Papers Relating to the Foreign Relations of the United States, 1925, Volume II

882.6176 F 51/18

Draft Agreement Number 2 Between the Government of Liberia and Harvey S. Firestone Concerning the Lease of One Million Acres for the Development of Rubber Growing

undated

Memorandum of Agreement (Styled Agreement Number Two) made and entered into at the City of Monrovia Republic of Liberia this . . . . day of . . . . in the year of our Lord Nineteen Hundred and Twenty-Five by and between The Government of the Republic of Liberia represented by Edwin Barclay Secretary of State of said Republic hereinafter styled the Government, and Harvey S. Firestone a citizen of the United States of America resident at Akron in the State of Ohio of the United States aforesaid, represented by . . . . . . . . . . hereinafter styled the Lessee Witnesseth:—

Article I

That the Government hath agreed and by these presents doth agree to grant, demise and to farm-let unto the Lessee for the period of Fifty years from this date an area of land within the boundaries of the Republic of Liberia of one million acres or any lesser area that may be selected by the Lessee from time to time within said period of Fifty years; such land to be suitable for the production of rubber or other agricultural products.

But should the Lessee fail

(a) To notify the Government of his acceptance of the conditions herein contained and stipulated within six months after the execution of this Agreement by the Government of Liberia;

(b) Or within one year thereafter to commence the selection of lands hereunder;

Then in such case the obligation of the Government under this Agreement shall be discharged and ended.

Article II

The Government further agrees that the Lessee shall during the life of this Agreement have and enjoy the following additional rights and exemptions:

(a) All products of Lessee’s plantations and all machinery, tools, supplies and buildings established, constructed or placed upon the leased land or elsewhere for the operation and development of the Lessee’s land holdings and all leasehold interests, improvements and other property, franchises, rights and income shall be free of and exempt from any internal revenue or other tax, charge, excise or impost except the revenue tax provided for in Article III. Paragraph (d).

It is understood and agreed that this exemption shall not apply to Lessee’s employees, laborers or servants.

(b) All machinery, tools, food and supplies of all kinds purchased and imported by Lessee for the operation and development of the lands held by Lessee under this Agreement shall be exempt from all customs dues or other import duties. But such import duties, if any, as are now required by the “Agreement for refunding loan, 1912”, or any modification thereof, shall be paid by Lessee until such agreement shall be so modified as to reduce or abrogate such duties required on such imports by Lessee; in which event, Lessee shall be required to pay only such import duties as are demanded by such Agreement as modified.

(c) Lessee shall have the exclusive right and privilege upon the lands which shall be selected under this Agreement to construct highways, railways and waterways for the efficient operation and development of the properties. It is agreed that all trails across such lands used immemorially by the population shall be subject and open to free use by the public.

(d) Lessee shall have the right to construct and establish at his own expense lines of communication such as highways, roadways, waterways and railways outside the lands selected under this Agreement. Such routes may be so located by the Lessee as to best serve the purpose of efficient operation of his plantations and enterprises but the Lessee agrees to consult the Government in the matter of such location. All highways and roadways in this paragraph mentioned shall upon completion become public property.

(e) The Lessee shall have the right to construct and establish lines of communication for the purpose of more efficiently operating his plantations and enterprises such as telegraph lines, telephone lines and wireless stations outside of the confines of the land selected under this Agreement, subject to the provisions of Paragraph (h), Article IV of this Agreement; and to the extent necessary for such propose [purpose] may use, without the payment of rent for such land, any Government lands not already devoted to some other use. The Government in case of war or other emergency shall have the right to use such lines of communication.

(f) The Lessee shall have the right to cut and use all timber upon the lands covered by this Agreement but if he shall engage in the sale of lumber to be removed from such lands for export he shall pay the Government royalty of two (2) cents per cubic foot for the lumber so sold, in gold coin of the United States of the present standard of weight and fineness.

(g) The Lessee shall have the right to engage in any operations other than agricultural upon the lands held under this Agreement and to utilize any product or materials of or upon said lands; but any mining or other similar operations shall be subject to the laws of the Republic of Liberia unless the parties hereto shall agree upon special terms therefor.

(h) The Government warrants to the Lessee the title to all lands selected by him upon which the Government shall accept the rental or compensation as herein provided and will defend and protect such title for the benefit of the Lessee.

The Government further agrees that it will encourage, support and assist the efforts of the Lessee to secure and maintain an adequate labor supply.

Article III

The Lessee in consideration of the Agreements herein by the Government hath agreed and by these presents doth agree as follows:

(a) To notify the Government within a period of six (6) months after the execution of this Agreement by the Government of Liberia of his acceptance or rejection of the conditions and stipulations of this Agreement.

(b) Beginning one year after the acceptance by the Lessee of this Agreement he shall select from year to year lands suitable for the production of rubber and other agricultural products in such areas or quantities within the maximum limit of one million acres of land as may be convenient to him and in accordance with the economical and progressive development of his holdings; and said Lessee shall upon the selection or location of any tract or tracts of land notify the Government of such selection and the boundaries thereof. But the Lessee shall within five years of the final execution of this Agreement select and begin the payment of rent upon a total of not less than twenty thousand acres.

Upon written notice by Lessee to the Government of Liberia of Lessee’s intention to make a selection of land hereunder within a named territory Lessee shall have six (6) months thereafter to select land within such territory and upon the filing by Lessee with the Government within such six (6) months of written notice of the selection of land within such designated territory the title to such selected land shall vest in Lessee for the purposes named in this Agreement.

It is not intended hereby to deny Lessee the right to make selection of lands hereunder without such previous notification of intention to select within six (6) months; but if such last named notification is filed the same shall have the effect of preventing others from acquiring title within such territory during such six (6) months.

(c) As and when the Lessee takes possession of lands selected by him under this Agreement Lessee shall pay to the Government rental at the rate of six (6) cents per acre yearly and every year in advance in gold coin of the United States of the present standard of weight and fineness. Such payments shall be made to the Secretary of the Treasury of Liberia or to such other officer as may be by law provided.

(d) Six (6) years after the acceptance by the Lessee of this Agreement and annually thereafter, subject to the provisions of Paragraph (a) of Article IV hereof, the Lessee shall pay to the Government a revenue tax equivalent to one per centum of the value of all rubber shipped from Lessee’s plantations calculated on the price for such products prevailing in the New York market at the time of the arrival of the shipment in New York. But any expenditures by Lessee for construction and repair of public roads outside his plantations, the location of which roads has been approved by the Government, may be deducted by Lessee from the next ensuing payments due under this paragraph.

If this lease and agreement shall be extended a second fifty years as hereinafter provided in Article IV, Paragraph (j), then at the end of fifty (50) years from the date of this agreement, the revenue tax provided for in this Paragraph (d) shall be subject to revision at the request of the Government or of the Lessee; and shall likewise be subject to revision at the end of every ten (10) years thereafter during the remaining term of this lease and agreement. If the parties cannot at any such period by negotiations agree upon the amount to be fixed for such revenue tax for the ensuing ten (10) years, then the Government shall appoint one arbitrator and the Lessee shall appoint one arbitrator to fix such tax, and if such arbitrators cannot agree, then the Secretary of State of the United States shall appoint a third arbitrator and the decision of two of the three arbitrators thus chosen shall be final and binding upon both parties; but such revenue tax shall not be greater than that commonly imposed by other governments in whose territory rubber shall at the time be produced in substantial quantities.

(e) The Lessee shall come to an arrangement with the Treasury Department of the Government of Liberia in respect to the collection and payment of poll taxes payable by persons who may be in the employ of the Lessee. But the Lessee shall in no event be held to collect in any year the poll tax for a greater number of employees than the average employed during the year. And it is further agreed that the Lessee shall not be required to collect for the Government from the employees of the Lessee any other poll tax than that provided by the general law of the Republic of Liberia; and that the poll or hut tax or other similar tax levied on Lessee’s employees shall not exceed One Dollar ($1.00) gold per head or its equivalent per annum.

(f) Should the rent reserved on any piece or parcel of ground selected by the Lessee be behind or unpaid on any day of payment whereon the same ought to be paid as herein provided, or if default should be made in any of the covenants hereinbefore contained on the part of the Lessee to be paid, kept and performed, and if such default in the payment of rent or otherwise shall continue after ninety (90) days written notice of the existence of such default served by the Government upon the Lessee personally or upon the president of his corporate successor after assignment of this lease by Lessee, then it shall be lawful for the Government to cancel this lease as to that piece or parcel of ground, the rent for which is in default or in respect of which piece or parcel any other default exists as specified in such notice, and to re-enter into and upon the said demised premises and to again repossess and enjoy the same. But if the Lessee shall, within said period of ninety (90) days after written notice as aforesaid, make good the default complained of in said notice, no right of cancellation shall thereafter exist because of such default.

Article IV

It is further agreed between the parties hereto as follows:

(a) The Lessee will not import unskilled foreign labor for the carrying out of any operations or development undertaken by virtue of this or any other grant except in the event the local labor supply should prove inadequate to the Lessee’s needs. In the event that the local labor supply should prove inadequate as aforesaid Lessee undertakes to import only such foreign unskilled labor as shall be acceptable to the Government of Liberia.

(b) Should the operations of the Lessee under this Agreement cease for a period of three consecutive years then all and singular of the rights of the Lessee hereunder shall become extinguished and void and this Agreement shall become of no effect but such cancellation of this Agreement shall not affect any rights granted by the Government to the Lessee under any other Agreement.

(c) The rights by this Agreement granted to the Lessee shall not be sold, transferred or otherwise assigned by the Lessee to any person, firm, group or trust without the written consent thereto of the Liberian Government previously had; provided however that Lessee is expressly granted the right to assign this contract and grant to a corporation which shall be organized by him for the purposes of acquiring this contract and all the rights herein granted to the Lessee; and upon such assignment to such corporation such corporation shall become vested with each and all of the rights herein granted to the Lessee upon the Agreement by such corporation to assume and become bound by all of the obligations herein imposed upon the Lessee; and thereupon such assignee shall become the sole party to this contract in lieu of the Lessee as fully and to the same extent as if said corporation had been named herein as Lessee.

(d) The Government reserves the right to construct roads, highways, railroads, telegraph and telephone lines and other lines of communication through any and all plantations owned and operated by Lessee; but before so doing the Government shall pay to Lessee all damage which will be caused to Lessee’s property by the construction and operation of such roads or other lines of communication; such damage to be ascertained in accordance with the general law of the Republic of Liberia.

(e) The Lessee shall have the right to develop for his own use such natural water power and hydroelectric power as may be capable of development upon any of the tracts of land selected by the Lessee under this Agreement and Lessee shall have the right to construct and maintain power lines over any Government lands in order to convey power so developed from one tract of land selected by Lessee to any other tract.

(f) Tribal reserves or lands set aside for the communal use of any tribe within the Republic of Liberia are excluded from the operation of this Agreement. Should any question arise as to the limits and extent of such reserves such questions shall be finally determined by the Secretary of Interior on a reference by the Lessee.

(g) Lines of communication such as telegraph, telephone lines, railroads and canals constructed and established by Lessee outside the confines of the Lessee’s tracts selected hereunder shall during the life of this Agreement be exempted from all taxation so long as they be used only for the purposes of the operations of Lessee upon lands held under this Agreement. In the event that such lines of communication shall be used by Lessee for general commercial purposes to serve others for hire then while so used they shall be subject to taxation under the general laws of Liberia.

(h) It is further agreed that at the expiration of the term of this lease hereinabove provided or of any extension thereof or upon the cancellation of this Agreement at any earlier time such buildings and improvements erected by the Lessee upon the land selected hereunder as shall not have been removed before the expiration or cancellation of the lease shall become the property of the Government of Liberia without charge or condition.

(i) It is further agreed that if hereafter the Government shall grant to any other person, firm or corporation any rights in connection with the production of rubber in Liberia upon more favorable terms in any respect than those granted in this Agreement such more favorable terms shall inure to the benefit of the Lessee herein the same as if such more favorable terms were incorporated herein.

(j) It is further agreed that the Lessee shall have the option, to be exercised at any time after the first ten (10) years of the term of this Agreement and before the expiration of the said fifty (50) years, to extend the term of this Agreement for an additional fifty (50) years, such option to be exercised by notice in writing by Lessee filed with the Secretary of State or chief executive officer of the Government of Liberia; and upon the filing of such notice this agreement and all the terms thereof shall be extended for such additional term of fifty (50) years.

(k) It is further agreed that the Lessee shall use his best efforts to secure either from the Government of the United States or from some other person or persons a loan of not less than two million dollars or more than five million dollars upon all the terms and conditions of the loan of five million dollars which was contemplated in the proposed agreement between the Government of Liberia and the Government of the United States and was approved by the Government of Liberia on or about . . . . day of . . . . Nineteen Hundred and . . . . . . . . . . Such loan whether made by the Government of the United States or by others to be under the terms and conditions last mentioned and the Government of Liberia agrees to accept such loan on such terms if it can be secured within five years from this date.

(l) During the term of this Agreement the Lessee shall at all times have free access to the port and harbor facilities at Monrovia for all business purposes of the Lessee. And during the full term of this Agreement the Government shall furnish without charge to Lessee upon Government lands, adjacent to the harbor, a convenient and permanent site for the location of a warehouse, which shall be for the exclusive use of the Lessee.

In Witness Whereof the parties hereto have hereunto set their hands and seals the day and year first above written.

For the Government of Liberia
. . . . . . . . . .
Secretary of State
For

Harvey S. Firestone

. . . . . . . . . .