882.6176 F 51/13

Memorandum by the Assistant Chief of the Division of Western European Affairs (Richardson)

Mr. Hines, who called as a result of a personal note to Mr. Firestone, stated that it was the intention of Mr. Firestone to proceed immediately with the concession for a million acres of land for a rubber plantation in Liberia. For the past several months the Firestone attorneys have been working over the concession and expect to have it in final form in a few days. They intend to submit it to the Department for any comment or advice that the Department may care to give in regard to its terms. Mr. Hines then intends to take the document to Liberia, conclude a final agreement with the Liberian Government and attempt to procure ratification from the Liberian Congress immediately. I asked Mr. Hines whether the Firestone concession was contingent upon an American loan to the Government of Liberia. Mr. Hines replied that, while it had been the original hope of Mr. Firestone to make sure of American financial support for the semi-bankrupt Liberian Government prior to investing heavily in Liberia, he had now decided to go ahead with his concession and take up the loan question subsequently.

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Mr. Hines, who is the representative who carried on the original negotiations with the President and Secretary of State of Liberia,8 was quite frank in saying that the political fate of Liberia was of the very greatest concern to Mr. Firestone. He pointed out that the establishment of a rubber plantation was a risk of an entirely different sort from an oil or mineral concession. Out of the latter it might be possible to get the capital invested within a few years and then divide the profits with the local government or, if the local government went to pieces and chaotic conditions ensued, no serious net loss of capital might be incurred. In the former, however, everything for the first five years was investment and the proceeds will not begin to appear until after that period of time. Consequently, Mr. Firestone would be gambling with a heavy capital investment in case he had no assurance that the Liberian Government might not go to pieces within the next few years.

Mr. Hines volunteered the information, which has been given the Department before, that Mr. Firestone would be most anxious to have American advisors and administrators appointed for carrying out the provisions of any loan that might be made to Liberia even though the loan were a private one from American bankers.

I suggested to Mr. Hines that the Department was not in a position to discuss the loan phase of the question until some plan for such a loan was put before it.

Mr. Hines stated that the concession plan which Mr. Firestone’s attorneys had drawn up has no monopolistic features of any kind and does not provide for the surrender by the Liberian Government of any sovereign rights.

During the course of the interview, Mr. Hines stated that neither Mr. Firestone nor Mr. Ford had yet taken any steps to interest members of Congress or of the Senate in reviving the original loan plan, since they felt that it was better to wait until after the election to discuss this and also in view of the fact that they intend to put the concession through before going after the loan.

My general impression of the Firestone plan of procedure is that he will request the Department to say whether the proposal, as submitted, would entitle the concession to protection as a legitimate American enterprise abroad. If the Department is benevolent on this score, the concession will be put through, but no considerable investment will be made by Mr. Firestone until he is reasonably certain that adequate financial and political safeguards will be provided [Page 384] to assure the continuation of Liberia as a political entity. Mr. Hines stated that he hoped to submit the concession to us within the next few days.

D[orsey] R[ichardson]
  1. The reference is to negotiations carried on by Mr. Hines with the Liberian Government at Monrovia in June 1924. The draft agreements resulting from these negotiations are printed, pp. 389 ff.