876.10/10–1052
Memorandum of Conversation, by Douglas B. Smith of the Investment and Economic Development Staff
Subject:
- Eximbank Activities in Liberia
Participants:
- Eximbank—Messrs. Dennison and Duvall
- TCA—Messrs. Meier and Rives
- AF—Messrs. Feld and McBride
- DRN—Mr. Disdier
- ED—Mr. Smith
Messrs. Dennison and Duvall1 have just returned from a four weeks survey trip in Liberia. At the suggestion of ED a meeting was arranged to discuss their impressions of Liberia with interested members of the Department.
[Page 490]Mr. Dennison said that their primary purpose in going was to activate the Eximbank financed road project. In the one and a half years since the credit was granted no funds have yet been disbursed.2 Soon after their arrival they were able to obtain Bank agreement to approve the first five mile section of the Monrovia–Ganta Highway. They looked into the rest of the program very carefully, rejecting certain parts and adding other elements which were not included in the plans.
Duncan3 was persuaded to reject the $½ million equipment repair depot. In its place he agreed to substitute two or three mobile repair shops which could repair equipment at the scene of a breakdown. Mr. Dennison said he and Duvall carefully checked over the $450,000 of equipment purchased for the road program and for which the Liberians are asking Eximbank reimbursement. Most of this equipment has already been heavily used for other operations such as that of the $130,000 Payne Airstrip. (He felt that the Payne airstrip would prove to be of little value.) Considering the expected remaining life of the equipment Dennison and Duvall are ready to recommend that the Bank make only 75 percent reimbursement. And this should be done only if the Liberians set up some reasonable rental system to cover the wear and tear on the equipment when it is being used for public works other than road construction.
Duvall objected rather strongly to the fact that most of this equipment was being used solely by the West African Construction Company. It was parked on the company’s lot and put into service for whatever jobs the company was working on with no proper accounting being made to the Bureau of Public Works. Mr. Duvall added that he did not think that the equipment would last long enough to finish the road program. This raises a very serious question as to where money is going to be found to pay for equipment for the final $1 to $2 million of construction work.
Both Dennison and Duvall were rather pleased at the progress which was being made on the water and sewage system.4 With few exceptions the work is on schedule. Their one concern was that although water would be flowing through the lines early next year no arrangements had been made to tap in the consumers. This lack in planning was pointed out to Duncan who assured them that immediate remedial steps would be taken.
The mining operations in which the Bank has a $4 million loan5 also [Page 491] was [were] inspected. The company became involved in disputes with some of its customers earlier this year as a result of shipping them ore from low grade pockets. As Republic Steel phrased its complaint “it was paying freight on shipping dirt across the Atlantic”. Mr. Dennison said that this trouble had been due to a lack of adequate supervision on the job. The company needs another mining engineer to directly supervise the mining operation itself. The manager, a mining engineer, is doing a good job but is saddled with too many other duties.
Mr. Duvall said that they had been very much impressed by the work of Porcella on the Liberia Company cocoa plantation.6 The operation was being handled in a very efficient manner. Additional supervisors were being acquired to eliminate the “one man show” aspect of the operation. Dennison and Duvall talked both with Porcella and Frank Pinder7 and other agricultural technicians of the TCA staff on the question of efficient size of operation. They were convinced that appreciable savings could be obtained in a 10,000 acre plantation. The risk involved did not now seem too great. The hazards of cocoa farming fall mainly in the first two or three years after planting. The Liberia Company has come through these years in very good shape.
Duvall discussed the electric power question. He said that everyone he talked to was very much shocked with the proposed scheme of the Bureau of Reclamation. Duncan and other Liberians readily recognize that a $22 million project was far beyond their means. The Liberians had banked heavily upon a hydroelectric scheme and had assumed that Williams8 was working on a plan which would supply them with a $4 to $5 million system.
Duvall prefaced his remarks on an inspection trip of the Monrovia power system with the comment that he was not an electrical engineer. He was surprised to find the system in fairly good working order. From the remarks of Williams and others he had previously assumed that it was in the final stages of collapse. According to the English engineer in charge of the power plant the three diesel units which had been turned over to the Liberians by the Navy were good for many more years service. However, in meeting peak loads they had to be operated at full capacity. Fortunately while one unit is being renovated the company is getting power from the Liberian Mining Co. units at dockside. Duvall pointed out that this source could not be depended upon indefinitely as eventually the Liberian Mining Co. would be making full use of its units for its own needs.
[Page 492]Mr. Duvall admitted that in the next two or three years Monrovia probably could use twice the power which can be supplied by the present system. Nevertheless, he did not think that the bank should consider a power loan until the Liberian needs were surveyed by a competent engineering group. He was strongly opposed to the Bureau of Reclamation making this survey. Rather he suggested that the Liberians on their own should hire an approved engineering company. When asked if Westinghouse or General Electric would be suitable candidates he answered in the affirmative.
It is understood that these companies will under certain circumstances perform survey work of this type at no expense to the country or community involved.
- Ellery Dennison and John Duvall represented the Export-Import Bank.↩
- The $5,000,000 credit had been authorized on Jan. 11, 1951.↩
- Henry B. Duncan was a Liberian member of the Joint Liberian-United States Commission for Economic Development. As Liberian Secretary of Public Works and Utilities, he had visited Washington between October 1950 and February 1951 to help set up a Point Four Program for Liberia.↩
- The sum of $1,350,000 had been earmarked for this by the Bank on June 14, 1951.↩
- This had been approved by the Bank on Apr. 27, 1949.↩
- Santiago Porcella III was a forestry graduate of Louisiana State University. He managed the cocoa plantation which was a holding of the Liberian Development Corporation, which had taken over the assets of Stettinius Associates-Liberia, Inc. and the Liberia Company.↩
- Pinder had been assigned as an Agricultural Adviser on May 29, 1952.↩
- Clarke Williams was the District Engineer in Liberia.↩