882.01 Foreign Control/915

Report by Mr. Harry A. McBride, Special Assistant to the Secretary of State, Upon Conditions in Liberia


[The report opens with a brief review of events in Liberia from January to May 1934, here omitted.]

After the rejection of the League Plan, affairs were in a chaotic state, neither the Government nor its opponents knowing quite what the next step would be. Undoubtedly, a strong hand at the head of the Government was necessary and Barclay has certainly shown great strength in holding the Government together and in planning for the future of his country during this period. Notwithstanding the feeling against white supervision, President Barclay and his followers have also fully recognized the pressing need of certain reforms, somewhat along the lines recommended by the League of Nations, though not embracing all of its suggestions. They, however, claim with vehemence that the Liberian Government is entirely capable itself of instituting at least what seem to them to be the most urgent and necessary of these reforms.

On August 11 the Liberian Secretary of State Simpson and Representative Russell were sent to Geneva ostensibly to endeavor to assure the League that Liberia could and would reform itself. Apparently up until the middle of August 1934, President Barclay had, however, not yet developed any coordinated plan of action in this respect. But, on August 28th, he had set down on paper and subscribed to his “Plan of the Liberian Government” which shows what is to be attempted. His two letters in explanation of the plan together with other enclosures are appended hereto as an annex to this report.

The Plan in itself is good, and if it were faithfully carried out many of the important reforms which the League experts considered immediately necessary, would in effect, be accomplished.

It provides for the employment of various foreign specialists to aid the Government, the most important being an administrative officer of high rank (offered to a former Vice Governor of Belgian Congo who was unable to accept. Liberia is now seeking an American for this position) who would not only have charge, under the President, of hinterland administration but would also supervise and correlate the work of the other specialists. In so far as hinterland and native tribal administration is concerned, he would be assisted by a second foreign administrative officer.

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It provides for the return of fiscal control to the American fiscal officers under certain conditions that might be acceptable to the Financial Adviser providing the Liberian Government would cooperate faithfully with him in making his control effective and in following his suggestions as far as possible in budgetary matters and in reduction of government expenses. It reiterates that Liberia has no intention of repudiating its foreign loan. It contains a provision to secure an American officer to reorganize the Liberian Frontier Force. The Plan proposes the funding of the internal debt but in view of the present financial stress, postpones this action until a later date.

It provides for an intensification over three years in the development in public works, especially the construction of motor roads to open up the hinterland so that its products may be brought down to the coast in greater quantities for export, and so that administrative inspection and tax collection in the hinterland may be facilitated. This is obviously a revenue producing improvement of great importance and the first main highway to the border of the French Colonies which will be some 230 miles long, has already reached a point 61 miles inland from Monrovia. In addition, it is estimated that sections of the road now completed far in the interior total some fifty to sixty miles and that within two years the first main highway from Monrovia to the French border will be finished.

The Plan calls for continued improvement in the administrative and judicial machinery of the government, for instruction to the farming community in better methods of agriculture and for a mineralogical survey which is already under way and which has proven the existence of deposits of gold, diamonds and other minerals. A certain amount of encouragement is being given to other local enterprises such as rice cultivation, soap making, and the manufacture of distilled spirits, sugar and aerated soft drinks.

It recognizes Liberia’s responsibility in regard to health. A Bureau of Public Health and Sanitation with broad powders has been created and a hospital established. It is planned, in cooperation with the various foreign Mission establishments to spread this work gradually over the whole country. This task will be in charge of two specialists (a Pole and a Hungarian) who are already working in Monrovia.

The section on education calls for an American specialist to supervise this work and to improve the present facilities. A teachers’ training school, to be staffed by trained instructors from America, is now being organized so that the standard of teaching in the country may be raised.

The employment of an economic or trade specialist (a Pole) is provided for and he has already assumed his duties in Liberia. He will [Page 808] endeavor to improve Liberian export products through better standards of grading to find new markets for these products and to propose trade agreements with other countries in order to foster Liberian exports. Such an agreement is said to already have been reached with Poland.

The Plan definitely sets forth that the government fully realizes the economic value to the country of the large Firestone rubber plantations and that the government will give every reasonable support and encouragement to the operation of this company.

Comment upon the Plan

The essential weaknesses of the Liberian Plan are three-fold:

(I) The success and effectiveness of the Plan depend solely upon the sincerity and good faith of the Liberian Government in carrying forward this attempt at rehabilitation during the next three years, and past history and experience in this respect give rise to serious doubts upon this point. The League experts felt strongly that some definite authority and control must be given to the various foreign advisers and assistants, notwithstanding the fact that in certain instances this authority might be considered as temporary relinquishment of certain sovereign rights on the part of Liberia. This question of infringement of sovereignty was the principal reason for Liberia’s refusal of the League Plan and the Liberian Government now reiterates in its three year program that it is still unwilling to concede any authority or control in derogation of the powers and authority of the President, Legislature or Courts.

The Plan contains the definite statement, however, that “in employing these specialists, the Government is undertaking to follow literally their suggestions in every respect, except where those suggestions are constitutionally impossible to be carried out, or where they are really objectionable for any fundamental reason, in which instance an honest and fair discussion and ironing out of the points of view will be made before it will be rejected”. The rights to be exercised by the specialists will be set out in their contracts with the Liberian Government and any questions arising as to those rights will be settled by special arbitrators, one each to be appointed by the parties and the third to be agreed upon by the two thus appointed. It is further provided that the specialists are to be secured in countries not having any territorial contiguity to Liberia. The Liberian Government is at present thoroughly aroused as to the necessity for instituting in effective manner at least some of the reforms provided for in the Plan and for that reason it is to be expected that fairly ample authority will be granted by the President at least to those specialists who are working upon the reforms concerning which the Government itself is most interested.

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(II) The Plan calls for the employment of several foreign specialists but Liberia is to use its own judgment as to whom these men shall be, what past experience they shall have had, and the manner in which they shall be recruited. Much depends upon the strength of character, ability, experience, loyalty and disinterestedness of the foreign specialists as to whether the program is to be effective, and the probability of Liberia’s being able to choose men of the requisite qualifications and fitness without aid or advice of some more experienced nation or group of nations, is doubtful.

(III) The national financial structure upon which the successful development of the plan is dependent offers certain drawbacks. Liberian figures show that revenues during the first six months of 1934 amounted to $233,309, as compared with $217,077 for 1933, an increase of $16,232. As well over one-half of the annual revenue is collected in the second semester, these figures, if they are accurate, show that something over $500,000 is now being collected annually. Customs revenue shows a decline due to considerable extent to the increasing importation of Japanese merchandise. As the tariff is on an ad valorem basis the cheaper Japanese goods, especially footwear and cotton goods, cause a loss of customs revenue. On the other hand the collection of internal revenue (hut tax) has been intensified and shows an increase. There are charges of mal-practice on the part of Liberian tax collectors in collecting these taxes, and some of them are undoubtedly well-founded, yet it must be taken into consideration that native tribes in most parts of Africa have constantly resisted the payment of any form of taxation, and that, if fairly collected, the Liberian hut tax of one dollar per year is not unjust or exorbitant as compared with similar taxes in the neighboring colonies.

The budgetary requirements for 1935 as shown on pages 17 and 18 of the Annex to this report, call for an expenditure of $568,040, and there are reasons for believing that revenues may possibly equal this figure. Furthermore, it is estimated that a surplus from the present year amounting to at least $70,000 will be carried over into next year’s available funds.

It would seem that the prospect for economic improvement in Liberia is good. The Firestone Rubber Plantations are now beginning tapping operations, thus giving more or less permanent employment to some 4,000 additional native laborers earning from fifteen to twenty-five cents per day. So far as the government is concerned this will facilitate the collection of hut taxes in the central district, it will increase the government revenue derived from the one percent export duty on rubber and, as a large part of the native earnings go toward purchases of imported merchandise, it will cause [Page 810] an increase in customs revenue. If these rubber operations are fostered and aided by the government there will undoubtedly be a considerable and steady increase in revenues during the next two or three years.

The second promising factor is the motor road construction now going forward. As these roads penetrate gradually inland, trade in native products is stimulated and already the production of native rice, which ten or fifteen years ago was used almost exclusively for local consumption in the hinterland, has grown to such extent that it is now used in the civilized towns on the coast and even exported to neighboring colonies. The government loses the revenue it formerly derived from large importations of foreign rice but it gains of course in revenue from other imported merchandise purchased by the rice growers with their new source of wealth. Motor transport will facilitate the shipment of palm products from the interior and, in time, will bring down to the coast for shipment from Liberian ports quantities of kola nuts from the rich Liberian kola forests—an article for which there is a steady and lucrative demand in the French colonies to the north. These motor roads and the opening up of the hinterland should also result ultimately in better and more effective hinterland administration and a wider spread in hut tax collections in districts now rather isolated and inaccessible.

The third important prospect is that there appears to be a probability of mineral exploitation, especially in gold and diamonds, which even though developed on a small scale would add certain sums to the government revenue. This development is now in the hands of a Dutch company, to which a concession has been granted.

Thus, judging from figures supplied by the Liberian Treasury Department it would appear that the present financial situation is not entirely desperate insofar as current needs are concerned, and also that the future prospect, if the finances are properly administered, is not at all bad.

The budgetary provision for running expenses of the government is $500,000. This item includes however, sums for road construction, additional men for the frontier force and for the payment of certain administrative claims. It also includes items for the purchase of a revenue launch, radio apparatus, postal claims, and road building machinery. If a sufficient percentage of this $500,000 is carefully expended on revenue producing public works the figure would appear to be within reason. If, however, the greater part of this $500,000 is to be expended for increases in governmental personnel and salaries the financial structure will undoubtedly break down.

The essential weakness of Liberian finances at the present moment is the fact that no provision has been nor can now be made for the [Page 811] payment of its external and internal indebtedness. In view of the fact that prospects for the future are good it is thought that Liberia might gradually be able to put its financial house in order if it would be willing to give some sort of guarantee that, for the next six or eight years all sums collected by the government over and above $570,000 should be applied toward interest and amortization of its foreign loan and the consolidation of and gradual payments on its internal indebtedness.

It is essential that some readjustment should be made in the Loan Agreement with the Finance Corporation of America. Because of changed economic conditions throughout the world and because of the effects of the Liberian moratorium act, it seems necessary and expedient that negotiations between the Liberian Government and the Finance Corporation of America should take place at an early date with a view to placing Liberian finances again upon a business-like and definite feasible basis. Some sort of compromise along the lines of the offer of the Finance Corporation to the League Committee for the scaling down of loan charges, and a change in the depositary arrangement should be practicable. Inasmuch as it is probable under present conditions that Liberia would not ask for any further important advances from the loan, a certain degree of liberality and understanding with reference to the budgetary provisions (within the $570,000), which must be approved by the Financial Adviser, might be granted by the Finance Corporation. With reference to the depositary, it would seem that the contention of the Liberian Government that government funds should not be placed entirely in the hands of the loaning entity is well taken. They claim that the United States Trading Company Banking Department has been operating as a depositary under no guarantee to the government and with physical assets in Liberia of little value, whereas the present temporary depositary under the Moratorium Act (West and Company) has large assets in Liberia and has outside banking connections quite as satisfactory as those offered by the United States Trading Company.

The action of the Liberian Government in bringing into effect the Moratorium Act and thus entirely overriding the Loan Agreement is from every legalistic standpoint deplorable and inexcusable. The Liberian contention is that only the gravest national necessity with which the country had ever been faced, forced this action, and that unless this course had been pursued, the entire machinery of national government would have broken down. It is quite true that when the moratorium action was taken, the financial stress was practically unbearable.

The fact that this Moratorium Act still exists may make the initiation of any new negotiations for a revision of the Loan Agreement [Page 812] somewhat difficult. Liberia is willing to return to the Loan Agreement and is even anxious that fiscal affairs again be taken over by the American fiscal officers under that agreement. They would ask that only four provisions of the present Moratorium Act be incorporated in the new Loan Agreement: (1) reduction of fiscal officers from five to three; (2) reduction of salaries of the fiscal officers; (3) a change in the priorities of payments so that actual governmental expenses should be first; and (4) a change in the depositary arrangement.

In any new negotiations, they would, of course, also ask a reduction in interest charges on the loan.

The Government is today functioning in a fairly creditable and serious manner; the reforms called for by the Liberian plan would undoubtedly bring about considerable improvement in conditions in the country and there is every reason to believe that the worst period of the financial crisis has passed. This combination of facts would seem to warrant the Finance Corporation of America in extending its cooperation toward some revision in its Loan Agreement so that the Liberian Government may revoke the Moratorium Act and revert to the fiscal system contemplated in the Agreement. This becomes more evident when it is considered that the alternative appears to be a continuance of the present extremely unsatisfactory state of affairs in so far as the Finance Corporation is concerned.

All factions in the country are thoroughly alive to the need of certain reforms and improvements. If the Liberian plan is given a fair trial this active interest itself will assure a certain degree of success. President Barclay and his Government fully realize the great opportunity now offered to them in carrying out the provisions of the plan and will in all probability aid and assist in effective manner.

The plan is a compromise which will appeal to the various factions in Liberia. Its probable effect would be, to some extent at least, to unite the opposing factions within the country and, because of the present desire on the part of Liberia (a desire partly forced by necessity) actually to cause a considerable amount of creditable development.

Liberia should be a prosperous country. Its natural resources and native population are good—better in fact than in many West African districts. The potentialities in rubber, other agricultural products and minerals are well above average.

That the country is backward is quite true, but it has been obliged to fight its battles with few weapons, little administrative experience and, on many occasions, with a pitifully restricted pocketbook.

Neighboring regions have had the backing of strong mother countries, expert administrators, effective military forces and large sums for the opening up of the productive areas through railroads, motor [Page 813] roads, harbor facilities and with adequate police, medical and sanitary forces. This intensive exploitation is reflected in budgets several times larger than Liberia’s for areas of similar size and resources.

All recent reports on the country have stressed its backwardness as compared with these neighboring countries but have failed to compare Liberia today with Liberia twelve to fifteen years ago. When this comparison is made it becomes evident that Liberia has also developed and that the rate of development is now being somewhat accelerated. Fifteen years ago Monrovia’s population was some three thousand inhabitants. Today it has at least ten thousand.

Then there was one street suitable for motor traffic and only two motor cars. Today nearly all the streets have been leveled and cleared for motor traffic and there are dozens of cars and trucks in operation. It has electric lights, at least one or two good schools, a creditable water front, an excellent new customs house and a main trading street lined with well-stocked stores. There are now about 100 miles of motor roads out of Monrovia as compared with two or three miles in 1919. There are two good lighthouses on the coast. Even during this period of depression, revenues of the country amount to some $500,000 at the present time as compared with half that amount during some of the war years. In 1919, there was one small and practically abandoned rubber plantation in Liberia—today there are over 60,000 acres of flourishing rubber trees offering the country its greatest economic resource.

Less favorable factors are the contentions that the great increase in Monrovia’s population is to some extent caused by families moving to the capital from other towns along the coast and that those towns have deteriorated; also that the Americo-Liberian stock is fast dying out and that the new generations will be less capable of carrying on the government.

It is certainly true that the Americo-Liberian or “civilized” portion of the population is rapidly mixing with the native stock. There is also an increasing number of hinterland natives who are becoming well educated, some having degrees from American and European universities and it is largely upon these people that the responsibility for carrying on the government will rest in the future.

As to relations between the government and the hinterland tribes, there is still a great deal of controversy. The tribes claim gross malpractice in the collection of hut and other taxes and some of their complaints are undoubtedly justified. On the other hand, the government asserts that whenever malpractice or oppression on the part of tax collectors or district commissioners is discovered, these officials are immediately dismissed. President Barclay says that more care is being used than ever before in fomenting good relations with hinterland [Page 814] tribes and that headway is being made even with the Kru tribe, although considerable numbers thereof are still alienated. It has recently been more difficult because of the depression for the natives to pay their taxes and they have undoubtedly suffered hardship thereby, but with good prospects for improved conditions in the future, this hardship upon the native tribes should gradually be lessened. The opening up of the interior with motor roads should eventually benefit these tribes and decrease the friction and malpractice in administration.

No report upon conditions in Liberia should omit reference to the recent serious difficulties on the Kru Coast between the Liberian Government and the Kru tribes. No worthwhile comment, however, may be made without personal investigation and there was no time for this purpose. A complete document from President Barclay, giving the Liberian side of this controversy, was obtained, however, and appears as an annex hereto.23

Suggestion as to Policy to be Followed

In view of the personal interest of the Liberian President, higher officials and many of its citizens, in the success of the Liberian Plan, and the fact that the Plan itself provides for many of the reforms and developments contemplated in the League Plan, it would seem that if given a fair trial there is reason to believe that considerable improvement in conditions in Liberia would result. As its benefits become evident, additions thereto along the lines of the League’s suggestions could be made. If our Government decides to favor a trial of this Plan, it might make certain suggestions to Liberia with a view to strengthening still further the Plan’s provisions, which suggestions would probably be accepted if it were intimated that recognition of the present Liberian Government by the United States would follow.

It would first probably be necessary to outline the provisions of the Plan to the British, French and German Governments and to inform them that as the Plan appears to be as much as can be obtained in the way of reforms in Liberia at the present time, it is our feeling that it would be useless to make further efforts to induce the Liberian Government to acquiesce in a plan containing the full power and authority for foreign supervision provided by the League Plan and embodying all of its provisions; and we, therefore, feel that the best course is to offer no objection to Liberia’s placing the plan in operation. As every assurance has been given by President Barclay that the Plan will be faithfully carried out, it is felt that our Government, because of its traditional and historical interest in Liberia, should be willing to cooperate [Page 815] if requested to do so, and during this trial period to recognize President Barclay’s Government.

If our Government does not favor a trial of the Liberian Plan, there would appear to be only two alternatives—One, to countenance a continuation of the present state of affairs, which is most unsatisfactory, which offers little hope of definite improvement in the future and which certainly leaves Liberia’s foreign creditor (the Firestone interests) in a most unsatisfactory situation with no guarantee of any sort that payments upon the loan will ever be resumed; Two, to confront Liberia with a show of armed force either by the United States alone or by some international combination as a lever to procure the acceptance of the provisions of the League Plan in its entirety. This alternative seems to be out of the question because of the present policy of the American Government in its foreign relations.

Harry A. McBride

Washington, October 3, 1934.

[Enclosure 1]

The President of Liberia (Barclay) to Mr. Harry A. McBride, Special Assistant to the Secretary of State


No one, considering the experiences and the circumstances by which in a political sense they have been surrounded, should be surprised at the intense nationalistic spirit of the Liberians. This spirit reflects itself in the Government, but does not hinder them from realising the benefit which they might secure from foreign cooperation, nor make them indifferent to the trend of international thought and opinion. What they have fought for and what they will continue to strive for, is the retention of their national rights and character free from even the most benevolent political domination. The non-political cooperation of foreign specialists in the administrative services is desired and is being secured. This policy will be carried out and maintained until the benefits to be secured therefrom have been realized and consolidated.

The reports which have become current as to the alleged maladministration of the Liberian Government, particularly as regards the native population, are derived from sources which are not disinterested. The existence of democratic Liberia in the midst of the colonies of more or less benevolent autocracies in West Africa is not a very, pleasant thought to the colonizing powers. This fact, without further speculation, would be apparent to anyone who regards the political [Page 816] situation in West Africa objectively. These reports and rumours, however, ignore the facts in Liberia and therefore present no true picture of actualities.

Up to the present, so far as the native administration is concerned, a complete reorganization is based upon the provisions of the Administrative Regulations issued in 1931 which came into force July 1 of that year.

Prior to these Regulations, the tribes had no voice in the selection of their Chiefs; they had no responsible municipal organization and were subject to the authority of such men as the Government, without their consent or over their objections, appointed over them, upon the more or less interested recommendation of persons having the confidence of the President.

The first reform consisted in restoring to the tribes the right to select their Paramount Chiefs in accord with traditional customs; to establish tribal councils which, in association with the Paramount Chief, controlled the internal political economy of the tribe; to constitute the District Commissoner as the indirect supervisor of the administration and not as was previously the case: the direct instrument of administration. Tax collections were entrusted to the Paramount Chief who alone was responsible to the Government Revenue Agency. The Paramount Chief was made responsible for taxes based upon an assessment of the number of huts in his chiefdom. Intro-tribal roads were to be built and maintained by the tribal authority in accordance with traditional custom, whilst the main public highways were to be constructed and maintained at Government expense. In matters of justice, the clan chiefs and paramount chiefs were invested with plenary powers, except in the case of capital offenses, subject to certain provisions for appeal to the District Commissioner and the Interior Department.

The general administration, including supervision of the activities of Paramount Chiefs, matters affecting the public, health and sanitation, control of markets and supervision of such public schools as might be established, are entrusted to the District Commissioner exclusively, subject to the direction of the Provincial Commissioner who supervises the group of Districts within his province. No Provincial Commissioners have up to the present been appointed, but it is the intention of Government to employ as soon as possible two foreign specialists who will supervise the work of the District Commissioners.

The putting into effect of this Plan was undertaken by the Secretary of the Interior who made an extensive tour through the native districts for the purpose. After two years of operation, the President toured various sections of the Country with a view to observing the effect of the new regulations on the character of the administration [Page 817] and the reaction of the population to the new conditions. The President found that the Regulations worked. That the population was generally satisfied and loyal. That the authority of the Chief was respected, and that the people have developed a feeling of confidence in the Central Government. Naturally, complaints of individual injustice and grievance have been made and will, of course, continue to be made. This is inevitable. The criterion by which the Administration should be judged is not the individual complainant, but the general level of well-being which the community enjoys. The Government is not proceeding upon any idealistic theories which have not been and cannot be realised anywhere. Its objective is to deal with internal realities with which it is confronted in such a manner that every reasonable cause of grievance may be removed.

Having reorganized the Administrative Machinery, the next step is to maintain it at a high level of operation and to stimulate the population, inherently suspicious of innovations, to more intense economic activities and to provide agencies for its well-being.

To this end the following limited objectives will be attempted within the next three years:—

1. In relation to its financial obligations.

(a) External Debt

The period of depression which reduced Government income, in consequence of its effect on the prosperity of the population, affected very adversely Government revenues. The result of this is that Government expenditures had to be severely reduced with a view to a balanced budget. Even with such reductions it has for the last four years been found impossible to meet Government obligations on the loan service. The prior consideration to Government was the maintenance of an efficient administrative organization. But revenues realized during this period have been barely sufficient for this purpose, and would not have been available if the charges upon the loan were met on their due date. After careful consideration, it was found necessary to recognize the emergency which this state of the finances created and to declare a Moratorium on the loan payments. This Moratorium is emphatically an emergency measure and will necessarily be revoked as soon as the Liberian Government shall have sufficient funds to meet at the same time cost of Government and payments on the loan. The minimum sum which the Liberian Government has need of for all administrative purposes, including the pay of such Specialists as may be employed in the Service as hereunder mentioned, will be found in the Budget Statement to be furnished by the Secretary of the Treasury. The accumulated deficit on the loan, plus accrued interest at the present rate, is $448,853. The Government, [Page 818] therefore, cannot resume payment on the loan until its income shall have equalled or exceeded the total of these two sums. No effort will be spared on the part of the Government to increase production and secure markets and stimulate the movement of trade with a view to reaching this desirable objective. But until revenues have attained the point just mentioned, it is clearly impossible for the Government to rescind the Moratorium Act.

Nevertheless, the Liberian Government desire it to be definitely and emphatically understood that the suspension of payments on the loan in no wise should be interpreted as a repudiation on their part of their obligation under the Contract. They accept and will continue to accept their obligation under the loan Contract. And that during the course of the Moratorium it is their intention to retain in their service three of the officials provided for under the Contract who will be authorized and expected to discharge their duties as therein provided subject, of course, to the conditions of the Moratorium Act. These officers are, the Financial Adviser, a Supervisor of Revenues and an Auditor. In addition to these, the Government has already made arrangements for an American Officer to reorganize and train the Liberian Frontier Force.

(b) Internal Debt

Payment on the internal debt had also to be postponed. It has been proposed by Government that this debt be funded by the issuance of 3% Bonds which will be amortized annually by drawings from the Redemption Fund to be created. The internal creditors of the Government have all accepted this arrangement and the matter was being put into effect when the Finance Corporation of America suggested that it would be unfair to pay interest on the internal debt and suspend interest payments on their claim which they thought should have prior consideration. The Government did not ignore the force of this argument and therefore has not yet carried out the refunding of its internal debt. Nevertheless, it is essential that this course, or a similar one, should be pursued for the security of the internal creditors and the maintenance of internal credit of the Government.

Public Improvement

One of the essentials for the development of Liberia is means of communication—Roads, Bridges, Telegraph or Wireless Telegraph or Wireless. A Three-Year Program has been instituted which is intended to link up the Capital with outlying sections of the Country. Two main roads are in process of construction: one leading from Monrovia South-East to the Cavalla River, traversing the Central and Eastern Provinces, and one leading from Monrovia North-easterly, traversing the Central, and Western Provinces. These are the main [Page 819] national highways. From these will be constructed Provincial highways branching from the national highways towards the coastal ports and the interior boundaries. By this means motorized transportation of the productions of the country, and means of quick transportation through the different sections for inspection purposes, will be secured. This work, of course, will be carried out at a faster pace than now when a larger fund for the purpose is available. It is evident that larger and larger sums will be available in proportion as the work progresses. The cost of this construction being an element in the plan of Government to increase its income at an early date, must necessarily be deducted from any available sum that this Government may become in possession of before payment on the loan is resumed. Meanwhile, as wider areas are tapped by road construction, trade developed and productions stimulated, Government revenues necessarily will increase and the possibility of receiving a sum over and above the ordinary administrative necessity would be realized.

Since 1931, the internal reorganization of the Government has been carried out. The whole administrative machinery has been reorganized and reformed; incompetent Judges have been retired; the Jury System bettered. There is more effective supervision and the Government is always in touch with the various parts of the Country. It cannot be said that every cause of complaint has been removed, but independent and unprejudiced observers can attest the considerable advance which has been made in this direction.

Meanwhile, for the instruction of the population in improved methods of production and the introduction of more products of economic value, the Government is employing and will continue to employ as funds are available, trained Agriculturists who will establish model plantations whence seeds and plant distribution will be made, and advice given to farmers as to the best methods of developing and exploiting the land. In addition to this, the Government will have no objection to leasing to a limited number of foreign farmers lands not exceeding 100 acres for each individual, provided such individual can guarantee Government that he has capital sufficient to develop to fullest extent the land held under lease. The motive which prompted this suggestion is that the farms thus established will not only furnish possible help to the labouring class of the Country, but will also be patent examples of the best methods of farm administration and culture, and will induce local farmers to pursue their farming activities along the same advanced lines.

A Mineralogical Survey has established the existence in Liberia of minerals and other deposits of economic value. With the advice of Specialists which the Government has already secured, the exploitation of this source of income will be engaged upon terms not inconsistent [Page 820] with the interest of the Republic. Meanwhile, encouragement is being given to such enterprises of local origin as may be initiated.

Social Service

The Government realises its obligations especially in regard to health, and so has created the Bureau of Public Health and Sanitation, and established a Hospital. The Bureau of Health has been granted very large powers and will be placed under competent supervision pending the availability of a body of Liberians capable of taking over the administration of the work. It is desired that Clinics be established in all the principal towns and various districts of each Province, where a medical officer and a competent body of assistants will look after the health of the Country. Encouragement will be given, and has always been given, to the establishment by the various Church Missions of Hospitals Attached to their plants.

(b) Education

A Teachers Training College is now in process of organization, which is to be staffed by specially trained teachers from America, negotiation for employment of whom is now in process. This will raise the standard of teaching and so reflect itself in the work of public education.

The Government is also employing a group of Specialists to be attached to different Departments for the purpose of recommending to Government the best methods of obtaining the objective sought in the program of reform and progress. At present there has already been employed an Economic Specialist Attached to the Treasury Department, and a Specialist in Public Health who is attached to the Bureau of Public Health and Sanitation. Arrangement is being made in America for a Specialist in Education to be attached to the Department of Public Instruction, as well as arrangement for a Specialist in Administration, who will supervise the native administration. He will examine the administrative machinery and make recommendations to Government for the just co-ordination of its different Branches and point out such defects as might appear to him to exist and the remedies he thinks advisable.

In employing these Specialists, the Government is undertaking to follow literally their suggestions in every respect, except where these suggestions are Constitutionally impossible to be carried out, or where they are really objectionable for any fundamental reason, in which instance an honest and fair discussion and ironing out of the points of view will be made before it will be rejected. These Specialists, however, will be secured in countries not having any territorial contiguity to Liberia.

[Page 821]

In regard to the rights to be exercised by these Specialists, these will be set out in their Contracts with Government. Any questions arising as to these rights will be settled by special Arbitrators, one each to be appointed by the Parties and the third to be agreed upon by the two thus appointed. The salaries to be paid to these Specialists shall not exceed $5,000.00 each, except in the case of the Specialist in Administration whose salary has already been fixed in a larger sum.

As regards Trade and Commerce, it is necessary to point out that the economic situation created in the world has practically closed most of the markets formerly enjoyed by Liberian products. The Government has endeavoured to get in touch with countries open to receive produce without imposing any exorbitant burden such as the preferential tariff imposed by the British Government upon extra-imperial products. With this in view, we have already concluded a trade agreement with Poland which we hope will open up the countries of Central Europe to our products for, unless we have opportunity of securing good prices in the markets, there can hardly be any hope for an amelioration of the condition of the Country, since there will be no means by which to carry on.

“E. B.”
[Enclosure 2]

The Liberian Secretary of the Treasury (Dennis) to Mr. Harry A. McBride, Special Assistant to the Secretary of State

Minimum Budgetary Provisions

1. Running expenses of Government $500,000.00
2. Salaries & Expenses of Loan Officials as per Moratorium Act. (4) 26,800.00
3. Salaries & Expenses of Foreign Specialists. (6) 41,240.00


1. To the $460,000.00 of the 1934 Budget extra provision has been made for increase in operation of the Monrovia-Kakata-Saniquelli Road construction, 100 additional Soldiers & Officers of the Liberian Frontier Force, British Postal Administration claims, etc., etc. In addition to some of the increased expenditures of this year, provision will have to be made in the 1935 Budget for one Revenue Launch, Radio Apparatus, British Postal Claims, Road Building Machinery, as well as increases in personnel for Foreign Specialists, New Customs Ports of Entry, etc., etc., $500,000.00 is a minimum provision.

[Page 822]

2. Fiscal Officers:

Financial Adviser—salary $9,000.00
 “   “ —rent 900.00
Supervisor of Revenues—salary 5,000.00
Auditor—salary 4,800.00
Travel Expenses—for Two 1,600.00
Rent 600.00
Medical retainer, minimum medicines 400.00
Military Adviser—salary 3,600.00
Rent 300.00
Travel 600.00

3. Foreign Specialists:

Administration—salary $12,000.00
House 240.00
Economic—salary 4,200.00
Medical—salary 4,200.00
Two Interior Administrators 9,600.00
Educational—salary 4,800.00
House rent–Educ. & Int 600.00
Travel expenses—local 2,000.00
Travel expenses–Foreign 3,600.00
1. Loan Charges: 2. Internal Indebtedness:
1. Balance Interest due 1932
Interest to June 30, 1934
Amortisation 1932
1934 June 30th
$157,710.00 $448,852.00
2. Bills Payable 1929–30
1934 June 30
Unaudited Vouchers 1932 approximate
664,729.74 664,729.74
Total indebtedness as of June 30, 1934 $1,113,581.74
Estimated Revenues for 1935—approximate $500,000.00

N. B. In 1933 there was a cash balance of $144,623.26 as of December 30, 1933 and later used in the 1934 budget.

[Page 823]

There is every indication of there being another cash balance for the year 1934, amounting to at best $70,000.00.

Revenue Receipts From the Months of January to June for the Years 1933 and 1934

Operating Revenues 1933 1934
Customs Revenue $120,425.77 $108,061.50
Port & Harbour Dues 4,200.00 3,686.00
Emergency Relief Fund 23,686.51 22,489.23
Dry Goods Tax 7,874.29 10,061.47
Highway Fund 1,303.28 1,197.10
Internal Revenue 36,643.55 55,296.68
Postal Revenue 1,289.02 1,715.60
Commonwealth District 12,750.09 9,779.24
Township 2,092.19 3,093.96
Special Public Health & Sanitation 1,655.65 2,078.11
Street & Light Tax 345.00
$211,920.35 $217,803.89
Non Revenue
Customs Provisional Deposit $1,316.00 $5,033.07
Property Sale Account 155.50 201.06
Radio Reserve 1,547.42 1,062.43
Miscellaneous Refunds 651.74 86.99
Miscellaneous Revenue & Receipts 221.96
$3,670.66 $6,605.51
Revenues Unclassified 1,485.86 8,900.06
$5,156.52 $15,505.57
Summary 1933 1934
Operating Revenue $211,920.35 $217,803.89
Non Revenue 5,156.52 15,505.57
$217,076.87 $233,309.46
Increase in Total Revenues 1934 16,232.59
$233,309.46 $233,309.46
Bureau of Audits, Aug. 16, 1934 Sgd. Jos. W.S. Barbour,
Inspector of Audits

N. B. 1933 Budget estimate—$485,000.00
1934 Budget estimate—491,450.00

Over half of revenues are collected in Sept., Oct., Nov. and Dec. of each year.

G[abriel] L. D[ennis]
[Page 824]
[Enclosure 3]

The President of Liberia (Barclay) to Mr. Harry A. McBride, Special Assistant to the Secretary of State


My Dear Mr. McBride: Pursuant to our conversation of yesterday, I should like to place on record a statement of what steps the Liberian Government intends taking upon matters covered in that interview.

I. In the Memorandum24 which I had the pleasure of submitting to you enclosing my three-year Program, you will have noted that provision was therein made for a Specialist in Administration. Although it was there stated that he would supervise the Native Administration, it is intended that he will, under the President, coordinate and correlate the work of the Specialists employed by the Government during that period. Whilst it is the Government’s intention to employ Specialists, the number of these must be limited because of financial considerations, so that it does not appear possible or desirable for us to increase the number already decided upon when the purposes for which the Specialist in Administration was engaged would be met by extending his duties as above indicated.

II. In respect of the Fiscal Officers, I wish to emphasize what possibly is not understood generally: That the Liberian Government has never objected to, or prevented these officials from performing their duties under the Loan Contract, subject to the Moratorium Act, but that these Loan Officials, when the Act was passed, refused to function, and their refusal necessitated the Government taking steps to see that the Services which they supervised were not disorganized. If it is understood that the three Officials provided for under the Moratorium Act will agree to perform their duties in accordance therewith until such time as the financial position has become normal, there will be and is no objection on the part of Government to permit them to discharge their duties under the terms of the Loan Agreement, subject to the provisions of the Moratorium Act, in regard to

Temporary reduction in number of these Fiscal Officers to three;
Reduction of their salaries; and
Re-arrangement of priorities in such a manner as will ensure the cost of the civil administration, and the cost incident to ordinary Government expenses and supplies accounts, and the cost of the Specialists shall be met before any other charges.

With these limitations, the three Fiscal Officers have full authority to resume the discharge of their duties under the Loan Agreement.

The Government wish to insist, however, that the persons employed in the Fiscal Service must not only be competent to perform the duties [Page 825] of the offices to which they may be appointed, but also personally agreeable and acceptable to Government. The disposition to ignore Government’s objections to certain men and to force their services upon the Republic for no other reason than because the Finance Corporation of America feel themselves to have the power to do so, will make for continuous friction. This the Government emphatically desires to avoid.

III. With regard to the question of the Depositary being returned to the United States Trading Company Banking Department, I feel myself compelled to say that the past experience of the Government with this Institution, the character of this Bank as a mere appanage of the Firestone operations in Liberia, a lack of guarantee for the faithful and fair discharge of the duties which may devolve upon it as such Depositary, and the lack of any security for Government funds deposited therein, lead the Government to insist that its revenues should not be deposited in the United States Trading Company Banking Department. The Government, however, is prepared to nominate another Depositary for approval of the Fiscal Agent as provided in the Loan Agreement.

IV. In respect of the Firestone Plantations Company, I wish here to reiterate what I have already had the pleasure of saying to Mr. Mitchell when he was in charge of the Legation here in the year 1932, that the Government will give every reasonable support and encouragement to the operations of this Company, realising, as they do, its economic value to the Country. I am, however, constrained to add that if relations between the Company and the Government are to be harmonious, it would appear desirable that the Firestone Plantations Company be represented here by a man who is so temperamentally constituted that he will not look for occasion for irritation, but will be capable of adjusting questions, which must necessarily arise from time to time, on the basis of fair discussion and arrangement.

I hope that this assurance will meet the conditions envisaged in our conversation yesterday.

Yours faithfully,

Edwin Barclay
  1. Annex not printed.
  2. Enclosure 1, p. 815.