882.51/1864: Telegram

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

9. From Castle: Firestone and the bankers have been informed of your 11, February 13, midnight and 12 February 16, noon.

As was stated in the Department’s 6, February 5, Firestone considers that the signing of the Planting Agreements by Barclay constituted the final step in their execution and that they must therefore stand as signed, although he has indicated his willingness to adjust such difficulties as may arise thereunder in the future in a friendly manner. Although he has made no comment to the Department upon your last advices he has recently indicated that he is prepared to withdraw from Liberia except for Mount Barclay plantation on the ground that he has lost confidence in the Liberian Government. Furthermore, he has expressed to the Department his unwillingness and that of the bankers to enter upon further negotiations with the Liberian Government.

Regarding the loan agreement, the bankers take the position that the security for their loan rests upon (1) the integrity of the planting agreements, (2) the assigning of all the revenues for the service of the loan and (3) the granting of broad powers to the Financial Adviser. While they might possibly consent to minor changes not affecting these main principles, they are prepared to stand on the loan agreement substantially as printed and to decline to make the loan on other terms. Personally I am inclined to doubt whether the Liberian Government will be able to secure more favorable terms than those now offered.

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While surprised and disappointed by the turn that affairs have taken I regret that I am not in a position to make suggestions in the matter as the questions which you have raised are primarily of a business character, in the negotiation of which you will realize that the Department cannot intervene and which appear to call for direct agreement between the interested parties.