The Assistant Secretary of the Treasury ( Rathbone ) to the Assistant Secretary of State ( Phillips )

Dear Mr. Phillips: You will recall that the Treasury last summer, prior to the armistice, established in favor of the Government of Liberia a credit of $5,000,000. From this credit advances have been made to Liberia to the aggregate amount of $18,000. The Act authorizing the Secretary of the Treasury to establish credits in favor of foreign governments requires that these credits be established [Page 483] for the national security and defense, and to aid in the prosecution of the war. You will appreciate that the situation today is very different from that which existed at the time the credit was established for war purposes, and if the question were today presented to the Treasury, de novo it would not feel that it was authorized to establish such credit, nor would it feel itself able to make advances therefrom. Accordingly, it would seem necessary to limit advances to Liberia from the credit heretofore established in favor of the Government of that country to the amounts and for the purposes as to which the Government has already obligated itself.

I do not find from the record, nor is it my recollection, that any specific promises for advances were made to the Liberian Government directly by the Treasury. On October 17 and 25, 1918, this Department wrote the Department of State,25 stating its attitude regarding advances to the Liberian Government from the credit before mentioned. If, on the faith of these letters, the State Department, on behalf of the Government of the United States, has entered into obligations to make to Liberia the advances set forth in those letters, the Treasury feels that such obligations so entered into must be carried out, and that it is authorized to make the advances as to which such obligations were incurred. Other or additional advances from this credit the Treasury does not feel in a position to make in view of the present situation respecting the war. I will be obliged if you will be good enough to advise this Department whether the Department of State has entered into, on behalf of the Government, any obligations to make to the Government of Liberia the advances mentioned in the letters of this Department of October 17 and 25, above referred to.

The Treasury feels that any amount of the credit established in favor of Liberia not required for the purpose of advances, in respect of which obligations have already been entered into by the United States, should be withdrawn.

I am [etc.]

Albert Rathbone
  1. Letter of Oct. 17 printed in Foreign Relations, 1918, p. 543; letter of Oct 25 not printed.