Office of the Historian

File No. 882.51/820

The Assistant Secretary of the Treasury ( Leffingwell) to the Secretary of State

Washington, August 27, 1918.

Sir: Referring to our previous correspondence in relation to a loan to the Republic of Liberia, the President has approved the establishment of a credit in favor of the Liberian Government in the amount of $5,000,000.

I have not before me sufficient data in order to determine what advances should be made to the Liberian Government, and will be obliged if you will furnish me with such information on this subject [Page 536] as you have available and will also arrange to put the representative of the Liberian Government in touch with this Department so that the amount of such advances can be determined. The Treasury would also like to have your judgment as to the political expediency of immediately establishing a credit of $5,000,000 in favor of Liberia without waiting to determine the amount of advances from that credit which the Treasury would be prepared to approve at the present time. From the rather incomplete data before me on the subject, I am inclined to the opinion that it will not be necessary at the outset to advance to Liberia more than a comparatively small fraction of the amount authorized.

So as to avoid any delay in making advances to the Republic of Liberia, when the amount is determined upon, I suggest that the Department of State make such inquiries as will enable it to advise the Secretary of the Treasury that in its opinion the necessary formalities have been complied with so that the obligations of the Liberian Government, when executed in its name and on its behalf by such person as you shall name, will be regarded by the Department of State as valid and binding internationally and will have its sanction.

Respectfully yours,

R. C. Leffingwell

The Secretary of State to the Secretary of the Treasury ( McAdoo)

Washington, September 9, 1918.

Sir: I have the honor to acknowledge the receipt of your letter of August 27, 1918, in relation to the proposed loan to the Republic of Liberia and informing me that the President has approved the establishment of a credit in favor of the Liberian Government in the amount of $5,000,000.

This Department understands that the mere establishment of a credit of $5,000,000 does not bind the Treasury Department to make any advances until a satisfactory form of obligation has been agreed upon, nor does it fix the amount of advances from that credit which the Treasury Department is prepared to approve. With this understanding, this Department considers it desirable as a matter of policy immediately to announce that a credit of $5,000,000 in favor of Liberia has been established.

In the meantime the necessary inquiries are being made so that this Department may be in a position as soon as possible to advise you as to the validity of such obligations of the Liberian Government as may be desired.

A memorandum has been prepared in the State Department setting forth the financial status of the Liberian Republic at this time and containing recommendations as to an arrangement that it may be advisable to make for certain officials of the Government. This memorandum may be of interest to you, and I am enclosing a copy for your information.1

I have [etc.]

Robert Lansing
  1. Not printed.↩