882.635 Neep/24: Telegram

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

67. Your telegram No. 35, December 3, 7 p.m. Conferred with President today as you were aware and really received with due appreciation. Impasse between President and Neep over amendments and failure of Neep to satisfy Government of its financial status, fundamental questions answered vaguely, indefinitely, or not at all. I venture prediction that act will not be approved by the President.

Neep takes emphatic exceptions to provisions in the act: that at least 60 per cent of the shares under the present or any other future authorized capitalization shall be issued only to Netherlands or Liberian nationals, and none or any interest therein shall be transferred inter vives or mortis causa to any person, natural or judicial of any other nationality without the prior written consent of the Government thereto; that should Neep decide to produce metals from ores of any kind won from areas granted under agreement, and export or dispose of such metals instead of ores, Government shall be entitled to a royalty on such metals of not less than 15 per cent of value f. o. b. Monrovia; that Neep employ 150 instead of 300 technicians.

Neep has been unable to answer questions satisfactorily relative to its capitalization, number of shares of stock issued and par value of a share, the principal stockholders and how many shares owned by each, if the estimated capital necessary to establish proposed enterprise is between $6,000,000 and $7,000,000, has Neep at present unobligated assets sufficient to finance 50 per cent of capital investment and of what do these assets consist.

The Government is informed by D. Caffe, local representative, that Neep’s resources are formed from substantial resources of four directors—the three Blochs and K. Ginsberg—there and has opened a revolving credit of 25,000 pounds for 14 months at the Bank of Monrovia. Telegrams signed “Amsterdamsche Bank” sent to President at Caffe’s instance stating “company’s means are considerable and several times more than nominal capital. Management highly respectable and capable and would not take engagements they could not fulfill. Information is given confidentially and without our responsibility.”

It is becoming increasingly apparent to high Government officials that company’s financial outlay is negligible for a $7,000,000 project and that promoters are probably seeking concession as a speculation.

Neep has advised the Government that it intends to divide remaining shares of stock with American and Swedish mining interests but is unable to give names.

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President Barclay wishes to assure you that his views are very similar to yours with respect to agitation over African colonies which he follows closely. He appreciates political implications.

I have been asked that you suggest some adequate arrangement making possible the exploitation of Liberia’s rich iron ore under desirable financial arrangements. Should Neep’s proposal be ultimately rejected, the President does not wish to be criticized abroad nor accused at home of refusing a concession that would have materially contributed to the prosperity of the country. The Legislature has vested the President with broad powers to represent government on controversial issues.

In view of the latest developments I do not think it is necessary to negotiate for new Legation site and that engineer should start for Monrovia as soon as possible. In the December 12 pouch I am transmitting amendments to act and copies of recent correspondence between President and Neep representative.