882.635 Neep/6: Telegram

The Secretary of State to the Minister in Liberia ( Walton )

24. Personal for the Minister from McBride. Your despatch 126, September 7 regarding Neep concession. The following questions occur to me personally in connection with the indicated sections of the agreement.

  • Article 3, Section D. In order to spread development through various sections of the country rather than concentrate improvements in Monrovia, it might seem in the best interest of Liberia to select Cape Mount as the location for the proposed harbor basin.
  • Article 4, Section C. It might appear to be more advantageous for Liberia to provide for royalties on percentage basis of sales value or of profits, in accordance with the provisions of Section 3, Article 1 of the Liberian Executive Order No. 6 of July 20, 1936, rather than to stipulate for a fixed royalty. In as much as Liberian iron ore is understood to be of high quality, it would seem that royalties on a percentage basis, along the lines provided for in the above-mentioned executive order, might give the Liberian Government a higher return than that proposed by the agreement.
  • Article 4, Section E. In view of the relatively small acreage which Neep proposes to lease, 300 white employees appears to be unduly large and out of proportion to the character and extent of the work to be undertaken. The potential disadvantages inherent in admitting an unnecessarily large number of employees of other nationalities will doubtless not have escaped the Liberian authorities.
  • Article 4, Section I. Although the purposes which the Liberian Government had in mind in inserting this article are clear, the question arises as to whether those purposes will be accomplished by the present wording. For example, what is to prevent the sale or transfer of Neep shares with the result that control of the company would pass to interests which might be unfriendly to Liberia?

In the event that your opinion is requested regarding the terms of the contract, you may feel it proper to offer your personal views along the lines of the foregoing. If changes are to be made in the contract I assume that it would be better to make the alterations before the agreement is submitted to the Legislature. [McBride.]

Hull.