File No. 882.51/809
The Chargé in Liberia (
Bundy) to
the Secretary of State
No. 213
Monrovia,
May 15, 1918.
Sir: Referring to Legation’s confidential
despatch No. 185, diplomatic, dated February 16, 1918,1 with which was enclosed
copy of an agreement proposed by the local manager of the Bank of
British West Africa as the basis of a financial arrangement between
Liberia and the bank, I have the honor to transmit herewith copy of
this agreement as it has been recast and amended by the manager.
The Secretary of the Treasury has furnished the Legation this copy
and informs me that he received it direct from the hands of the bank
manager who persistently urges him to advocate the adoption of the
scheme by the Government. The agreement in its revised form is
undoubtedly much more onerous in its conditions as they relate to
the Republic than it was originally.
It seems from what I have learned that the bank manager does not
desire to show his hand too openly in pushing this agreement, but
rather desires that Liberian officials take it up and foster
sentiment in its favor as if the scheme really originated within the
Government.
Nothing has as yet transpired to indicate that the bank manager is
making any progress, so far as the Government is concerned, with the
agreement. And under normal conditions it would doubtless never be
given serious consideration. But the day comes on apace when the
Republic will have to get financial assistance from some source.
When that time arrives, and at the present rate it can not
[Page 522]
be much more than three
months away, the Government will be compelled to face the facts:
- 1.
- That all custom revenue, head money, and rubber tax are
pledged to the receivership which is heavily in arrears with
the fiscal agents of the refunding loan.
- 2.
- That all internal revenues, excepting the Post Office
Department which is now not self-sustaining, are pledged to
the Bank of British West Africa, Ltd., to which the Republic
will owe $100,000.
With all its assets hypothecated in this fashion, the task of getting
money to run the Government will evidently not be an easy one.
It may be that the bank looks forward to this crisis as affording it
the opportunity to obtain the hold desired on the Republic’s
finances as the consideration required before giving the Government
that assistance it must have to continue its existence.
Officials of the Government make frequent inquiry of the Legation as
to whether the Government of the United States is favorably
considering Liberia’s appeal for aid as communicated in my despatch
No. 169, dated January 15, 1918.1 It is generally felt that if the needed
assistance can not be gotten from or through the United States, the
future outlook for the Republic is exceedingly gloomy. Accordingly
the Liberian Government is anxiously waiting for some word from the
Department on this very vital matter.
I have [etc.]
[Enclosure]
Proposed agreement for financial reforms
An agreement made this _ _ _ _ _ _ _ day of _ _ _ _ _ _ _ _ _ _ _
_ _ in the year of Our Lord one thousand nine hundred and _ _ _
_ _ _ _ _ _ _ _ _ _ between the Government of the Republic of
Liberia (hereinafter called the Republic), of the first part,
and _ _ _ _ _ _ _ _ _ _ _ _ _ (hereinafter called the Bank), of
the second part, which witnesseth
- 1.
- That the Republic hereby appoints the Bank as its sole
official bankers for a period of twenty-five years or
thereafter until such further period during Which the
Republic shall be indebted to the Bank, subject to the
conditions mutually agreed upon as hereinafter
enumerated.
- 2.
- That the Republic hereby creates and will continue to
recognize throughout the life of this agreement a
financial advisory board (hereinafter called the Board)
consisting of the Government Secretary of the Treasury,
the General Receiver of Customs, the Bank manager for
Liberia, the Chairman of the Ways and Means Committee of
the Senate, and one annually elected member from the
commercial community of Monrovia.
- 3.
- That the Republic shall have the right if required by
it to appoint a commission (which shall include if
necessary members drawn from other countries), every
five years to enquire into and report upon the general
conditions in the Republic resulting from the operation
of this agreement, for reference to the United States of
America, Great Britain, and France with a view to any
necessary redress.
- 4.
- That the authority of the Board shall be final in all
matters of finance connected with the internal revenues
of the Republic, including receipts, expenditures, the
appointment, prosecution, and dismissal of revenue
officers, during the life of this agreement, and that
the Board shall solely supervise all such
matters.
- 5.
- That the Board be empowered hereby to draw up an
annual budget and estimates in respect of internal
revenues, which shall be submitted within one
[Page 523]
week of the
opening of the annual sessions of the Senate and
Legislature of the Republic for their information, and
same shall be strictly observed and binding upon all
officials and departments concerned.
- 6.
- That the Board shall be empowered hereby to draw up
such laws, regulations, and by laws as in its opinion
may be necessary for the proper financial conduct of the
Republic under the terms of this agreement.
- 7.
- The Board shall in no instance be permitted to grant
concessions or otherwise decide on financial matters not
within the scope of this agreement, unless it has first
obtained the approval and sanction of the Senate and
Legislature of the Republic.
- 8.
- That the Republic hereby agrees to refer all questions
of finance and applications for concessions to the Board
for their final approval before any measures in
connection with same shall be made law.
- 9.
- That the Board shall be empowered to create and
maintain an armed police or constabulary force of not
more than 500 men and officers to be utilized for
revenue purposes, as distinct from customs purposes,
which force shall be recruited entirely from the
citizens of the Republic and officered by regular
officers only as selected by the Board from any
first-class army in the world.
- 10.
- That the Bank shall keep all Government credits
accounts free of all charges, and to keep all Government
debit accounts at 7 per cent per annum interest on the
daily balances of same.
- 11.
- That the Bank shall countersign all cheques drawn
against Government accounts, subject to arrangements
made from time to time by the Board, and that any cheque
not so signed shall be invalid and inoperative.
- 12.
- That the Bank shall inaugurate at its own expense such
systems of accounting as in its opinion may be necessary
for the proper management of Internal revenues received
by it, which systems shall be binding upon all officials
and departments concerned.
- 13.
- That the Bank shall submit to a system of auditing of
all Government accounts kept by it, as shall be provided
for by the Board.
- 14.
- That the Bank shall appoint travelling collectors in
its own pay, whose duty it shall be to obtain and
collect revenues already collected by Republican revenue
commissioners in the pay of the Republic, and to report
on and receive local complaints on the work of such
commissioners to the Board.
- 15.
- That the Bank shall be required to open under its own
management and officers full branches at Monrovia, Grand
Bassa, Sino, Cape Palmas, and one other branch in the
interior as shall be decided by the Board. And that the
Bank shall, at the request of the Board, open such other
branches as may be considered necessary, provided that
proportionate remuneration be made by the Republic as
stipulated for in Clause 16.
- 16.
- That the Bank shall open full agencies at such other
places in the Republic as shall be required by the
Board, provided the services of an European firm of
financial repute and good standing can be obtained at
such places.
- 17.
- That all transfers of money to places within the
Republic effected by the Bank on behalf of the Republic
shall first be authorized by the Board, and shall be
subject to a commission of ½ per cent if made in
account, or 1 per cent if made in coin, plus all proper
expenses connected with such transaction.
- 18.
- That all transfers of money to places without the
Republic effected by the Bank on behalf of the Republic
shall first be sanctioned by the Board, and shall be
subject to a commission of 1 per cent if made in
account, or 1½ per cent if made in coin, plus all proper
expenses connected with such transaction.
- 19.
- That the Bank shall keep proper registers of the
Liberian Government internal indebtedness bonds as
created by the acts passed by the Senate and Legislature
of the Republic in 1917 and 1918, and to arrange for the
issuance in proper form of such bonds in full
conjunction with the Board.
- 20.
- That the Bank shall, at the request of the Board,
during the life of this agreement guarantee and pay to
the Republic the minimum sum of $500,000 per annum,
payable in equal monthly instalments which shall be
applied as hereinafter stated, such sum being met out of
revenues received by the Bank and such advances to make
up any deficiency as may be necessary.
- 21.
- That the advances made by the Bank against revenues or
loans shall be utilized only in accordance with the
budget and estimates drawn up by the board as provided
for in Clause 5 in this agreement, limited to the
following purposes:
- (a)
- Payment of official salaries as per Schedule 1
attached hereto which shall form part and parcel
of this agreement, up to a sum not exceeding
$250,000 per annum;
- (b)
- Maintenance of the police force as provided
for in Clause 9 in this agreement, including
salaries as per Schedule 2 attached hereto which
shall form part and parcel of this agreement, up
to a sum not exceeding $75,000 per annum;
- (c)
- Maintenance of roads and highways up to a sum
not exceeding $24,000 per annum;
- (d)
- Maintenance of telegraphs up to a sum not
exceeding $18,000 per annum;
- (e)
- For educational purposes and upkeep of schools
up to a sum not exceeding $12,000 per
annum;
- (f)
- For providing for the redemption and interest
on the bonds of the Republic up to a sum not
exceeding $10,000 per annum;
- (g)
- For upkeep of harbour buoys and lighthouses up
to a sum not exceeding $5,000 per annum;
- (h)
- For upkeep of public buildings and other
general contingencies, including stationery,
furniture, insurance, and such other matters
approved of by the Board in each instance, up to a
sum not exceeding $12,000;
- (i)
- Payment of the bank fee of $50,000 per
annum;
- (j)
- Provision for payment of all Bank interest and
charges as may be incurred by adjustment with
above provisions, but only in connection with
heads (c), (d), (g),
and (h), if
necessary.