882.6176 F 51/194

Memorandum by the Assistant Chief of the Division of Western European Affairs (Richardson)

Messrs. Hines, Robinson and Martin, of the Firestone Company, called at the Department this morning and discussed, among other [Page 540] matters, the plans of Firestone in Liberia in view of the modifications in the Planting and Loan Agreements made by the Liberian Legislature.

While very little new information was brought out at the conference, there was discussion tending to clarify the reasons which may plausibly be supposed to have prompted the Liberian Government to take its recent action. A copy of the Liberian Act of Ratification of January, 1925,39 which authorized the President of Liberia to conclude final agreements along substantially the same lines as the original agreements signed between Mr. Hines and the Liberian Government in 1921 [1924], was examined. Mr. Robinson considered that this confirmed Firestone’s contention that Barclay had full authority to act for the Liberian Government when he was in New York and that, by his signature to the agreements, binding contracts were made. It was pointed out to Mr. Robinson that, although this interpretation might be legally valid as between two private parties, the practical effect was that President King could, under the terms of the Ratifying Act of January 1925, use his discretion and was quite within his discretion in saying that the agreements, as signed by Barclay, were not substantially the same as the previous agreements and that, therefore, he, as President of Liberia, felt that he must submit them to the Legislature.

It was also pointed out that no matter what authority Barclay might or might not have, the agreements had, in fact, been submitted to the Legislature and had been ratified with amendments; the amended agreements were now law as far as Liberia was concerned and it was doubtful whether the Executive of Liberia would feel justified in recognizing any prior agreements.

Firestone’s representatives said that Mr. Firestone considered this a matter of principle, that if he agreed to permit the Liberian Government to modify Barclay’s agreements now, he might anticipate periodic modifications at the whim of the Legislature. In regard to this it was pointed out that Liberia is a sovereign State and that at any time in the future it could modify or abrogate the contracts as it saw fit, upon the payment of pecuniary compensation to the company.

It came out in the conversation that Firestone apparently had no great objection to any of the modifications which had been made in the Planting Agreements, with the possible exception of the arbitration clause. In regard to this, Mr. Robinson said that if there were a set arbitration procedure in the statutes of Liberia which corresponded roughly to the arbitration statutes of certain American states, there would be no great danger in accepting this plan. The [Page 541] fear of the Firestone Company was that, by the grant of jurisdiction to the Liberian Courts, the latter would contrive to delay judgments in all cases to such an extent that it would be impossible for the company to operate efficiently.

It was intimated that Mr. Hines was going to Liberia with much fuller powers from Firestone than the latter’s previous representatives and that he hopes to adjust matters on a workable basis.