882.01 Foreign Control/268: Telegram
The Acting Secretary of State to the Consul at Geneva (Gilbert)
96. For Reber. Your telegrams 201 and 203.54 We have given careful thought to the suggestion advanced by the League for us to ascertain from the Finance Corporation its attitude in the event that Liberia should approach it about repaying a possible League advance to subsidize sending an investigator to the Kru Coast. We have come to the conclusion that we will not ask for an expression of opinion from the Finance Corporation. Instead, we authorize you to make a statement in reply along the following lines:
The American Government feels that should the League desire to make an advance to Liberia for the specific purpose of sending a representative to the Kru Coast, the question of repayment might better be left in abeyance until such time as it would be possible to consider it in connection with general financial matters.
For your own confidential information: It appears from informal discussion with Howe that in the event we requested such an expression of opinion, the Finance Corporation would probably feel constrained to reply to the effect that
“Liberia is entirely at liberty to assume the obligation of reimbursing the League if and when funds are available, without in any way infringing the terms of the Loan Agreement of 1926. There is no provision in the loan agreement which would prevent Liberia from including in its regular budget such an item to be paid out of unassigned revenues at any time after Liberia had paid defaulted obligations under the Loan Agreement, and if revenues originally assigned under Loan Agreement are sufficient to take care of current service of the loan.”
In our opinion, since the assigned revenues at present are manifestly insufficient to cover the loan charges, this sort of reply would merely beg the question and might inject into discussion the question of priority of the loan. We would much prefer to have this matter kept off the books until Liberia accepts or rejects the League administrative proposal. In any case it appears probable from Barclay’s communication reported to you in our telegram No. 9555 that Liberia will refuse the League’s suggestion, for the despatch of a “special representative.”