File No. 882.51/405.
The Secretary of State to Messrs. Kuhn, Loeb & Co.
Washington, July 10, 1912.
Gentlemen: In accordance with the request of Dr. Roland P. Falkner, Financial Adviser of the Republic of Liberia, the Department urged upon the Government of Liberia the formal establishment on July 1 of the Receivership provided by the loan for the rehabilitation of the finances of Liberia. It is learned from the reports received from Monrovia that this proposition was favorably considered by the Government of Liberia which was disposed to act in the manner suggested. It appears that a conference of the Liberian Cabinet with the Chief Inspector of Customs, Mr. R. Sharpe, and the future General Receiver at Monrovia, Mr. Reed Paige Clark, was held at once and reached the opinion that the functions of the new Receivership were inconsistent with the terms of the Erlanger agreement. It further appears that Mr. Sharpe, who has been designated as British Receiver, but who has not yet received his commission, is opposed to the assumption of duties as General Receiver by Mr. Clark before the loan is concluded and bonds issued and it is to be inferred that Mr. Sharpe holds to a literal interpretation of the Erlanger agreement that moneys received by him on account of the Liberian Government shall after satisfaction of the Erlanger loan series be paid directly to the Liberian Government and not to any other body.
While the Department has urged the establishment of the Receivership in form it has not felt very strongly that this was in any way an indispensable requisite to the continued execution of the loan contract and it is of the opinion that under existing circumstances the only establishment of the Receivership possible would have been a mere declaration that the Receivership existed, leaving to a future date the inauguration of operations. Such an action, however, would [Page 682] be obviously a formality that the Department can not believe it to be in any way vital.
The Department has expressed to Mr. Clark that there can be no real authority conferred upon the Receivership until the actual issue of the bonds provided in the contract.
I am [etc.]