Section IV.—Liberia (Art. 138 to 140)

Article 138.

Germany renounces all rights and privileges arising from the arrangements of 1911 and 1912 regarding Liberia, and particularly the right to nominate a German Receiver of Customs in Liberia.

Text of May 7:

Germany renounces all rights and privileges arising from the arrangements of 1911 and 1912 regarding Liberia, and particularly the right to nominate a German Receiver in Liberia.

She further renounces all claim to participate in any measures whatsoever which may be adopted for the rehabilitation of Liberia.

Note to IV, 138

The commission to “investigate the interests of the United States and its citizens in the Republic of Liberia”, which visited that country in 1909 (S. Doc. 457, 61st Cong., 2d sess., serial 5659) recommended “that the United States enable Liberia to refund its debt by assuming as a guarantee for the payment of obligations under such arrangement the control and collection of the Liberian customs”. On December 13, 1910 the President of Liberia recommended to the Congress the authorization of a loan from American, British, French, and German banking firms to be secured by a receivership of customs, held by an American official, assisted by officers designated by the British, French, and German Governments. Previous negotiations of the American who was acting as special financial representative of Liberia had brought the project to the stage described by the President of Liberia. German commercial interests were the reason assigned for including a German officer ( Foreign Relations, 1911, pp. 34447). Negotiations with the three Governments and the four banking groups continued through 1911, resulting in understandings leading to a consensus.

Liberia and the bankers made an agreement on March 7, 1912, in which M. M. Warburg & Company of Hamburg, Germany, participated, that provided for a 5 percent 40-year refunding loan of $1,700,000 (U. S. Congress, House of Representatives Committee on Ways and Means, Credit for Government of Liberia, Hearings … on H.J. Res. 270, 67th Cong., 2d sess., p. 48). Extensive correspondence in 1912 ( Foreign Relations, 1912, pp. 674701) divulged difficulties over the location of the three receivers. It was reported [Page 291] that the German receiver attached “an exaggerated political and representative significance to his position” and questioned the authority of the American general receiver. He also filed large claims against Liberia.

In the World War of 1914–18 German traders utilized their establishments in Liberia as bases of operations and the consequent British blacklist restrictions disorganized Liberian trade. When the United States entered the war Liberia desired to rid itself of the German population and to free itself of German intrigue. Article 138 was calculated to eliminate German interests from Liberia.

On September 12, 1918 the United States Government notified Liberia that it would extend to Liberia a credit of $5,000,000. Plans were made to refund the British and French tranches of the 1912 loan, to wind up the international receivership, and to create an American receivership of customs and internal revenue. Article 138 of this treaty cleared the way for the execution of the plan without Germany or German interests. The British and French receiverships were not continued. This financial plan was not, however, approved by the President of the United States until April 1920 and it was not until October 28, 1921 that the financial plan and depositary agreement ( ibid., 1921, ii, 370) were signed by the Secretary of State and the Liberian Plenary Commission. The outstanding $2,500,000 of the credit of 1918 was thereupon canceled. On January 26, 1922 they were approved by the Liberian Legislature.

Meantime Liberia was procuring advances from the Bank of British West Africa, Ltd., on security from the German Liquidation Fund. The United States Senate on November 27, 1922 recommitted the financial plan to its Finance Committee without instructions ( ibid., 1922, ii, 606, 629, 632). Liberia was therefore advised to seek funds from financial houses.

After extensive negotiations, of which the United States Government had cognizance, the Government of Liberia and the Firestone Plantations Company signed three agreements at New York on September 16 and 17, 1925 for 99-year leases of existing rubber plantations and of 1,000,000 acres for rubber cultivation and the development of a port at Monrovia ( ibid., 1925, ii, 450). A loan agreement between the Liberian Government and the Finance Corporation of America provided for a 40-year sinking fund 7 percent gold bond loan in the principal amount of $5,000,000 of which the first proceeds [Page 292] redeemed the loan of 1912. An American financial adviser appointed by the President of Liberia and a staff supervised the customs and internal revenue administration. The Liberian Legislature approved the Firestone agreements on January 30, 1926 ( ibid., 1926, ii, 516), and a further agreement of October 2, 1926 was accepted on November 10 ( ibid., p. 561). The revised loan agreement dated September 1 was approved on December 7, 1926 ( ibid., p. 574).

Article 139.

Germany recognizes that all treaties and arrangements between her and Liberia terminated as from August 4, 1917.

Text of May 7:

Germany recognizes that all treaties and arrangements between her and Liberia terminated as from August 8, 1917.

Note to IV, 139

Liberia broke off diplomatic relations with Germany on May 20, 1917 and declared war upon Germany on August 4, 1917.

Article 140.

The property, rights and interests of Germans in Liberia shall be dealt with in accordance with Part X (Economic Clauses) of the present Treaty.

Note to IV, 140

Liberian claims were settled in 1930 by offsetting accounts; see note to article 297.