882.01 Foreign Control/922a: Telegram

The Secretary of State to the Chargé in Liberia (Hibbard)

Please deliver on Wednesday the following confidential and personal message from McBride to President Barclay: [Page 828]

Careful consideration is now being given by the Department of State to my Report in which was embodied your Three Year Plan, and I have every hope that the Department will be prepared to cooperate. I am sending this personal message simply in continuation of the conversations we had in Monrovia in order to complete our understanding here on points which could not be fully discussed at that time because the necessary data and figures were not then available. The points in question are covered in your plan in a general way but it would be helpful to me and would undoubtedly expedite matters at this end if more definite assurances on the following items could be received from you.

That the plan substantially in the form in which it was given to me be enacted into law or made the subject of an executive order so as to give it some sort of definite legal status.
That the Liberian budget be limited during the Three Year Plan to $450,000, including therein all government expenses, costs of fiscal officers and specialists provided under the plan, as well as providing an adequate amount to continue road construction in the interior, and that revenue above $450,000 shall be applied to interest on the external loan. Any excess above these two figures to be divided into three parts—one for retirement of external bonds; one for retirement internal indebtedness (but not for interest thereon); and one for further appropriation or use by the Liberian Government—this latter amount to be used for education, further road construction, and other purposes. This suggestion, which I believe is in line with your intentions, is put forward because I find that the Department of State feels that the ultimate success of the Plan depends so largely upon a fiscal system which provides specifically for the sums necessary for carrying out the Plan.
That the Liberian Government will do what it can to aid and assist American religious, educational and philanthropic enterprises operating in Liberia.
That with regard to the plantations agreement, the Liberian Government will, in keeping with the general provision in your plan, assist in whatever way may be possible, as it is felt that this offers the greatest source for future economic prosperity which Liberia possesses; that Liberia will refrain from interference with the business activities of the Firestone plantations, will continue its previous understanding as to Customs regulations applying thereto, as well as the past arrangements under which the plantations’ radio station has been operating, inasmuch as these factors seem more or less essential to the effective operation of this enterprise which is so important from a Liberian revenue-producing point of view.
That, because of the desirability of increasing Liberian revenues as rapidly as possible, Liberian officials will not interfere with the normal supply of laborers for the rubber plantations and that assistance will be given in the establishment of the necessary permanent villages within the limits of the plantations.
In so far as the loan Agreement is concerned, I find that the Department of State is strongly of the opinion, just as you are, that the clearing up of the financial situation is an essential requisite of the success of the Plan. We are led to believe that the Firestone interests will be willing to reduce the interest rate on the loan to five per cent, and that they will be willing to accept essentially the provisions [Page 829] of your Plan in so far as the financial matters are concerned, agreeing to the necessary changes in the Loan Agreement. They would, however, expect that the various acts of Legislature, such as the Moratorium Act and other measures infringing upon the Loan Agreement, then be rescinded, and we understand that is also your intention. In this connection, I have seen a copy of a proposed supplementary agreement to the Loan Agreement embodying the above provisions, and personally and unofficially I believe it contains the changes you desire and conforms with the provisions of your Plan. The Finance Corporation is cabling this supplementary agreement to you immediately for your consideration and, if you approve, for that of the Legislature.
For your personal and confidential information, it is my understanding that the Firestone interests would be willing to appoint a new representative in Liberia, that they would immediately rehabilitate the hospital on the plantations and provide a medical officer therefor, that they would undertake the early construction of large warehouses, model villages and further planting, and would in every way show their willingness to cooperate and assist you in your Three Year Plan with the resulting increases in Liberian revenues. They will assist in extending radio telephone communication from Monrovia to Cape Palmas and to interior if you so desire, thus furnishing Liberia with most modern and rapid means of communication. Since it appears that Mr. Firestone is willing to cooperate so fully toward the success of your Plan, he will probably feel hurt if the depositary remains with West and Company and is not returned to the United States Trading Company, as this will appear to him as a lack of confidence and cooperative spirit on the part of the Liberian Government. It would be splendid if in this complete new alignment you could concede this point.

I find a distinct disposition on the part of the Department of State and of the Firestones to cooperate in a generous manner, provided you can prevent bargaining over small and non-essential details.

I shall eagerly await your reaction to these suggestions and hope that it will be favorable because I should be most happy if a solution of our difficulties could be brought about without further delay. I am personally confident that as soon as these points are cleared up the Department will be in a position to consider the whole program in a most friendly and cooperative manner.

I shall be glad to give you names of one or two men who might be considered for employment as specialists as soon as possible.

I feel that you have a marvelous opportunity to make a great name throughout the world as a constructive leader and wish you every success.