File No. 882.51/528.

The American Chargé d’Affaires to the Secretary of State.

[Extract.]
No. 84.]

Sir: I have the honor to make the following report in continuation of my No. 76 of January 13, 1913, respecting the commission which has been proposed as a means of adjusting the claims which the German merchants have filed against the Liberian Government.

By reference to my cable of January 17, it will be noted that I stated that the German Government would propose a commission of three, the Governments of Liberia and Germany to appoint one each, and these two were to be empowered to choose the third member. This proposition, as emanating from the German Government, was stated to me verbally by the German Consul, who has rather an indifferent knowledge of English. Later I saw a written statement of the proposition as presented to the Liberian Government by the German Consul, and the manner of choosing the third member of the commission was materially different from that orally stated to me by him. Instead of the Liberian and German commissioners choosing the third commissioner, the German Consul’s written proposal provided that the Governments of Liberia and Germany should agree on a neutral man to become the third commissioner. I found that the Liberian Government readily accepted the proposal as written, [Page 673] and I let the matter pass without comment, since indeed it might easily have happened that through his deficient knowledge of English, the German Consul may have thought he had stated the proposition to me orally as he had written it to the Liberian Government. I felt at the time that a great deal more difficulty would be experienced in arriving at a choice of a third member by referring it to the two Governments to make the selection, than if the two members designated by the German and Liberian Governments had power to choose the third member; and such has proved to be the case. * * *

After rejecting the names I proposed, and intimating that any others I might bring forward would scarcely prove acceptable to the merchants, the German Consul proposed Mr. W. E. O’Connell, agent at Monrovia for the Paterson Zochonis Company, whose headquarters are in England. Mr. O’Connell is locally called an Englishman, but I believe that he is actually of Irish extraction. He bears a good business reputation at Monrovia, but the Liberian Government regards him as a man of mediocre ability, and not able to resist much pressure.

When the negotiations reached this stage, it was very apparent that the Germans were trying to secure some unfair advantages. In the first place the German Consul let it be known that it was the purpose of the German Government to nominate Mr. Lange, the German Receiver of Customs, as its representative on the commission. The Liberian Government and Mr. Reed Paige Clark, General Receiver of Customs, immediately objected to this, procedure. Enclosure No. 1 is a copy of a letter received by this office from the General Receiver, in which his objections are stated.

The Liberian Government has taken the position, that Mr. Lange is a Liberian official and as such is not available for assignment by the German Government to do work on the contemplated commission or otherwise, irrespective of the Liberian Government’s wishes, so long as he is under contract to it. The German Consul claims that Mr. Lange is not a Liberian official, and can be designated to serve on the commission by, the German Government, whether the Liberian Government agrees to it or not. The German Consul has informed me that if the Liberian Government persists in maintaining the position it has taken, the German Government will regard such action as distinctly unfriendly to it, and quite likely to lead again to strained relations between the two Governments. The German Consul asked me whether or not I thought that Mr. Lange was a Liberian official, and I replied that it was my opinion that he was, and that the Department of State had expressed this view to the German Chargé d’Affaires at Washington when the question of Mr. Lange acting as German consular officer and receiver of customs at the same time was under discussion.1

I am of the opinion that the German Government is preparing to use great pressure to carry this point. In view of the position taken by the German Government with respect to Mr. Lange, the reason for such persistent efforts on its part to have the third commissioner chosen before either of the other two members were selected became [Page 674] apparent. The Germans’ evident desire was to fill the third place with a neutral, non-American commissioner, and then force Mr. Lange on as the German representative. In this way they expected to dominate the commission.

When the Liberian Government recognized that the German Government would not recede from its contention, a verbal statement was made to the German Consul, to the effect that if Mr. Lange were nominated as the German member of the commission, then the Liberian Government would be obliged to insist that Mr. Reed Paige Clark should be the third member. The German Consul informed me that he would get an expression from his Government with reference to this statement but rather doubted that it would be acceptable to the German merchants.

While the personnel of the commission was receiving so much attention, the German Consul came forward with a very extraordinary proposition with respect to the payment of the claims. Although the members of the commission are not yet chosen, and the amount of the damages that will be awarded are necessarily unknown, still the German Consul demanded that the Liberian Government agree to pay the full amount of the commission’s awards in one year (see enclosure No. 2). When this proposition was presented to me by the German Consul, and my views requested, I stated that it was my opinion that the proposition was not fair either to Liberia or to the Receivership. I added that I thought it was a very undesirable policy to force the Liberian Government to contract to pay an indefinite amount in one year without regard to the Receivership or the Financial Adviser. Moreover, the principle involved would, to my mind, not be changed if the exact sum in question had already been definitely ascertained.

I have been endeavoring to discern the motive underlying the attitude the German Government has assumed with respect to the payment of these claims, and I believe it may perhaps be accounted for on the ground that there is a feeling among the Germans that if the advice of the Receivership is given Liberia with regard to the terms of settlement, it is very probable that the time will be stretched out over several years. Furthermore, it is apparently believed that the British and French receivers and the American General Receiver are hostile to these claims, and would be inclined to favor the Liberian Government when the terms of adjustment are decided upon. Another fact of significance is that there are merchants of other nations, notably English and Dutch, having claims against the Liberian Government growing out of these same disorders, and from statements inadvertently dropped by the German Consul during some of our conversations he appeared, to be fearful that more favorable terms of settlement will be granted to the English and Dutch claimants than to the German. In order to forestall any such arrangement, the German Consul seems to be taking a course which is designed to secure preferential treatment of the German claims.

In talking over this whole matter with President Howard he has taken occasion to say to me many times, that he does not propose to be intimidated any further by the German Government when he feels that gross advantage is being taken of Liberia and there is little or no regard for justice and fair play. If threats of force are [Page 675] again used by the German Government to carry its points irrespective of the right in the matter, I believe it is entirely possible that the Liberian Government will take such a stand that the threats will have to be translated into action, in which event a crisis will of course be precipitated. The Liberian Government now feels that Germany is bent on her destruction, and that no more concessions can be made merely for the purpose of pacifying the ambitious program of the Germans in Liberia. I have used much effort to reassure the Liberian Government that I feel that its fears with respect to German designs in Liberia are not well founded, but I can not say that I have been very successful in changing the views that it now holds. The Liberian Government continues to point to the aggressive and unfriendly action of the German Government, despite its protestations of friendship, as a much more convincing proof of the soundness of its views than all the arguments and logic I can present to the contrary.

I think that the situation is aggravated a great deal by the sentiment which most Germans residing in Liberia hold and express, that Liberia has no right to exist. Many times this statement has been made in my hearing by Germans. The German Consul, however, has repeatedly told me that he had been instructed by his Government to do all he could to preserve the autonomy of the Liberian State, and that it was his intention to observe carefully his instructions. This position of the German Government has also been stated in conversation by the German Consul to the Liberian Government, but it is pointed out to me by Liberian officials that the acts of the German Consul do not square with his words, and the German professions of friendship and kindly interests are insincere. I feel that I can candidly say that if it had not been for the fact that I have continually acted as a mediator between the Liberian Government and the German Consul in the difficulties which have arisen, an open rupture would have already taken place between the Liberian and German Governments. The view-points of each Government are so diverse that there seems to be very little common ground upon which to reach understandings.

On an entirely independent basis I have been compelled to reflect considerably upon the German attitude in Liberia, and it appears to me that in certain of its features it challenges, or at least to some extent is disregardful of, American primacy in Liberian affairs. I have never been unmindful of the instructions to me in the Department’s cable of December 19, but I am firmly convinced that the success of the American policy in Liberia, as I understand it, is totally dependent on the Government of the United States retaining unimpaired its leadership in Liberian affairs. In support of this conviction I have always used my best endeavors.

I am [etc.]

Richard C. Bundy.
[Inclosure 1.]

The General Receiver of Customs to the American Chargé d’Affaires.

Sir: It has recently come to my ears that Mr. Lange, the German Receiver of Customs, has been suggested as the German member of the mixed commission [Page 676] which, it is proposed, will investigate the claims of certain merchants against the Liberian Government.

Without entering into a discussion of the matter, I wish to protest most emphatically against the assignment of Mr. Lange to the commission. An appreciable per cent of his time would necessarily be taken up by the work of the commission and he would be unable to give the receivership work the attention that it imperatively requires. Mr. Lange is scheduled to go on leave April 17th and he can not possibly be spared in the meantime.

May I not rely upon you to put this protest before the Department in such a way as to bring about the Department’s objection to the proposed assignment of Mr. Lange?

I am [etc.]

Reed Paige Clark.
[Inclosure 2.]

The Secretary of State of Liberia to the American Charge’ d’Affaires.

No. 81.]

Dear Mr. Chargé d’affaires: For the information of your Government, I beg to submit to you the following facts in connection with the proposed commission to enquire into and pass upon the claims of German merchants, presented to the Liberian Government, for losses alleged to have been sustained by them, growing out of the recent disorders at Brewerville and River Cess and its adjacent coast.

On the 30th of January the Imperial German Consul called at the Department of State and intimated the willingness of his Government to submit the claims of the German merchants in question to an arbitration commission as proposed by the Liberian Government, provided that such a commission be composed of three members only, one to be named by the German Government, one by the Liberian Government and the third by agreement of the two Governments. This proviso made by the German Government to the Liberian Government’s proposal was agreed to by the latter. It was also agreed,

(a)
That each Government pay the expense of its own member of the commission, and the expense of the third member be equally divided between the two Governments.
(b)
That the majority decision of the commission be final and binding upon the two Governments.
(c)
That the period for the sitting of the commission do not to exceed one month.
(d)
That on all unpaid amounts of the claim which may be awarded by the commission, interest of 5% be charged to the Liberian Government.

The Consul, however, declared that his Government desired that the time for the payment of the amount of the claims which may be awarded by the commission be fixed in these preliminary arrangements for the commission, and suggested the term of one year. In reply to this demand of the German Government, I expressed to the Consul the hope of the Liberian Government that his Government would not press the point of fixing the time for payment at the present stage of these negotiations, for the following reasons:

1.
Because the Liberian Government would find it difficult to fix the time for the payment of a sum of money the amount of which is unknown and not yet declared by the commission.
2.
Because the Financial Adviser of the Republic will necessarily have to be consulted before the Liberian Government could fix the time for the payment of such amounts as may be declared and awarded by the commission, as under the provisions of Article 4, Sec. 4, page 13 of the refunding loan agreement the Receivership is charged with the responsibility of providing for the payment of all such claims.

Therefore the Liberian Government respectfully and earnestly requests the United States Government to use its good and friendly offices with the Imperial German Government to induce it to withhold its demands of fixing the time of payment of such portions of the claims that might be awarded until they have been finally passed upon by the proposed commission.

I avail [etc.]

C. D. B. King.