882.01 Foreign Control/532

The President of the International Committee on Liberia (Cecil) to the Secretary of State

My Dear Mr. Stimson: From the latest telegram which Mr. Reber has been good enough to show me, there seems still to be misunderstanding between the American Government and the Liberian Committee of the League.

May I venture to remind you of the history of the matter.

When, in consequence of the reports of two American travellers, charges were made that slavery and slave trading were prevalent in Liberia, the Liberian Government gave a strenuous denial in public during the meeting of the Assembly at Geneva and demanded that the charges should be investigated. That was done by the Christie Commission which, in substance found that the charges were perfectly accurate… The British Government in concert with that of the United States thereupon made strong representations to Liberia on the subject. I believe I am right in saying that the American Government was at this time cordially in favour of action through the League of Nations and even went so far as to suggest that Liberia should be put under a mandate or something of that kind. That of course could only have been done with the consent of Liberia—which was not in the least likely to be given.

Meanwhile the Liberian Government … had expressed very great anxiety to carry out effective reforms, but pointed out that they could not do that without financial assistance. The League explained that it [Page 901] was not in a position to give any financial assistance, but that it was prepared to draw up the necessary scheme of reforms and help to put it in operation. Accordingly the matter was referred to a Committee of the Council of the League to which the United States of America sent a representative which recommended the sending out of a commission, presided over by Mr. Brunot, to draw up a definite scheme of reforms. There was some little opposition on the part of certain South American countries to this action, as being inconsistent with the sovereignty and independence of Liberia; but this difficulty was got over by explaining that the Commission would have no power to enforce anything, but merely to make recommendations.

When the Commission came back with a complete scheme of reforms, the next thing was to induce the Liberian Government to accept them. It then became necessary to find out how money could be found to finance the reforms, and it very soon became clear that the only probable means of obtaining any financial assistance was through the Firestone interests, which had already sunk considerable capital in Liberia and had obtained a contract with Liberia which practically handed over the control of all the finances of Liberia to the Finance Corporation. The contract was examined by the financial authorities of the League, who were rather astonished at the severity of its terms, and both they and the financial member of the Brunot Commission commented on the gross waste of money that had taken place as a result of the loan advanced by the Finance Corporation as part of this contract. For that waste, no doubt the Liberian Government were primarily responsible, but since they could not make any expenditure without the consent of the Finance Corporation, I do not see how the latter can escape a measure of responsibility also. Other criticisms were also made of the Finance Corporation’s operations, and some members of the Committee were inclined to take the view that it was wrong for a trading company to have so great powers in such a State as Liberia and might lead to great abuse. However the majority of the Committee pointed out that if the reforms were to be carried out it must be done with the assistance of the Finance Corporation, and that there was every reason to believe that they were likely to take a serious and generous view of their responsibilities in the matter. The majority of the Committee were greatly helped in coming to this conclusion by intimations which were conveyed to them from the Firestone interests that they would be very ready to consider assistance to Liberia if they were satisfied with the terms of the reforms.

At the next session of the Committee the reforms were again examined, and in view of certain observations made by members of the Committee they were strengthened in some respects, and the amount of money to be spent on them was reduced.

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That was in May of last year. The Committee had hoped that they would have had the assistance of the Finance Corporation in drafting the scheme so as to be satisfactory to them from a business point of view, but the Finance Corporation declined to put in any appearance. This put the Committee in some difficulty and ultimately they decided to adopt provisionally the scheme and to send it forward with the suggested measure of assistance which their financial advisers had drawn up for the consideration both of the Liberian Government and of the Finance Corporation. They expressed very strongly the hope that the Finance Corporation and the Liberian Government would come back in August with a definite answer as to what they could or could not do with regard to the scheme.

When the Committee came back again in August the Finance Corporation sent a message saying that until the scheme was definitely settled, they could not make any proposals. The Committee were much disappointed, but they went over parts of the scheme and arrived at a definite agreement with the Liberian Government in every respect except in regard to the financial provisions which were left for direct negotiation between the Finance Corporation and the Liberian Government. The scheme was approved by the American member of the Committee, subject of course to a satisfactory arrangement being made with the Finance Corporation.

Again and again urgent messages were sent to the Finance Corporation asking them to let us know their decision as soon as possible, but for one reason or another the answer was continually put off. Whether that had anything to do with the political and economic situation in America, I do not know.

Meanwhile—and quite unknown to the Committee—the Liberian Government were making urgent appeals to the Finance Corporation to assist them in their immediate and pressing budget difficulties. The Committee had nothing whatever to do with these appeals except that when they heard of them they thought it possible that the Liberian Government had abandoned the idea of any assistance from the League and was going to attempt an entirely new policy. On enquiry they were assured that was not so. Except for the fact that at intervals the members of the Committee were told that negotiations with the Finance Corporation about the reform scheme had made no definite progress, that was all that was heard of the matter, until quite suddenly came the announcement of the difficulties caused by the action of the Liberian Government on December 17th.

It is quite true that the Committee, or some members of it, had heard from time to time about negotiations going on with a syndicate called Dan-Lib, and I remember I once met two gentlemen who seemed to be [Page 903] connected with that syndicate in one of the lobbies of the League Secretariat. I gathered from them that they were not at all keen on the concession, and certainly would not consider it unless the League scheme of reforms went through. That was the only communication I ever had with Dan-Lib: nor do I in the least know who they were or where their money, if they have any, comes from.

I received, however, a message from a friend of mine who takes an interest in native affairs, stating that the agreement with Dan-Lib was from that point of view of an undesirable character, and accordingly I thought it right to enquire from one of the Liberian representatives what their agreement with Dan-Lib really was. He showed me three draft agreements, none of which—as I understood him—had actually been concluded. None of them—if I remember rightly—provided for any direct payment by Dan-Lib, their nature being that Dan-Lib should make roads in various directions in Liberia, for which they should be entitled to charge anyone who made use of them. There were also, I believe, some extensive but rather vaguely worded mining and timber concessions.

The final draft did not seem to me seriously objectionable to native interests, and I took no further action in the matter. I did not even consider—for it was no part of my duty to do so—whether the concession was or was not consistent with the Firestone concession already existing.

I ought to add that the Brunot Commission brought back a most deplorable account of the finances of Liberia, and there can be no question that for months past there has been no adequate payment of the officials in Liberia, and that in consequence the whole administration of the country is in a deplorable condition. The revenue is certainly diminishing and has for many months past not been sufficient to pay both the Firestone charges and the cost of administration.

In these circumstances it seems to me impossible that the payments by the Liberian Government under the contract with the Finance Corporation can be made, but that does not justify the unilateral repudiation of them. Why that repudiation was suddenly made in the way it was made, I have no knowledge at all. It was certainly a foolish and reprehensible proceeding. On the other hand I am sure that in the interests not only of Liberia but of the Finance Corporation itself, it is essential that some practical measure should be adopted for lessening the payments to be made by Liberia. To all intents and purposes Liberia is insolvent.

That, as I understand it, is a short history of the matter. I have no idea whether any money can possibly be found to make the reforms in Liberia possible, except from the Finance Corporation. If I knew of any such source, I should certainly be very glad, because not only is the Corporation unlikely to desire to sink further money in Liberia but also it is contrary to sound principles of administration that a country like [Page 904] Liberia should be financially at the mercy of one trading Corporation. But I know of no such source, and the financial advisers of the League have repeatedly and publicly stated that they think it most improbable that any means of financing the reforms can be found except through the Finance Corporation.

I am therefore most anxious to see a reasonable and proper arrangement made between the Liberian Government and the Corporation which will enable the reforms to be carried out to the advantage, not only of what are called the American Liberians, but of the two million or more natives in the Hinterland, and will at the same time restore some prospect to the Finance Corporation of being able to carry on their enterprise in Liberia with commercial success.

May I repeat that unless the Liberian Government is reformed, the Finance Corporation will suffer in common with all those who have any interest in Liberia—native or foreign—and that the reforms are unlikely to be carried through except with some financial assistance on the part of the Finance Corporation.

Yours very sincerely,