The Minister in Liberia (Hood) to the Acting Secretary of State
[Received October 12.]
Sir: This Legation has the honor to herewith transmit the reply of the Liberian Government, in answer to the Department’s cablegrams No. 17, dated May 20th [23d], No. 23, dated July 13th, and No. 26, dated August 17th, regarding certain financial information requested, and the reasons for the action taken in the matter of the use of the German Liquidation Funds with the Bank of British West Africa.
With reference to the action taken by this Legation in the matter of the German Liquidation Funds, it has the honor to submit that as shown in the dispatch to the Department, No. 58, dated May 12th,18 with enclosures from the General Receiver of Customs and the Secretary of the Treasury of the Republic of Liberia, the whole embarrassing condition of the Liberian Government was set forth. As early as April 15, 1922, in the Legation’s cablegram No. 16, the President of Liberia said,
[Here follows the text of the telegram printed on page 616.]
Following this, Legation’s cablegram, No. 18a, of May 15th, to the Department, said the following:
[Here follows the text of telegram printed on page 617 as telegram no. 18, May 13.]
To this, the Department replied by asking that the Liberian Government produce certain financial information, which it was unable to do in time to get any word from the United States, that would relieve the situation.
During all of this period, the Manager of the Bank of British West Africa had been basing his action with the Liberian Government and his representations to his directors in London, upon whatever assurance could be given by this Legation of the loan becoming effective. This Legation was able, for some time, to present the facts concerning the loan in such a way as to hold the credit of the Bank for the Government; but finally, the prolonged delay and inability to state anything sufficiently assuring brought a cablegram from London withdrawing the credit of the Bank unless the American Minister would endorse the German Liquidation proposition.
The operations of the Bank of British West Africa are almost the subject of as much consideration in the British Colonial offices as if they were affairs of direct government action; all the foreign nations, here represented, regarding [regard?] the pending loan negotiations [Page 624]as the announcement of the United States’ willingness to become sponsor for Liberia. It is difficult to realize the emergency of the situation without immediate and direct contact with the condition.
The Legation had cabled the Department on April 15th concerning the situation, but had no reply until sending another cablegram, dated May 15th [13th?], during which period the crisis had only been averted by Legation’s aforesaid representations; the situation every hour grew more acute, all time had elapsed.
In this grave condition, and embarrassed and perplexed situation, this Legation acted:
- Because the crisis was as these dispatches have indicated, or else the Government of Liberia, the Manager of the Bank of British West Africa and the London directors falsified them.
- Because this Legation understood the policy of the United States toward Liberia, as far as it could legitimately be, was to save and preserve it as an independent autonomous State.
- That the circumstances confronting the Liberian Government at the time the action was taken, would compel it to cease functioning, and this failure, considering it’s relation to all foreign powers; and especially to those to whom it was indebted, must have precipitated international complications.
- Because the endorsing of the German Liquidation Collateral Plan did not involve the United States unless the Loan Agreement became effective.
- Because the matter had to be decided before any further instruction could have been received, the Bank of British West Africa having waited one month for some information from this Legation with regard to the pending Loan Agreement, as would be sufficient guarantee for further advances to the Liberian Government.
This Legation feels severely and regrets exceedingly the disapproval expressed at what at the time seemed to be the best and only course that could be taken.
I have [etc.]
- Not printed.↩
- Not printed; see memorandum of conversation between President King and the Assistant Secretary of State, Nov. 8, 1921, Foreign Relations, 1921, vol. ii, p. 390.↩
- Note of Nov. 14, 1921; not printed.↩
- See telegram no. 17, May 23, to the Minister in Liberia, p. 618.↩
- Letter and memorandum not printed.↩