882.51/1843: Telegram
The Secretary of State to the Ambassador in France (Herrick)
398. The Department of State is informed that Mr. Barclay, Secretary of State of Liberia, at present in Paris,55 is expecting direct word from this Department containing approval of the tentative [Page 486] loan terms negotiated recently by him with American banking interests.
This is caused, the Department is informed, by a misunderstanding of the practice of the Department in such matters on the part of the General Receiver of Customs of Liberia, De la Rue. Please let Barclay know that it is necessary to follow the usual procedure with regard to the flotation of foreign loans, according to the outline in the Department’s statement of March 3, 1922,56 of which a copy was included with circular instruction in May 1922, and that the representative of the bankers has been informed accordingly.
The tentative terms of the loan have already been submitted informally to the Department by the bankers.
It is the intention of the Department to advise the bankers informally of its views at an early date. It assumes that any modifications in the agreements, which the bankers may then think wise will be made a matter of direct negotiations between the bankers and the Government of Liberia.
When the final terms of the loan are submitted to the Department, it will then indicate to the bankers whether or not it finds any basis for objection, in accordance with the principles of the statement of March 3, 1922.
If and when any of the terms of the final loan agreement calling for the nomination of a financial adviser or any other action by the American Government, are to be brought into operation, the Liberian Government will then, it is understood, request officially the good offices of the American Government in the matter.
When outlining this course to Mr. Barclay, you should make it plain that the procedure accords with the well-defined policy of the Department with regard to the flotation of foreign loans in this country and that it represents no change whatever in the attitude of the American Government toward Liberia, the Firestone project, or the loan proposals.
If Barclay desires for his guidance a memorandum containing the substance of this telegram, you may supply it to him.
- In connection with the Franco-Liberian boundary dispute, see pp. 495 ff.↩
- Foreign Relations, 1922, vol. i, p. 557.↩