882.6176 F 51/30: Telegram
The Secretary of State to the Minister in Liberia (Hood)
10. Your 13, May 13, 2 p.m. You may transmit the following to the Minister of Foreign Affairs:
“The Department of State has received the message of the Liberian Government as transmitted in the telegram of May 13 from the American Legation and has carefully considered the statements made relative to the loan clause as it now stands in the Firestone contracts.
As already stated by Mr. Firestone, the reference to the 1921 loan plan was intended merely as a basis for subsequent negotiation, any objectionable or uneconomic features to be eliminated at the time of negotiation. He has reiterated to the Department that there is no intention to bind Liberia in the express terms of the 1921 plan.
The Department appreciates the reluctance of the Liberian Government to assume obligations toward private interests operating in Liberia identical with those which it might willingly assume toward the American Government. Mr. Firestone assures the Department that the company advancing the money for a loan will be separate from the corporation which will be formed to promote rubber development in Liberia. Obviously, however, it would be impossible to raise any loan in the United States on security which could be offered by Liberia unless there is to be the extensive development contemplated in the Firestone contracts. This is proved by the fact that the recent attempt to raise $25,000 on unused bonds of the Liberian Government was unsuccessful. It is also clear that American bankers would insist on some supervision of the finances and to meet this necessity the Department has already stated that it would, at the request of the Liberian Government and American interests advancing the loan, assist in the selection of a general receiver. It would appear to this Government that these provisions would thoroughly safeguard Liberian interests.
Mr. Firestone, it is understood, has already indicated his willingness to accept, if the Liberian Government prefers, a straight 99-year lease instead of the 50-year lease with the possibility of amendment by arbitration thereafter and this, together with his statements as to the loan, would appear to the Department to meet the wishes of the Liberian Government.
I can only remind you finally of the traditional policy of good will and sympathetic interest which has guided the relations of this Government toward Liberia and assure you that you may rely on a continuation of this policy in the era of prosperity which, it is believed, will follow the consummation of the Firestone contracts. Frank B. Kellogg.”
[Paraphrase.] For your own information. The Department of State understands that Mr. Firestone has been already negotiating with rubber plantations in Dutch Borneo and that among the purposes of his journey to Washington was the discussion with the commissioner of rubber openings in the Philippine Islands. It would [Page 433] appear to the Department to be very unfortunate for Liberia should Mr. Firestone transfer his interests elsewhere. [End paraphrase.]