882.6351 U.S. Steel Corporation/23: Telegram
The Minister in Liberia (Walton) to the Secretary of State
[Received August 25—2 p.m.]
61. Your 35, August 22, 6 p.m. No “initialed” iron ore concession has been granted Neep. The initialed memorandum giving company the right to exploit iron ore was submitted to the Legislature which disapproved some of the terms, thereby modifying the memorandum in a substantial degree. The Legislature passed an act authorizing the Liberian Government to grant a concession in accordance with modifications. These modifications were not acceptable to Neep which proposed certain amendments as a basis of acceptance. These amendments will be referred back to the Legislature for approval or disapproval. In my talk with the President he avowed he would not use his influence to bring about the Legislature’s acceptance. I think it can be taken for granted, that in view of the distinctly hostile attitude of the President the prospect of Neep and the Legislature coming [Page 813] to favorable terms is very remote. In the opinion of the Liberian Government the initialed memorandum merely indicates the authenticity of the tentative arrangement with the executive department and Neep and that such initialing is of no binding effect except when final approval is given by the Legislature.
President Barclay has shown me communications purporting to prove that Neep has no effective agreement with the Liberian Government and for that reason company stopped boring in July. The Swedish engineers and other technicians returned to Monrovia 3 weeks ago. It is pointed out that Caffe in a letter under date of July 19, received by the President July 26, announced that until a definite agreement was reached preliminary work at Bomi Hills would be in vain. In a letter under date of June 9 the Liberian Government reminded Neep that the company had undertaken the borings at its own initiative and insistence, for which the Government would not assume responsibility.
According to the Liberian Government, up to now Amsterdamsche Bank has never been asked by the Government to secure capital but to act as trustee to see that the majority of shares would get into the hands of desirable nationals. It is thought here that the bank’s latest overtures to the United States Steel Corporation have been prompted by favorable confidential reports of borings which reports have been kept from the Liberian Government. Complaint is made here that the only boring report submitted to the Government was by Caffe in May which was most unsatisfactory because of its lack of technical confirmation and vagueness. I am informed that on several occasions the bank has intimated to the Liberian Government it would not be averse to raising necessary capital to exploit iron ore provided operations were not conducted under the name of Neep.
Under the circumstances President Barclay does not see how a serious conflict should arise which might affect adversely the contemplated operations of the United States Steel Corporation.