Joint Resolution Passed by the Liberian Legislature January 28, 1926, Approving the Loan Agreement Concluded Between the Government of Liberia and the Finance Corporation of America, January 1, 192610
It is resolved by the Senate and House of Representatives of the Republic of Liberia in Legislature assembled:
Sec. 1. That the Agreement concluded between the Government of the Republic of Liberia and the Finance Corporation of America, as of January 1, 1926, be and the same is hereby approved subject to the following modifications to wit:
(a) In this Agreement wherever the term “Buyer” occurs it shall be substituted by the term “Corporation”.
(b) Article II shall read: The Government covenants that both principle [sic] and interest of the Bonds will be paid promptly as they respectively become due and that any and all sums and expenses in connection with the service of the issue will be paid in conformity with Article V hereof, and that payments shall be made in the Borough of Manhattan, City and State of New York, United States of America, at the Head office of the Fiscal Agents in Gold coin of the United States of America of or equal to the present standard of weight and fineness and shall be paid without deduction for or on account of any taxes, assessments or other governmental charges or duties now or hereafter levied or to be levied by or within the Government or by any taxing authority thereof.
(c) Article VII shall read: The Government agrees that it will forthwith undertake negotiations with the present holders of the external and internal debt of the Republic for the adjustment or [of] such debt and for the settlement of such claims as may be approved by the Financial Adviser hereinafter referred to, and that the Bonds herein provided to be issued by the Government and hereinafter termed “The Loan” shall be charged: [Page 508]
- On all Customs duties of the Republic receivable on and after the 30th day of January 1926 whether in respect of imports or exports, and upon all revenues receivable on and after said date, from headmoneys; but
- In the event the above revenues should prove insufficient for the service of the loan, the Government undertakes to allocate from its other revenues such a sum as shall be sufficient to make up the deficiency.
Import and Export duties of every kind and character whatsoever, headmoneys, and all other taxes, imposts and revenues of the Republic shall be collected through the Customs, Postal and Internal revenue administration, to be maintained by the Government under the supervision of the Financial Adviser and certain Assistants appointed as hereinafter stipulated who shall cooperate with the Treasury, Postal and Interior Department Officials in the manner hereinafter prescribed. The Government obligates itself to appoint from time to time during the entire life of the loan the Fiscal Officers required by the terms of this Agreement, who, during the life of this Agreement, shall supervise the collection of the revenues of the Republic from whatever source they may arise, and the application thereof to the service of the loan in accordance with the provisions of article VII (a) and (b) as modified by this Act, or as may be provided from time to time by rules or regulations to be made effective for the purpose of carrying out the provisions and terms hereof.
(d) Article IX shall read: The organization of the Customs and internal revenue administration of the Republic shall be supervised by the following officers, who shall be nominated by the Financial Adviser to the President of the Republic of Liberia, (the Financial Adviser having first reported the names of the officers nominated to the Secretary of State of the United States), and shall be by the President of the Republic of Liberia appointed and commissioned to the respective offices with duties as defined in this instrument. These officers shall hold their appointment during good behavior but shall be subject to removal by the President of Liberia for cause, or upon the withdrawal by the Financial Adviser for sufficient cause stated of his recommendation of such officer or officers. The Auditor shall hold his appointment during good behavior but may be removed by the President of Liberia for cause, or upon the withdrawal by the Fiscal Agent for sufficient cause of their recommendation of such officer.
The officers to be nominated by the Financial Adviser and by the Fiscal Agents shall be qualified as to education and as to previous experience in similar or analogous positions in foreign service; and the President of the Republic of Liberia before commissioning them for service hereunder, shall have the right to require satisfactory proof of such qualifications.[Page 509]
- A Financial Adviser who shall be designated and appointed as hereinbefore stated, at a salary of $10,000 per annum;
- An official, who shall be designated Supervisor of Customs;
- An official who shall be designated Supervisor of Internal Revenue;
- A bonded Auditor.
The officers above mentioned shall perform such duties and employ such persons as may be defined by law or prescribed by the Government, and the salary of said officers with the exception of the Financial Adviser, shall be fixed from time to time by agreement between the Financial Adviser and the Government, but the total aggregate salaries of said officers, excepting only the Financial Adviser, shall not exceed the total aggregate sum of Eighteen Thousand Dollars ($18,000); provided however, that in the event of substantial changes of money values, the salary of the Financial Adviser and the above aggregate total amount for salaries of other officers may be from time to time increased or diminished by agreement between the Government and the Fiscal Agent.
Such salaries paid to the Financial Adviser and the Fiscal Officers to be appointed as above stated shall include all allowances of any kind or character whatsoever, provided however, that said officials shall in addition to such salaries be furnished medical care and attendance; shall be reimbursed for their traveling expenses incurred by them on official duty; and shall receive traveling expenses from the point of departure in the United States at time of appointment or employment, to their posts in Liberia and return to the United States on termination thereof; and not more often than once in two years, shall receive their actual traveling expenses by ordinary route to the United States and return. Such expenditure shall conform to the regulation now enforce [in force] or which may hereafter be promulgated by the Audit Bureau of the Treasury Department of Liberia.
The Financial Adviser and the Fiscal Officers employed hereunder shall be entitled to receive reasonable leaves of absence, cumulative over not more than two years, at full pay.
(e) Article X shall read: 1. The Corporation agrees to purchase from the Government and the Government agrees to sell, at the rate of $900.00 per Bond of $1000.00 together with interest accrued thereon from time to time, pursuant to the terms and provisions hereof, and in the manner hereinafter stated such an amount of said bonds as will provide funds to be used by the Government for the purpose stated in the preamble hereof not to exceed, however, the total aggregate amount of two millions five hundred thousand dollars.[Page 510]
2. Said bonds shall be certified by the Fiscal Agents for the purpose of identification, and from time to time delivered to the Corporation or its nominee as against payment therefor at the rate above stated, to be credited by the Fiscal Agent to the account of the Liberian Government said Bonds shall be so certified and delivered from time to time by the Fiscal Agent at the request of the Secretary of the Treasury of the Government with the within covenant and approval of the Financial Adviser but not otherwise, and payment for said bonds shall not be called for in excess of the following schedule, to wit:—
3. During the calendar year 1926 not to exceed the total aggregate amount of ($2,000,000) two million dollars face value of said bonds;
4. During the calendar year 1927 not to exceed the aggregate face amount of $500,000. If the Government should fail to call for the full amount of said bonds provided for any one year the uncalled balance thereof shall not be cumulative except with the Corporation’s consent.
It is understood by the parties hereto that the Government may at any time it deems desirable offer for sale in such amounts as it may decide the bonds covering the remaining two and one-half million dollars authorised under this Agreement.
(f) Article XII paragraph 1 shall read: The Government agrees that the Secretary of the Treasury, Secretary of the Interior, Secretary of War, Postmaster General and other officials shall cooperate with the Financial Adviser to bring order and system into the finances of the Government and to that end the Financial Adviser shall devise for the Republic of Liberia and for any local Governmental Authority therein such methods of accounting, rules and regulations for the collection and administration of the public revenues and receipts as may be necessary to assure the collection of such revenues and the enforcement of the laws, rules and regulations pertaining thereto; and such administrative orders or regulations having been approved by the President of Liberia shall be issued at the request of the Financial Adviser by the Department’s Head for whose Department or under whose jurisdiction any such regulation, rule or order applies. The Government shall fix penalties not inconsistent with the Constitution and laws of Liberia for the violation of such administrative order, rules and regulations as may be issued as above.
Paragraph 3 shall read: For the further securities of the revenues and receipts, the Government shall maintain the Liberian Frontier Force, and shall further maintain patrol service by sea as may be necessary from time to time. The patrol service by sea shall be administered by the Treasury Department Customs Service. The [Page 511] Frontier Force shall be administered by the War Department and the strength of the Force shall be fixed by agreement between the President of Liberia and the Financial Adviser, and it shall not be increased or reduced in number without the agreement of the Financial Adviser except temporarily in case of emergency declared to be such by the Government. Two duly qualified and experienced officers shall be recommended by the President of the United States to the President of Liberia and if approved by the President of Liberia shall be appointed by him to the said Frontier Force. These officers shall be one Major and one Captain. The total aggregate salaries of said officers shall not exceed the sum of Eight Thousand Dollars ($8,000) per annum; provided however that such may be at any time increased or diminished by agreement between the Government and the Fiscal Agent. Such salaries shall include all allowances, except medical care and attendance, and travel on duty, which shall be furnished by the Government. Such officer[s] shall serve in the Frontier Force during the term of said bonds, and their duty shall be to prepare a plan of reorganization of the Force which shall be based on the idea of creating an efficient constabulary organization for the purposes aforesaid and which shall include the qualification and disciplining of all commissioned and noncommissioned officers and the training of the men in accordance with the best practice now obtaining in similar organizations.
Paragraph 4 shall read: The funds for the maintenance of the Frontier Force shall be administered by the Treasury Department under the same plan and system as other sections of the Government.
Paragraph 5 shall read: The revenues and receipts allocated to the services of the loan shall, during the term of said bonds, be payable only in gold, of the present standard of weight and fineness of gold coin of the United States of America, or its equivalent, and the rates and the amounts of such allocated revenues shall not be decreased without approval of the Fiscal Agent, but may be increased so as to meet the expenses of the service of the loan, and the expenses of the administration of the Government. The Comptroller of the Treasury, together with the Auditor, shall prepare for the Secretary of the Treasury, and the Financial Adviser, quarterly and annually, reports of the financial administration and of the collection and application of all revenues and receipts. Such reports shall contain the detail of all financial transactions of the Government.
Paragraph 6 shall read: The Government covenants to install and maintain the pre-audit system, whereby all accounts of the Government before payment shall be duly presented to the Auditor and shall be audited. The Auditor, upon the submission of any account for his check and after examination of the appropriation to which it is chargeable to ascertain that the same has not been over expended [Page 512] and that the account is correct, properly verified and payable, shall indicate his approval by appropriate signature and shall approve the transfer from the general deposit account in the designated depositary to the disbursement account in the designated depositary of a sum sufficient to meet the Secretary of the Treasury’s check for the particular account and payee specified. No payments shall be made except under warrant of the President in accordance with the budget or appropriation law, and all payments shall be made by check on the disbursement account to be opened and maintained in the designated depositary by the General Government. Payments to troops or other payments which must be made in cash shall be by check to-a bonded paymaster, who shall make the detail of disbursements in accordance with the audit rules and regulations which are to be prepared and enforced in accordance with the provisions hereinbefore stated.
Paragraph 7 shall read: The proceedings of the Legislature of Liberia relating to financial matters shall be reported stenographically daily by the Government and typewritten copies of such proceedings shall be furnished to the President of the Republic, the Heads of Department[s] and the Financial Adviser.
Paragraph 8 shall read: The Government shall annually enact a budget which shall set up in detail the estimates of revenues and receipts for the fiscal year and shall duly appropriate and provide in the said budget for the costs and expenses of collection of the revenues and receipts, and the expenses of the various departments of the Government, including the salaries and expenses of the Financial Adviser and his Staff, as herein provided, the service of the loan, general administrative expenses, public works and improvements and all other amounts which under this Agreement or otherwise the Government is by existing laws or understandings, contracts or engagements, required or obligated to pay; and this shall be done in the following way: At least thirty days before the opening of each regular session of the Legislature of Liberia, the Secretary of the Treasury shall prepare an itemized budget for the ensuing year, which shall contain statements in detail of the probable revenues and receipts of the Government for the ensuing fiscal year from all sources, and of all proposed expenditures chargeable in any manner against such revenues and receipts. This proposed budget shall be prepared in consultation with the Financial Adviser, whose duty it shall be to assure that the amounts provided to be appropriated for expenditure shall not exceed the resources of the Government, as shown by careful examination and comparison of the revenue estimates, and who shall further examine the proposed budget to ascertain that all expenditures which are provided to be made by virtue of any of the provisions of this Agreement shall have been properly [Page 513] included in the proposed statement of expenditures. In the event of the failure of the Financial Adviser to approve the Budget as prepared by the Secretary of the Treasury of Liberia for the reason that it exceeds the estimates, then the budget of the previous year shall be operative in so far as it applies to the ordinary operating expenses of the Government and the expenditures provided to be made by virtue of any of the provisions of this Agreement for the ensuing fiscal year only. Within ten days after the enactment of the Budget, the Secretary of the Treasury of Liberia shall deliver to the Financial Adviser a copy thereof as enacted and a statement of all appropriations, regular and special which shall have been made. All accounts of the Government shall be subject to examination and verification by the Financial Adviser at all reasonable times.
(g) Article XIII paragraph [sic] shall read: The revenues and receipts shall be applied by the Government as follows:
1. To the payment as they arise of a [all?] cost and expenses of collection, application, and administration of the revenues and receipts including the salaries of the Financial Adviser and the officers appointed hereunder, and the salaries of the employees of the revenue service, both customs and internal, the cost and expenses of maintaining the Frontier Force, and any other legitimate expenses or obligations incurred under this Agreement, and all amounts incident to the service of the loan except as to payments on account of principal and interest for which provision is hereinafter made.
Paragraph 6 shall read: The sums that may remain after the payments provided in the first five clauses of this Article have been made shall be applied as follows:
Such sums shall be credited by the depositary to an account hereinafter referred to as the reserve account. Moneys in the reserve account shall be applied, in so far as possible only for the improvement of public education in Liberia and for public works except that in emergency declared to be such by the Government the same may be applied to some purpose not covered by the ordinary Budget. Monies shall be transferred for expenditures from the reserve account by agreement of the Secretary of the Treasury and the Financial Adviser. In case of a disagreement between the Secretary of the Treasury and the Financial Adviser, the question as such shall be referred to the President of Liberia and his decision thereon shall be final. Whenever and for so long a period as the revenues and receipts shall be insufficient to meet the payments required to be made by Clauses 1, 2, 3, 4, and 5 of this Article, the depositary shall cease paying out the monies from the reserve account and such funds may be applied by the Government to meet the payments provided in Clauses 1, 2, 3, 4, and 5 of this Article.[Page 514]
(h) Article XV shall read: Until the Government has repaid the whole amount of the loan and all expenses incident to the service thereof, no floating debt shall be created and no loan chargeable upon the revenues allocated to the service of the loan hereby authorised for any purpose shall be made except with the written approval of the Financial Adviser, but the Government may without such approval at such time as it deems fit negotiate a refunding loan for the retirement of the present loan.
(i) Article XVI of the Proposed Agreement shall be eliminated.
(j) Article XIX shall read: The Government covenants to designate as the depositary hereunder, such bank in the City of Monrovia, in Liberia, as shall be agreeable to the Fiscal Agent, and such designation shall be terminated by the Government upon the request of the Fiscal Agent. Any arrangement which the Government may make with the depositary shall embody the provisions of this Agreement and such depositary undertake to comply herewith. In case the depositary shall cease to act as such by reason of such termination of its designation or otherwise, a new depositary shall be designated in the same manner as above provided. Moneys paid to the depositary for the account of the Government, as provided in this Agreement, shall be held by the depositary and paid out as follows:
Moneys paid to the depositary under the provisions of Article XIII shall be deposited in one or more special deposit accounts, as may be from time to time determined necessary or desirable, and no expenditures shall be made therefrom. Transfer from these accounts of moneys to be disbursed shall be on order of transfer requested by the Secretary of the Treasury and approved by the President, and such transfer shall be made only to a disbursement account to be opened and maintained by the designated depositary, on which disbursement account checks may be drawn from expenditure as hereinafter provided.
Moneys paid to the depositary hereunder, whether remitted by the Fiscal Agent or deposited by the Treasury Department or any other officer or agency of the Government, shall be deposited in one or more deposit accounts to be opened and maintained by the depositary and shall be transferred for disbursement to one or more disbursement accounts to be likewise opened and maintained by the depositary and shall not otherwise be expended or transferred. Such transfers from deposit account to disbursement account shall be made only as provided in the foregoing paragraph.
Moneys in the disbursement account or accounts which are to be disbursed in accordance with the provisions of Article XI shall be disbursed in the following manner, viz:
- No sum shall be disbursed in amounts greater than those provided by the budget, but
- Unexpended credit to any account provided for in the budget may be transferred to any other account of the budget by agreement of the Secretary of the Treasury and the Financial Adviser who shall certify such decision to the Comptroller for appropriate notation in the appropriation ledger. In case of a disagreement between the Secretary of the Treasury and the Financial Adviser, the question shall be referred to the President and his decision thereon shall be final.
Article XX clause (a) shall read: (a) If the Fiscal Agent shall at any time be in doubt as to its rights or obligations hereunder or with respect to the rights of any holder of any bond, the Fiscal Agent may advise with legal counsel and anything done or suffered by it in good faith in accordance with the opinion of such counsel and approval of the Government shall be conclusive in its favour as against any claim or demand by the Government or any holder of any Bond.
Clause (b) shall read: The Fiscal Agent shall not be responsible to the Government or to any holder of any Bond for any mistake or error of fact or of law or for the exercise of a sound discretion or for anything which it may do or cause to be done in good faith in connection therewith; except only for its own wilful default.
Article XII [XXII] shall read: The Government shall pay to the Fiscal Agent reasonable compensation for all services rendered hereunder and a sum equivalent to one-quarter of one per cent of the face amount of all interest coupons as paid and to one-eighth of one per cent of the principal amount of all Bonds, as retired, whether paid at maturity or purchased or redeemed prior to maturity, as hereinbefore provided. Payment of such compensation shall be made to the Fiscal Agent in gold coin of the United States of America, in the City of New York, upon statements rendered semi-annually by the Fiscal Agent to the Government as hereinafter provided. The Fiscal Agent shall allow and pay to the Government on monies other than deposits for the payment of coupons or the redemption of bonds, remaining on deposit with the Fiscal Agent for thirty days, or more, interest at the rate of two per cent per annum. The Fiscal Agent may treat all such moneys as time deposits. The Fiscal Agent shall not be answerable for the default or misconduct of any agent or attorney appointed by it in pursuance hereof if such agent or attorney shall have been selected with reasonable care.
Article XXVI shall read: In case of dispute between the Government and either of the other parties to this contract, the matter shall be referred for determination to arbitrators, one of whom shall be appointed by each of the parties to dispute; and, if such arbitrators shall be unable to agree among themselves, the Secretary of State of the United States of America and the Government of Liberia shall collaborate in finding a basis for a final decision.[Page 516]
Sec. 2. The President is hereby fully authorized and empowered to take all measures necessary to give effect to the provisions of the Agreement subject to the provisions of this Act.
Any law to the contrary notwithstanding.
- Copy transmitted to the Department by the Chargé in Liberia under covering letter of Feb. 1; received Mar. 4.↩