882.01 Foreign Control/481

The Secretary of State to the President of the Finance Corporation of America (William P. Belden)

Sir: I have your letter of January 17, 1933,18 in which, in reply to the inquiry by the Department, dated January 13, 1933,18 as to whether a representative of Finance Corporation would proceed to Geneva as soon as possible to cooperate with Mr. Reber and to participate in discussions with the Committee and League officials, you stated that you would be prepared to send such a representative to Geneva on the following conditions:

that the Liberian legislation and orders in contravention of the Loan Agreement of 1926 had previously been repealed, the Department having notified you to this effect;
that the Department would give you an assurance in advance that the American Government was agreeable to various changes which you desire in the “General Principles of the Plan of Assistance to Liberia” and also to certain modifications in the Loan Agreement of 1926 between Finance Corporation and Liberia;
that you received a general assurance that your right of appeal to the American Government for the protection of your rights and interests would not be limited or modified because of negotiations on your part in Geneva.

As to point one, I am in entire sympathy with your position. Following Mr. Firestone’s interview with me on January 17, Mr. Reber was instructed by telegraph19 to inform appropriate officials in Geneva that “the preliminary step to further participation by the Firestone interests is the repeal of the Joint Resolution of December 17 and other legislation and governmental orders which contravene the Loan Agreement of September 1, 1926.” I added that I assumed that the League Liberian Committee would support the American Government against these unilateral actions on the part of Liberia, and that I felt that the time had come when the Committee should so inform Liberia.

As to point three, the American Government maintains the position that its citizens cannot deprive themselves of their right to be heard on matters affecting their legitimate interests abroad. The fact of your having entered into negotiations at Geneva would not modify this position.

Point two requires discussion and clarification. You will recall that when the Department had satisfied itself that the “General Principles” contained an adequate delegation of authority by Liberia, this document was endorsed to you on October 5, 1932, “as a basis for the further development of the Liberian problem through direct negotiations between the Finance Corporation and Liberia”.20

You replied on October 11, 1932, that you were “willing to send a representative to Geneva to explore in negotiations the possibility of agreement on a plan mutually acceptable and that will be of practical benefit to Liberia and her people”. I transmitted this message to the League.21 The League anticipates, as I anticipate, that if and when the present situation has been settled by the withdrawal by Liberia of the present legislation and other actions in contravention of your rights under the Loan Agreement, you will promptly embark on such negotiations.

The American Government will not participate directly therein, nor be a party to any discussions looking toward modification of your private contract with Liberia. On the other hand, the American Government presumably would have no objection to such modifications or amendments to the Loan Agreement as might be mutually agreed upon between the Finance Corporation and Liberia.

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The situation is different with respect to revision of the “General Principles” (as distinct from modification of the Loan Agreement), for as you are aware the American Government is interested in the establishment of an arrangement for the administrative reorganization of Liberia under international auspices and responsibility. The American Government would observe your negotiations concerning the “General Principles of the Plan of Assistance” and would accord you all proper support. In general it may be said that I should be pleased to see any additions incorporated in the International Committee text of the “General Principles” which insure yet more effectively the discharge of the responsibilities of the Chief Adviser and his staff. While it is understood that the negotiations will be your own, I certainly shall not oppose such additions.

With respect, however, to your tentative redraft of Chapter IV,22 more specific comment is required, since this involves questions of the nationality and of the appointment of the Chief Adviser.

Concerning nationality, Mr. Firestone will recall that I discussed the attitude of this Government with him at Woodley last September. I subsequently sent a personal telegram to Viscount Cecil, President of the International Committee on Liberia, informing him that if this question were raised the American Government “would not insist upon the appointment of a Chief Adviser of any given nationality”.23 I pointed out to Viscount Cecil that once the American Government had endorsed the League plan to the Firestone interests it would require the modification of the Loan Agreement to become effective, and that the Firestones, whose assent and sacrifice were thus necessary to the consummation of the plan, strongly desired an American Chief Adviser. I added that while the American Government would not urge this course upon the International Committee, I should not be willing to urge a [Page 891] contrary decision upon the Firestone interests in a matter directly concerning their legitimate contractual rights. These views were repeated to Mr. Firestone during his call at the Department on January 17.

In his reply24 to my communication, Viscount Cecil stressed the view that in an international arrangement such as that proposed for Liberia the principal official should be a “neutral”,—i.e., the citizen of a country not specifically interested in Liberian products nor having territory contiguous to Liberia. He made clear that since the United States emphasized the international character of the assistance to be rendered Liberia, as well as the international responsibility involved in the problem itself, and since American citizens would continue to occupy the fiscal positions under a modified Loan Agreement, he did not believe that the Chief Adviser should also be an American citizen. This has apparently been the view of the majority of the members of the Liberian Committee, who likewise believe that the international aspects of the proposed “plan of assistance” would in themselves prove a source of protection to your interests.

Nevertheless, in the event that I were requested to do so by the League, I should be prepared to give my personal attention to the selection of an American for the position of Chief Adviser and to the choice of a man of such integrity that there could be no suspicion of his backing any form of political or commercial imperialism. This is in accordance with the views of the President made available to you in a memorandum to Mr. Howe on January 11, 1932, as follows:

“Inasmuch as the Liberian question is at present being handled by the League of Nations, the President would be unwilling to accept responsibility in the matter except upon request of the League of Nations.

“However, the Liberian question is essentially a matter of international concern and consequently, while should the League so request the President might name a Commissioner General to exercise supervisory functions during a period of rehabilitation, he believes that jurisdiction during this time should be exercised by the League through an international committee on which the United States would be represented, and that the American member of this committee might refer any major actions to this Government.”

In the light of the foregoing I do not see how the American Government could endorse a provision (such as contained in the first sentence of paragraph one of Chapter IV of your redraft of the “General Principles”) calling for nomination by the President subject to confirmation by the Council of the League.

Very truly yours,

Henry L. Stimson
  1. Not printed.
  2. Not printed.
  3. Ante, p. 879.
  4. For text of the Department’s letter of October 5, 1932, see Department of State, Press Releases, October 15, 1932. p. 239.
  5. See telegram No. 157, October 11, 1932, 4 p.m., to the Consul at Geneva, Foreign Relations, 1932, vol. ii, p. 773.
  6. The letter of January 17, 1933, from the President of the Finance Corporation was accompanied by a new draft of the “General Principles of the Plan of Assistance” (not here printed), which embodied the views of the Finance Corporation. Paragraph 1 of article I, chapter IV was redrafted as follows:

    “The Chief Adviser, who shall be a citizen of the United States of America, shall be nominated by the President of the United States of America, and, if approved by the Council of the League of Nations, shall be appointed by the Council of the League of Nations with the acceptance (agrément) of the President of the Republic of Liberia. The Chief Adviser shall continue in office until his tenure shall have been terminated by the President of the United States of America, or, by the operation of the approval of the President of the United States of America of a request for such termination made by the Council of the League of Nations or the President of the Republic of Liberia, for cause or causes stated. He shall be attached to the Central Government in order to give it the benefit of his advice, to coordinate and administer the work of the Foreign Experts engaged pursuant to Chapters I and II hereof, and to carry out the execution of the Scheme of Assistance.”

  7. See telegram No. 3, September 25, 1932, to the Acting Chairman of the American delegation at the General Disarmament Conference, Foreign Relations, 1932, vol. ii, p. 758.
  8. See Lord Cecil’s letter of September 27, 1932, to the American Minister in Switzerland, Foreign Relations, 1932, vol. ii, p. 764.