File No. 882.51/519.
The American Chargé d’Affaires to the Secretary of State.
Monrovia, January 13, 1913.
Sir:I have the honor to make the following report with respect to the efforts made to reach a satisfactory settlement of the claims of the German merchants:
During the first discussion concerning these claims, it was very apparent that the German Consul and nearly all of the merchants were strongly opposed to permitting the claims to go before the Liberian courts for adjudication. The fact that most of the claims were for losses sustained by the merchants at places not ports of entry, and were therefore not legally entitled properly to become the subject of diplomatic representations, according to contract and Liberian laws, seems to have made little or no difference in the firmness of the German contention that the claims should not be submitted to the Liberian courts.
After spending many weary days in futile discussion, I proposed as a compromise that the matter should be finally decided by an international commission composed of five members, the Governments of the United States, Germany, France, Great Britain and Liberia appointing one member each; the findings of a majority of the commission to be final and binding alike upon the Governments of Germany and Liberia. I informed the Liberian Government, and the German Consul as well, that I could not pledge the Government of the United States to support this proposal, as it had emanated from me personally and without the knowledge of my Government. However, [Page 667] I promised to lay the matter before the Department and secure, if possible, some expression from it as to the feasibility of such a scheme, and ascertain whether or not the Government of the United States would favor an arrangement of this kind. Meanwhile, I suggested that the Liberian Government acknowledge liability for the losses and make a proposal to the German Government to adjust the claims along a line in keeping with the international commission idea; the ultimate adoption of this method to be of course contingent upon all of the Governments mentioned becoming a party to it. The Liberian Government acted upon my suggestion and replied to the German Consul’s demands respecting the claims (inclosure No. 1) in terms which called for the adjudication of the claim’s either by the Liberian courts or by an international commission (inclosure No. 2). Adjudication of claims by the Liberian courts was included in the proposal of adjustment to prevent waiving of the right to settle the matter in that way if it should become expedient to revert to that method. Before presenting the international commission plan to the Liberian Government I had fully and freely discussed the proposition with the British Consul General, the French Vice Consul and the German Consul. All agreed that it appeared to meet the conditions adequately, but could do nothing more than give their personal approval to the scheme before communicating with their respective Governments. This, I understand, they have done. What results have attended their efforts is not known to me yet.
I was led to propose the commission plan not only as a compromise, but also for the following additional reasons:
- First. It appears to me very likely that it might be quite difficult to have these claims treated with absolute fairness by the Liberian courts at this time. There is so much anti-German sentiment in the country at present that the element of feeling might easily prevail where reason ought to control. Without doubt the Executive Government would be inclined to deal perfectly fair with the question, but it is questionable whether or not it could exert enough influence on the courts to secure an equitable adjustment of the claims. Then too, it seems to me to be inadvisable to encourage the Executive Government to exert influence on the courts even in the interest of a righteous cause, as such a procedure is distinctly irregular. At this time all efforts ought to be directed toward the elimination of practices that are open to question.
- Second. If the claims are presented to the Liberian courts, it would be difficult to have the adjustment satisfy the merchants should the awards be much reduced from the original amounts presented, and it is not unlikely that the claims will be exorbitant. An international commission, acting without prejudice or bias, could well make large reductions and still not have its findings questioned or repudiated.
- Third. The payment of these claims, by whatever means they are adjudicated, becomes a matter of great importance since the Receivership will undoubtedly be called upon to furnish the money to liquidate them, and an international commission’s findings would therefore probably receive much more consideration than those of the Liberian courts. Moreover, it seems to me that any additional obligations contracted by the Liberian Government ought to be with [Page 668] the knowledge of all the Governments that are identified with the loan agreement, because new obligations might seriously impair the security of the bonds. While the proposal of an international commission ignores the Liberian courts, which normally ought to treat these claims, I believe this method uses a means that will protect the Republic as effectively as the courts, perhaps even more so. In any event the precedent thus established cannot, in my opinion, embarrass the Liberian Government in the future should other claims arise against it.
Other reasons could be enumerated, but I think those already stated are sufficient to indicate my point of view.
It is significant that when these claims were first talked over by the German Consul and myself it was intimated to me that in the aggregate they would not amount to more than twenty-five or thirty thousand dollars. After the international commission plan of settlement was proposed, the claims took a sudden jump to sixty thousand dollars or more. It is my personal opinion that the merchants will endeavor to secure damages not only for goods actually lost, but also for profits they would have made if their business had been going on without interruption in the disturbed areas.
Before closing this despatch I had a call from the German Consul, who informs me in confidence that his Government thinks a commission of five too large and unnecessary, and it makes a counterproposal, that the commission be composed of three members, one each representing the German and Liberian Governments, and these two to be empowered to choose a third member who will be a disinterested party. This modification might be acceptable, it appears to me, if the other Governments have no objection. Personally, think that a commission composed of five members chosen as before indicated would give better satisfaction to all the interests involved. However, if that plan cannot be carried out, the next best thing will be tried. I expect that certain phases of this matter will have been taken up with the Department by cable before the arrival of this despatch. Should that not be the case, I earnestly request that the Department furnish me with its views on this matter at the earliest practicable moment.
I am [etc.]