882.6176 F 51/167
The Liberian Secretary of State (Barclay) to the Chief of the Division of Western European Affairs (Castle)
Dear Mr. Castle: I am in receipt of your letter of March 5, 192645 for which I thank you. I think your memorandum calls for some statement of the Liberian Government’s position, although by the day this reaches you Mr. De la Rue will have very likely made a complete exposé of the facts.
I was fully empowered by the Government to conclude agreements with Mr. Firestone subject, as has always been understood between us, to the final approval of such agreements by the Liberian Legislature. Not only is this [in] consonance with the Liberian law on the subject of such contracts, but it was the continually reiterated demand of Mr. Firestone himself even when I was in America. If the Agreements originally drawn up in Monrovia and transmitted to Mr. Firestone had been accepted by him as drawn, there would have been no difficulty. If Mr. Firestone had notified the Government, in the first instance, of the necessity for additional stipulations, the Government would not have submitted the Agreements to the Legislature before discussing such proposed modifications. Immediately after Mr. Hines reached America with the documents, Mr. Firestone cabled President King accepting them. No reservation, limitation nor proviso was either expressed or implied in this Cablegram. The President very reasonably thought that a complete meeting of minds had been arrived at, and with a view to facilitating the initiation of the operations under the contracts, submitted them for Legislative approval. The Government experienced no difficulty in securing this approval, and, immediately upon the passage of the Legislative resolution, informed Mr. Firestone by cable. Now, it must be remembered, that at that date the Agreements had not been fully executed. After a long period of negotiation, during which we were led to believe Mr. Firestone’s representative on the spot was fully empowered to consummate the agreements [Page 544] upon the bases mutually settled, we were suddenly told that Mr. Hines had no power of attorney and was authorised to do nothing beyond reporting to Akron the results of his negotiations. He would not accept the responsibility of even initialing the documents-When eventually the Government were advised by cable of Mr. Firestone’s acceptance, the draft agreements were laid before the Legislature whose resolution authorised the President to enter; into “final agreements substantially on the terms, conditions and stipulations set forth in said draft Agreements.” The Executive’s powers in the premises were thus strictly limited to the stipulations contained in the draft Agreements. These powers did not extend to nor include provisions which were not contained in the drafts or which had not been suggested or discussed during the negotiations.
It was not until he had been apprised of the Legislative approval of the Agreements that Mr. Firestone informed the Government that he had amendments to make. He did not furnish us with advice as ta the nature of the “necessary amendments” he had in mind. He made the rather curious suggestion that the Legislative Session should be extended until his personal representative could arrive with the amended Agreements, (which, by the way, was an admission that he thought the changes suggested by him were such as would require Legislative approval).
Mr. Hines eventually arrived at Monrovia with the new drafts, based it is true upon the first draft, but containing in addition new stipulations and such modifications, as made them not only substantially but actually new documents.
After a careful consideration of these new documents the Liberian Government informed Mr. Hines in substance that they were unable to accept these new Agreements in their entirety because in aspects which the Liberian Government considered fundamental they differed from the Agreements arrived at in the proceeding [preceding] year. Mr. Hines had then declared the drafts were founded upon terms and conditions mutually acceptable. This declaration of Mr. Hines was emphasized by Mr. Firestone’s cablegram of December 24, 1924 by which in express terms he informed President King that the Agreements were approved.
In order not to burden this memorandum with details I attach a copy of said letter and a letter to Minister Hood which set forth the Liberian view point.46 With all this you are possibly familiar. After more discussions the Amended agreements with modification desired by the Liberian Government, but which still differed fundamentally from the first draft were signed by the Liberian Government and transmitted through your Department to Mr. Firestone for his signature.
[Page 545]I was sent over to the United States to conclude this and other matters and it was understood that the modified new drafts contained the maximum of concession by both parties to the views of each of them. Mr. Firestone insisted upon further amendments some of which I accepted subject to my Government’s approval, which of course meant Legislative approval. The most important of these amendments suggested by Mr. Firestone in New York was with reference to question of arbitration.
The Liberian Government would be recreant in discharging its obligation to the country if it relied solely upon the benevolence of a foreign Government or official for assuring the rights of the Republic. With us it is not a question of trust or lack of trust in the Secretary of State of the United States. It is a question of whether as a matter of policy the Liberian Government should bind itself to submit all disputes arising between them and the nationals of a foreign state to the final arbitrament of officials of that state. The Legislature disapproved, and suggested the formula which is the only real amendment to the planting agreement. And what does it amount to after all? Merely, to this that instead of the American Secretary of State being the final arbiter in such disputes as might rise out of these contracts, he will cooperate with the Liberian Government in arranging for such arbitration. This difference saves the national amour propre of Liberia and yet does not in any way affect the principle of arbitration. Instead of saying “Mr. Secretary you will arbitrate”; we say “Mr. Secretary you will appoint an arbitrator”.
Mr. Firestone should understand that the security of his investments lies in the Legislative approval of these contracts, not in the Executive’s entering into them. That they became a final and irrevocable obligation on the Republic of Liberia by virtue of Legislative approval. That no amendment of the contracts after approval by the Legislature can be initiated by the Liberian Government in any of its branches. This is not only constitutional doctrine in Liberia but also consistent constitutional practice here. By insisting in these matters upon a compliance with the constitutional practice, the Liberian Government have given ample proof, if proof were really needed, that they had acted throughout de bonne foi. The constant suggestion from your end that the Liberian Government has not acted in good faith we feel is unjustifiable and gratuitous aspersion.
Mr. Wharton explained the matter of the telegram and I do not think Mr. Clark has any complaint to make in respect of his reception.
With best wishes [etc.]