, along with two men-of-war, arrived at Port-au-Prince on 3 July 1825. Soon after, more warships led by admirals Pierre Roch Jurien de La Gravière and Grivel arrived at Haiti. A total of fourteen French warships equipped with 528 cannons presented demands that Haiti compensate France for its loss of slaves and the 1804 Haiti massacre.
The following ordinance of Charles X, King of France (1824–1830), was presented:
The Haitians wanted the French to recognize the Spanish part of the island as part of Haitian territory. However, the French flatly ignored this request. France had returned de jure the Spanish part of the island to Spain in the Treaty of Paris of 1814, which annulled the Treaty of Basel of 1795. Therefore, France had no claim to the formerly Spanish part of Hispaniola which it could renounce in favor of Haiti.
Under Charles X's ordinance, France demanded an indemnity payment of 150 million francs in exchange for recognizing Haiti's independence. In addition to the payment, Charles ordered that Haiti provide a fifty percent discount on French import duties, making payment to France more difficult. On 11 July 1825, the senate of Haiti signed the agreement to pay France.
Territorial discussions
During the discussions, the Haitians demanded from France that the Spanish part of the island be recognized by France as the territory of Haiti in the aforementioned Ordinance. The French rejected this Haitian demand as inadmissible, ill-founded and lacking legal basis; France, they argued, had returned the Spanish part of the island to Spain in the Treaty of Paris of 1814, which annulled the Treaty of Basel of 1795. Therefore, this territory was not theirs to dispose of, therefore, the Haitians were occupying Spanish territory, not French.
Furthermore, the French were not going to reward Haiti by giving the Haitians a territory that did not belong to France, when the Haitians made France lose its most profitable colony, Saint-Domingue, in the first place. The French-Spanish relations which had been tense during the Trienio Liberal (1820–1823) had markedly improved following the imposition by force of an absolutist regime under Ferdinand VII which was Bourbon, Legitimist and Absolutist, very much like Charles X. Whatever the political expediency might have been (and there seemed to be none), Charles X was not of a disposition to reward a revolutionary Republic at the expense of a regime he viewed very much as kindred.
The Haitians alleged that they were militarily occupying the territory of an independent state, the Republic of Spanish Haiti, free of any power, and that its president and founder José Núñez de Cáceres had recognized the Haitian occupation. The French rejected this claim of the Haitians, since the Republic of Spanish Haiti was just an attempt at a state that existed only for two months and a few days, and that never received official diplomatic recognition, neither of its metropolis, nor of any other country besides Haiti.
Furthermore, France and other major powers had not yet (as of 1822) recognized Haiti as an independent nation, therefore, the French argued, the colony of one country could not recognize the sovereignty of the colony of another.
At the same time, the Haitians wanted France to force the Dominicans to pay the Haitian Independence Debt, and to also collect local taxes from them, so that they would contribute to the payment of this debt. The French rejected this claim by the Haitians. France did not have to collect compensation from the inhabitants of the Spanish part since they had not created any loss for France that had to be compensated. Furthermore, the French never created slave plantations on the Spanish part of the island when it was under French control.
Indemnity payment
The payments were designed by France to be so large that it would effectively create a "double debt"; France would receive a direct annual payment and Haiti would pay French bankers interest on the loans required to meet France's annual demands. France viewed Haiti's debt as the "principal interest in Haiti, the question that dominated everything else for us", according to a French minister. Much of the debt would be paid directly to the French state-owned Caisse des dépôts et consignations (CDC). France ordered Haiti to pay the 150 million francs over a period of five years, with the first annual payment of 30 million francs being six times larger than Haiti's yearly revenue. Haiti was obliged to take out a loan from the French bank Ternaux Gandolphe et Cie to make the payment. Ternaux Gandolphe et Cie in turn organized a bond auction to raise the sum. A consortium led by Jacques Laffitte agreed to pay 800 francs for each of the 30,000 thousand-franc bonds to the CDC. Of the 24 million that the Laffitte consortium paid to the CDC, 20 million had itself been borrowed at 3 percent interest from the CDC. In 1826, Haiti shipped the contents of its treasury to France in bags to make up the remaining 6 million francs.
Haiti continued to take out loans from France and the United States in order to fulfill payments. Such large payments became impossible for Haiti and defaults occurred immediately, with Haiti's late payments often raising tensions with France. Ternaux Gandolphe et Cie seized assets of the Haitian government for failing to pay on its loan, though the Tribunal de la Seine overturned these actions on 2 May 1828. On 12 February 1838, France agreed to reduce the debt to 90 million francs to be paid over a period of 30 years to compensate former plantation owners who had lost their property and slaves; the 2004 equivalent of US$21 billion. President Boyer, who agreed to make the payments to prevent an invasion, was forced from Haiti in 1843 by citizens who demanded lower taxes and more rights.
By the late 1800s, eighty percent of Haiti's wealth was being used to pay foreign debt; France was the highest collector, followed by the German Empire and the United States. Henri Durrieu, head of the French bank Crédit Industriel et Commercial (CIC), was inspired to increase revenue for the bank by following the example of state-run banks acquiring capital from other distant French colonies such as Martinique and Senegal. In 1874 and 1875 Haiti took out two large loans from CIC, greatly increasing the nation's debt. French banks charged Haiti 40% of the capital in commissions and fees. Thomas Piketty described the loans as an early example of "neocolonialism through debt".