Papers Relating to the Foreign Relations of the United States, 1918

File No. 882.51/814

The Consul at London ( McBride) to the Secretary of State

No. 9

London, July 15, 1918.

Sir: I have the honor to enclose herewith a draft of a supplemental agreement between the Government of Liberia and the Bank of British West Africa.

The financial situation in Liberia has become such that some form of assistance is required at once, and this proposed agreement has been submitted by the Bank of British West Africa to the Foreign Office in London, to be later forwarded to the French Government at Paris and the American Government at Washington.

I am informed by the manager of the Bank of British West Africa that if the necessary assistance is to be given, action should be taken as soon as possible, and I am therefore sending the draft of the agreement in order that the Department may be acquainted with its provisions.

I have [etc.]

Harry A. McBride

[Enclosure]

Draft agreement of June 24, 1918

Supplementary agreement entered into this _ _ _ _ _ _ _ _ _ _ _ _ _ 1918 between Government of Liberia (hereinafter called The Government) of the first part and Bank of British West Africa Limited (hereinafter called The Bank) of the second part.

1. This agreement shall be supplemental to and shall be construed in conjunction with the agreements of 4th February 1916 and 21st February 1917.¹

2. (a) In addition to the services rendered by the Bank under the foregoing agreements the Bank, in consideration of the guarantee given in the agreement of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1918 signed by representatives of France, United Kingdom, United States of America, and Liberia, shall during the month of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 1918 and each month thereafter during the continuance of the present war and for twelve months thereafter, at the request of the Liberian Government approved by the General Receiver of Customs, advance to the Government a sum not exceeding 10.000 dollars for the purpose of making payments authorised by the budget as passed by the Liberian Legislature. The money so advanced shall be placed to the debit of a No. 3 account. Provided that if and when the balance standing to the debit of the No. 3 account shall have reached the sum of 150.000 dollars no further advances shall be granted by the Bank.

(b) In consideration of the agreement contained in the last preceding subclause (a) and of the advances to be made thereunder, the Government hereby extend the life of the depositary agreement until the 31st December 1922, or until such later date as and when the entire indebtedness of the Government to the Bank under this agreement shall have been repaid.

3. In addition to the monthly advances authorised in Clause 2 the Bank shall, at the request of the Liberian Government approved by the General Receiver of Customs, advance to the Government and debit to their No. 3 account a sum not exceeding $10.000 in any calendar year for the purpose of making payment of interest upon the new 3 per cent internal bonds and for redemption of such internal bonds with any balance of the said $10.000 not absorbed by interest payments. All bonds so redeemed shall be handed to the Bank for cancellation and shall remain in the custody of the Bank.

4. If at any time during the life of this agreement, owing to the exigencies of war or by reason of general or specific instructions issued by the British Government, the Bank shall be unable to give effect to any or all of the provisions of this agreement or the depositary agreement, it is understood and agreed that no liability shall attach to the Bank.

5. The terms upon which the Bank shall make advances to the Government under Clause 2 subclause (a) and Clause 3 of this agreement are as follows:

(a) A commission of one-half of one per centum upon the principal amounts of each loan.

(b) Interest to be charged at the rate of seven per centum per annum upon the daily balance standing to the debit of the Government’s No. 3 account, with the Bank.

(c) The commission shall be paid at the time each loan be made and a statement of interest shall be furnished by the Bank to the Secretary of the Treasury monthly, when settlement will be made.

6. When the Bank under the provisions of Clause 2 (Section (a)) or Clause 4 of this agreement shall cease to make further advances to the Government, all of the revenues deposited with the Bank up to the sum of ten thousand dollars ($10.000) monthly shall be available for expenditure by the Government as authorised by the budget notwithstanding any indebtedness which may be outstanding against the Government with the Bank at that time. All sums deposited in excess of ten thousand dollars ($10.000) monthly shall be retained by the Bank and placed toward the reduction of the Government’s indebtedness to the Bank in respect of advances made and charges thereon under the agreement dated 21st February, 1917, until such indebtedness be extinguished, after which the revenue in excess of $10.000 per month shall be retained by the Bank and applied in reduction of the indebtedness under this agreement.

7. During the life of this agreement the Bank on their part agree, subject to the provisions of Clause 4 hereof, to maintain a banking establishment at Monrovia, as at present, for the purposes set out in the depositary agreement as amended. If at any time during the life of these presents the Bank shall dispose of the whole or any portion of their business in Liberia, the Bank shall have the right to transfer this agreement to any bank, firm, or company that may thus become their assigns.

8. In the event of the Bank having in its possession at the expiration of the period provided by Clause 2(b) hereof for the termination of the depositary agreement any Liberian silver or copper coin received by the Bank under Clause 4 of the depositary agreement, the life of the depositary agreement shall be extended until the Government shall have taken back the whole of such silver or copper coin if so requested by the Bank, as provided for in Clause 4 of the depositary agreement.

9. This agreement shall run concurrently and expire with the depositary agreement as set forth in Clause 2 Sub-clause (b) and Clause 8 hereof.

10. The General Receiver of Customs shall in his official capacity as Financial Adviser to the Liberian Government sign this agreement as evidence that same has received his consideration and meets with his approval.

1. Foreign Relations, 1917, p. 889.