The Chargé in Liberia (Wharton) to the Secretary of State

No. 324

Sir: This Legation has the honor to transmit this despatch confirming this Legation’s cable number 3 of January 23, 1926,8 relative to the present Liberian Legislative Session and the submission for ratification of the Firestone Rubber Concessions and the Loan Agreement of the Finance Corporation of America.

The Department is referred to this Legation’s despatch number 318 of December 29th, 1925.9 The Rubber Agreements are absolutely sure to be ratified during the present session. There have been few modifications, merely textual, which have been agreed to by Mr. Ross, Manager of Firestone Plantations Company.

The proposed amendments of the loan referred to in the former cable as “few minor details causing the delay” have been transmitted in despatch number 318 and it is believed should give little concern. However, in the same despatch in the general statement on page 3, paragraph 2, speaking of the many points raised, there was reference to “the pledging of all revenues of the country”. At that time this Legation was not sure that this point would be stressed by the Liberian Government because this was not included in the proposed amendments which were informally obtained at that time.

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President King has been ill with grippe and slight high blood pressure. It was impossible for him to carry on his duties as executive. Further, it has been unfortunate that at the same time cabinet members and other officials have been ill. The Attorney General, The Secretary of War, the Postmaster General and the Vice-President have been confined to their homes. However, all are recovering and it was possible to visit the President Thursday last.

Among other subjects the loan was informally discussed by President King, who confidentially though emphatically stated that he will never approve of this loan under its present terms. The main objection and most forceful point is with reference to giving over both the customs and internal revenues for the two and one-half million loaned. He considers the loan for two and one-half million regardless of the credit stated for five million.

So that the Department may better understand his position it is thought best to go to some extent into details. When the addenda and former correspondence was referred to in which nothing was stated concerning not applying the internal revenue, the President readily agreed and without hesitance outlined the terms originally considered and basis agreed to and submitted by the Liberian Government, but called attention to the amount of the loan, ten million dollars, not two and one-half or even five million. It is contended that to be consistent and not only from a governmental view but from a sound business principle to accept such an agreement would be detrimental. This Legation’s position has been purely an official one and has not and can not make agreements for its nationals nor even surmise the effect of such a stand.

The probable procedure in ratifying all agreements has been informally brought to the attention of this Legation. The Firestone Rubber Concessions will be ratified by the legislature. The Loan Agreement will no doubt be passed by the legislature and that body will give authority to the President to ratify the agreement subject to certain modifications submitted.

Reverting to other modifications it is assumed that there will be no radical changes from those submitted in despatch 318. Information has been received that the section relative to opening and closing of customs houses with “consultation and the agreement of the Financial Adviser” has been stricken out entirely.

It may be of interest to know that the Liberian Government has expressed the desire to have the Financial Adviser detached from the loan and function in all matters of finance, both customs and internal revenue. It further appears that the Liberian Government sees no necessity for but one auditor and wishes to appoint a Liberian as assistant auditor.

I have [etc.]

Clifton R. Wharton