File No. 882.51/858
The Chargé in Liberia (
Bundy) to
the Secretary of State
[Extracts]
No. 252
Monrovia,
September 24, 1918.
Sir: I have the honor to make the
following report with reference to the steps taken by the Legation
to carry out the instructions of the Department’s cable of September
12, 4 p.m., concerning the
[Page 538]
decision of the United States Government to establish a credit of
$5,000,000 in favor of Liberia. …
There was great rejoicing among Government officials and the public
generally when the announcement was made that the United States had
decided to come to the financial relief of the Republic. On all
sides there were expressions of satisfaction and gratification over
the successful outcome of the appeal of the Republic to the United
States for aid. …
Enclosure No. 2 is a copy of the reply of President Howard
appropriately acknowledging the Legation’s note informing him that
the credit of $5,000,000 had been established. Without the slightest
doubt the President is profoundly grateful to the Government of the
United States for the timely assistance it has decided to extend to
Liberia. In conversation with me he has expressed himself as feeling
that this action of the United States makes the future of the
Republic secure. And he evidently takes very keen pleasure in the
fact that during his administration the United States has consented
to take action which practically gives Liberia a new lease of
life.
To the reply of the Secretary of State, enclosure No. 3, which is
also very appreciative, are attached certified copies of the
following documents which the Department indicated its desire to
receive before any portion of the loan could be available:
(a) Certified copy of Sections 10 and
16 of Article 1, of the Constitution of Liberia, together
with a certified copy of an opinion of the Attorney General
of Liberia, as to the constitutionality of legislation by
the Legislature of Liberia authorizing the Republic to
borrow money.1
These copies are intended to furnish the Department with the
documents called for in paragraph (a) of its
cable of September 12, 1918, which reads:
Copy of portion of Constitution providing for legislation
authorizing the Liberian Government to borrow money.
(b) Certified copy of a joint
resolution approving of the actions of the President in
severing official relations with the Government of the
German Empire and declaring the existence of a state of war
between the Republic of Liberia and the Government of the
German Empire.1
The 4th section of this act reads:
That the President of the Republic be and he is hereby
authorized and fully empowered to take all and every
precaution to ensure, and to make every and any necessary
provision to maintain the security of the State and its
essential interest which the present international condition
in his discretion justifies.
This copy is furnished1 as the document required by paragraph (b) in Department’s cable of September 12,
1918, which reads:
Copy of law authorizing loan enacted in accordance with said
provision of the Constitution.
[Page 539]
The Secretary of State maintains that the Executive Government of
Liberia has ample authority under Section 4, quoted above, of the
resolution mentioned, to approach the Government of the United
States for financial assistance in the shape of a loan of
$5,000,000. The Legation has considerable doubt as to the
advisability of the Executive Government making use of the power
conferred on the President by Section 4 to raise a loan. It would
seem that a specific law authorizing the loan would be much better.
But this question is passed on to the Department for its
consideration and determination.
(c) Copy of a memorandum of a Cabinet
meeting, on January 10, 1918, and resolutions passed thereat
advising the President to approach the Government of the United
States for a loan of $5,000,000.
This document is submitted in response to the requirement of
paragraph (c) of Department’s cable of
September 12, which calls for
Copy of proceedings on the part of the Executive branch of
the Liberian Government in accordance with said law.
(d) Copy of commission given Consul
General Lyon as special agent of Liberia.1
This copy is intended to furnish the document required by paragraph
(d) of Department’s cable of September
12, which reads:
Copy of full powers given Liberian representative in United
States authorizing him to sign such obligations as may be
necessary and to receive the advances or take such other
steps as the Liberian law may require.
The Legation is advised that the President will call a special
session of the Legislature to enact whatever additional legislation
may be considered necessary to deal properly with the application of
tha loan.
Should the Department think any of the documents herewith transmitted
are inadequate or defective, the President has assured me that any
alterations required will be promptly made.
I have [etc.]
[Enclosure 1]
The American Chargé (
Bundy) to President Howard of
Liberia
Monrovia,
September 17,
1918.
Sir: I have the honor, as well as the
very great pleasure, to inform you that the Legation has just
received a cable from the Secretary of State, at Washington, in
which it is stated that the Treasury has established a credit of
$5,000,000 in favor of Liberia. Before any part of this money is
available, however, it is necessary that the Department of State
should receive in proper form the following:
- (a)
- Copy of portion of Liberian Constitution providing for
legislation authorizing the Liberian Government to
borrow money;
- (b)
- Copy of law authorizing loan enacted in accordance
with said provision of the Constitution;
- (c)
- Copy of proceedings on the part of the Executive
branch of the Liberian Government in accordance with
said law;
- (d)
- Copy of full powers given the Liberian representative
in the United States authorizing him to sign such
obligations as may be necessary and to receive the
advances or take such other steps as the Liberian law
may require.
In conveying this more than pleasing information I wish also to
express to Your Excellency, as well as to the Liberian
Government and people, my heartiest congratulations on the
signal success which has been achieved by obtaining the consent
of the Government of the United States to arrange the financial
aid requested by the Republic.
I have [etc.]
[Enclosure 2]
President Howard of Liberia to the American
Chargé (
Bundy)
Monrovia,
September 19,
1918.
Sir: I am in receipt of your
communication of the 17th instant informing this Government that
the Government of the United States had established, through its
Treasury, a credit of $5,000,000 in favor of Liberia. In reply,
I take the opportunity to request you to be good enough to
convey to the Government of the United States my most grateful
sentiments of appreciation, as well as those of the Government
and people of Liberia, for its prompt and generous response to
the earnest appeal of the Republic for the financial aid so
urgently needed.
This benevolent action on the part of the United States, taken at
a moment when the Republic is confronted with very grave
problems arising from its financial embarrassment due to war
conditions, has profoundly impressed the Liberian people with
the cordial good will and sympathetic interest of the Government
of the United States toward the welfare and perpetuity of
Liberia.
Cordially and sincerely yours,
[Enclosure 3]
The Liberian Secretary of State
(
King) to
the American Chargé (
Bundy)
Monrovia,
September 20,
1918.
Mr. Chargé d’Affaires: I have the
honor to acknowledge the receipt of your note dated September
17, 1918, stating that with reference to my confidential note
No. 10/D addressed to you on the 11th of January last,1 it now affords you very great pleasure
to advise me that you are in receipt of a cable from your
Government instructing you to inform the Liberian Government
that the Treasury of the United States Government has
established a credit of $5,000,000 for Liberia, but that before
any part of this money is available it is necessary for that
Department to have the following:
- (a)
- Copy of portion of Liberian Constitution providing for
legislation authorizing the Liberian Government to
borrow money;
- (b)
- Copy of law authorizing loan enacted in accordance
with said provision of the Constitution;
- (c)
- Copy of proceedings on the part of the Executive
branch of the Liberian Government in accordance with
said law;
- (d)
- Copy of full powers given the Liberian representative
in the United States authorizing him to sign such
obligations as may be necessary and to receive the
advances or take such other steps as the Liberian law
may require.
The information conveyed in your note, now under consideration, I
can assure you, Mr. Chargé d’Affaires, is most gratifying and
pleasing to the Liberian Government. Accordingly, I am directed
by His Excellency, the President of Liberia, to request you to
be good enough to convey to the Government of the United States
of America the grateful appreciation of the Government and
people of Liberia of the ready response made to their appeal for
financial aid and assistance from the Government of the United
States.
This generous act on the part of your Government can not but be
regarded as the practical expression of that benevolent and
friendly interest and concern which the Government and people of
the United States have in Liberia’s prosperity and development
and the financial stability of her Government.
[Page 541]
As to the requirements necessary to be had by the Treasury of the
United States before any part of the credit of $5,000,000 can be
available to the Liberian Government, I am further directed by
the President to make the following observations thereon with
regard to paragraph (a) and (b) of your said note.
1. There is in the Liberian Constitution no express provision
granting the Government or the Legislature authority to borrow
money or to pledge the credit of the Republic. The power to do
so, however, inheres in the idea of a state or sovereignty, and
is implied in the general objects, purposes, and aims which
government is established to secure.
In construing the Constitution of Liberia from the point of view
of financial legislation, it is necessary to understand that its
provisions with reference to the powers of the Legislature are
not in the nature of grants, but are rather limitations upon the
plenary powers which that Department of Government inherently
possesses.
This fundamental idea being understood, it will to a great extent
explain the reason why there is in the Constitution of Liberia
no express provision granting the Government or the Legislature
authority to borrow money or to pledge the credit of the
Republic.
Thus it will be seen that the right of borrowing money or
pledging the credit of the Republic by the Government or
Legislature of Liberia has always been exercised under the
implied powers of the Constitution.
The opinion of the Attorney General bearing upon this point is
herewith enclosed to more fully elucidate the position taken by
the Government.1
2. Law authorizing loan enacted in accordance with provision of
Constitution.
The National Legislature of Liberia at their call session of
1917, passed a joint resolution approving the actions of the
President of Liberia in severing official relations with the
Government of the Imperial German Empire, and declaring the
existence of a state of war between the Republic of Liberia and
that Empire.
The fourth section of said joint resolution provides,
That the President of the Republic be and he is hereby
authorized and fully empowered to take all and every
precaution to ensure, and to make every and any
necessary provision to maintain the security of the
State and its essential interests which the present
international condition in his discretion justifies.
The winding up, by the Liberian Government, after its declaration
of war against the Imperial German Empire, of all German
mercantile firms in Liberia, which at that time represented
about 90 per cent of Liberia’s trade, together with the most
disastrous effects upon Liberia’s over-sea trade and commerce,
due to Germany’s extended submarine activities, so seriously
affected the financial and economic interests of the Republic as
to put in jeopardy the security of the State.
The Executive Government of Liberia therefore deemed it expedient
to avail itself of the war powers granted to the President of
the Republic by Article 4 of the joint resolution herein above
cited, by approaching the Government of the United States of
America with an appeal for financial aid and assistance in the
shape of a loan of not less than $5,000,000.
Copy of said joint resolution is herewith enclosed,1 together with copy of
Cabinet’s resolution advising the President to negotiate with
the Government of the United States of America, a loan of not
less than $5,000,000.
A copy of the full powers given to the Liberian Representative in
the United States authorizing him to sign such obligations as
may be necessary and to receive the advances or take such other
steps as may be necessary by the laws of Liberia and the laws of
the United States to effect said loan is also herewith
enclosed.1
With renewed assurances [etc.]
[Subenclosure]
Resolution of the Cabinet of Liberia
At a meeting of the Cabinet of Liberia held at the Executive
Mansion on the 10th of January, 1918, the President of the
Republic presiding, the Honourable
[Page 542]
Secretary of the Treasury submitted a
confidential memorandum on the present financial situation of
the Republic for the consideration of the Cabinet. Thereupon the
memorandum was taken up and discussed from its various angles,
after which the following resolution in relation thereto was
adopted by the Cabinet:
Resolved that in the opinion of
the Cabinet of Liberia, the financial and political
dangers at present threatening the Republic, as
foreshadowed in the confidential memorandum submitted by
the Honourable Secretary of the Treasury are so imminent
as to warrant a strong and candid appeal by the Liberian
Government to the Government of the United States for
relief, without delay by;
- (a)
- The granting of a loan of not less than $5,000,000
to enable the Republic to cancel the refunding loan
of 1912 and establish a receivership under American
control alone; to take up our internal floating
indebtedness; to stimulate education, agriculture,
and industry, and to inaugurate such public works as
will operate for the complete financial and economic
rehabilitation of Liberia.
- (b)
- By the loan of additional American agents to
assist the Government in perfecting its desires and
plans for effective administration and control, both
in the several Departments of Government and in the
administration of our hinterland.
C. D. B. King
Secretary of State
