882.635 Neep/60: Telegram

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

13. Your 23, April 5, noon. In reply to President Barclay’s questions, you may state that any arrangements made by Amsterdamsche Bank for American participation in the Neep concession would appear to be a matter for negotiation between the parties concerned. The President will, it is felt, understand that the Department can take no position in respect to this matter other than to assist in putting interested American concerns in touch with representatives of the bank.

With respect to possible exploitation of the deposits by an American company, it does not seem feasible to advance any further comment than that contained in confidential telegram 7, February 19, 1 p.m., until detailed geological or mineralogical reports and ore samples are available. It is obvious that the obtaining of these technical reports and samples is of paramount importance to the progress of discussions.

(2) In view of the persistent failure and delay of the Neep representatives to furnish such reports, President Barclay may wish to consider the possibility of employing an expert independent geologist to make a survey of the Bomi area. It is thought this should not take more than 2 or 3 weeks after the expert’s arrival at Monrovia. The Liberian Government would thus not only obtain an impartial expert appraisal of its iron ore resources but, if the Neep discussions prove in the end unsatisfactory, would be in a position to negotiate directly with such American or other concerns as might be interested. Should the President inquire as to the cost of such a survey, you could say that a rough estimate would be some $5000 or $6000. The Department would be glad to obtain a list of available American experts of this kind should the Liberian Government so desire. It is also possible that the loan of an expert might be obtained from the British Geological Survey Service in West Africa.

(3) With further reference to paragraph 3 of your 17, March 3, 10 a.m.,14a the suggestion has been made that an equitable royalty for iron ore deposits might be based on a flat figure per ton produced, rather than on value. It might be provided that in no year should the total royalty fall below a specified minimum sum, but if through diminished production in any given year the royalty payable should be less than the specified minimum, the difference could be credited against the royalty payable in succeeding years, when through increased production the specified minimum was exceeded.

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However, no conclusion can be reached as to what an equitable royalty might be until data is on hand showing (a) the exact quality of the ore, including the percentage of iron, as determined by a typical analysis, and (b) the method and probable cost of extraction. You may inform President Barclay that as soon as this information is available we shall be glad to proceed further in our study of this matter.

(4) The preliminary report enclosed with your air mail letter of February 26, 1938,15 is undated. Is it your understanding that this constitutes the report of the German mineralogist mentioned in the Legation’s despatch 88 of March 9, 1937?15

  1. See footnote 13, p. 782.
  2. Not printed.
  3. Not printed.