882.51/1874

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

No. 334
Diplomatic

Sir: I have the honor, in confirmation of Legation’s cables numbers 8 and 10 dated February 6th [7th] and 9th respectively,17 to report the following:

Since receiving Department’s cable number 5 of February 3rd, I have had three conferences with the President and one with the [Page 520] President and Secretary of State, Edwin Barclay, upon the loan agreement and modifications.

The greatest forces to combat throughout all the negotiations have been the propaganda of the British, who have taken advantage of British West African publications and strengthened articles and abstracts from American newspapers and Mr. Firestone’s own words. In face of the apprehension on the part of the Liberian Government and the people here, Mr. Firestone has continually made reference to what the members of the Legislature have termed an effort to establish a super-government in Liberia. Though the Liberian Government received a cable from Mr. Firestone denying that 30,000 white men were coming to Liberia in connection with the rubber project, the Firestone papers have continuously stated, even up to the present time, that 30,000 white men would be needed here.

It has been necessary to assure and reassure the Liberian Government of the truly helpful attitude and friendly policy of the United States … for the thing utmost [uppermost?] in the Liberian mind is the so-called “Haiti Affair”.

The object of my first conference on Friday, February, 5th was to obtain direct from the President personally whether the changes in the loan agreement represented the final position of the Liberian Government and to inform him of the reaction in America to the modifications. At first some difficulty was met for … the President was not sure of his own position, especially how he could confront the apprehensive Cabinet and Legislature.

Later, however, since no information was transmitted by the Liberian Government to the Finance Corporation of America, President King appeared not satisfied that the Corporation could reach any reasonable conclusion until receiving the complete text of modifications. He felt and still feels that without an authorized representative of the Corporation with full power to discuss the modifications, final settlement can not be expedited or facilitated.

I showed him how utterly impossible it was for American interests to continue indefinitely negotiations without any assurance of later acceptance by the Liberian Government, during which negotiations the Liberians were receiving everything and willing to concede little or nothing. Further that the part played by the Department of State was no small one which Mr. Barclay well knew.

I further informed him that it should be appreciated the Finance Corporation should be able to rely upon the work done by the Liberian Government’s representative, and though ratification of the loan was necessary (the President having recalled Firestone’s proposal as outlined in Legation’s cable No. 20 of June 10 [11], 1925, and Department’s cables numbers 12 and 13 of June 11 [12, 3 p.m.,] [Page 521] and 12 [, 4 p.m.,] respectively)18 nevertheless, Secretary Barclay was empowered by the Executive and whatever he did was the Executive’s act and should be supported. It will be of interest to the Department to know that whereupon President King recalled that surely if President Wilson could not compel the United States Senate to ratify the Peace Treaty, how could it be expected that he was able to force the entire Liberian Legislature to pass this loan. President King suggested a conference for the following morning. The result of the conference of Saturday morning, February 6th is shown more or less by Legation’s cable number 8 of February 6th [7th].

President King still insisted and advised that final conclusions or opinions be withheld but realizing my view-point of the American interest stated he was willing to adjust money matters as explained in my cable but was determined not to assign all revenues and contract for a top-heavy loan.

Saturday afternoon, evidently in order to show accord and agreement, the President requested that I have a conference with Secretary Barclay and himself. The President, though I was not inclined to go into details, proceeded to take the modifications one by one in order to explain the Liberian Government’s position. My position was that to discuss details would detract from the force of Department’s cable number 5 and further I preferred to permit the Liberian Government to assume the responsibility of saying what was radical. … I succeeded in obtaining from the President the word “direction” as in article 7 and an intimation that the salaries of the fiscal officers could be raised. The President, however, refused to substitute a schedule of priorities in the loan in lieu of the modifications in article 7 as in Legation’s cable number 5. His position has been consistent on the revenue question from the first of January up to the present time (see Legation’s cable No. 3 of January 23, 9 A.M.).19

Neither President King nor Secretary Barclay could see the absolute necessity of an assistant Auditor in order to have continuity under the loan agreement. Since this conference, however, I am informed Mr. de la Rue, through his efforts, has been informed by the President that there is no objection to an assistant Auditor (I wish the Department to know of the friendly relationship and cooperation between this Legation and the present General Receivership throughout the entire negotiations).

It is regretted that article XII referring to military officers will not be modified further because the Liberian Government resents the [Page 522] sending of United States non-commissioned officers, regardless of their efficiency, to reorganize the combat forces of this country.

Article X (3), (4) and (5) has been modified in order that all outstanding debts may be paid off at once. When the 1912 loan was floated the claims of the Liberians against the Government were not met and not only was priority given to foreign claims, but the Liberians, whether they were holders of bonds or other just debts, were forced to compromise at considerable losses in order to receive any satisfaction.

The foregoing are the most important points discussed by the President at this last conference.

From all interviews I have concluded that the reason for any changes, not only is due in order to safeguard the interest and allay the fear and apprehension on the part of the Liberian Government, but also because Liberians express themselves in an entirely different way from Americans. This is true though they mean to attain the same end.

Further, it should be remembered that the task here of the Liberian officials is no easy one. They must appease the people on so many points, which though trivial to American interests, are vital to the masses, more so, to the administration. For example, section 1 (a) of the Agreement, the term “Corporation” has been substituted for the word “Buyer” in order that there be no fear on the part of the people that the Government was being sold to American interests. While such points are amusing to Americans they are of vital importance to the Liberian Government.

Another example, though not connected with the loan, is the name “Firestone Plantations Company”. Much apprehension has been caused by the word “Plantations” among the Liberians. There are only farms here, no plantations. This will likewise seem trivial but when you consider that most places other than Monrovia, are small towns, peopled by descendants of freed American slaves just from plantations, few or no newspapers, little information from the outside world, inadequate schools, etc., we can appreciate that a plantation is something to be abhorred, particularly one brought by white Americans into a country proud of its conception, founded to do away with plantations, and lauding its history of freedom and independence.

It is difficult to explain such facts to the financial interests of America or business men, but these characteristics play a major part in the present negotiations and make the task here an onerous one. To force an issue under ordinary circumstances is difficult and to unduly force an issue now means failure.

[Page 523]

This is the crisis and that is the reason for my cable of February 9, 5 P.M. (Legation’s 10).20 The President has had great difficulties in view of all the foregoing facts and has ordered Secretary Barclay and the General Receiver to draft certain modifications supplementing those of January 28, 1926. The difficulty is in obtaining the approval of the Legislature, satisfying the Liberian people, and meeting the wishes of the Finance Corporation of America whose views, other than a general one expressed in the original loan and Department’s cable number 5, are unknown.

The Legislature will not adjourn until next week and the Executive shall try to have the loan ratified substantially in its original form except:

1.
See modification No. 1 in Legation’s cable No. 5 of January 31. (The President would support other wording so long as the same principle is embodied in this article).
2.
Modification No. 6 in cable No. 5 of January 31 to remain the same.
3.
No assistant Financial Adviser and salaries of officers excluding the Financial Adviser to be $32,000. Additional assistant Auditor to be a Liberian, who shall not interfere in any way with the present organization of the loan.
4.
Modification No. 5 of cable No. 5 to remain the same.
5.
In order that the power of the Financial Adviser may not be entirely arbitrary under the loan, certain justifiable reasons for his failure to agree with the Secretary of Treasury will be specifically enumerated.

The resubmission of the loan will, without doubt, take place within the next 48 hours.

I have [etc.]

Clifton R. Wharton
  1. Latter not printed.
  2. Foreign Relations, 1925, vol. ii, pp. 442 and 443.
  3. Not printed.
  4. Not printed.