882.515/60: Telegram
The Chargé in Liberia (Wharton) to the Secretary of State
[Received March 9—9:38 a.m.]
62. From McBride. Department’s 36, March 5, 8 p.m. Since arrival here have made study of currency problem and President Barclay last week said he would like to take this matter up at our next conference on Monday or Tuesday. Have also consulted with Financial Adviser and Manager of Bank of Monrovia.
The greatest obstacle heretofore has been costs involved in freight and insurance in getting British silver back to England, and in getting American silver here to replace it. These costs were estimated at 100 to 150,000 dollars which Liberia does not have available for this purpose. Further obstacle at this time is fact that Britain will not buy back the British silver circulating in Liberia.
Arrival of American forces presents an opportunity which Liberia may never have again of obtaining considerable quantities of American currency without cost to Liberia and I think Barclay will desire to take advantage of it. This would be especially true if War Department would consent to bring, in addition to its own needs, some $500,000 of American currency for the Bank of Monrovia from the bank’s funds in New York without Chargé for freight and insurance.
War Department might also be willing to anticipate its future needs here to extent of sending out about $1,500,000 in United States currency to be placed on deposit with the Bank of Monrovia to be drawn against by our disbursing officers.
In this way the problem of getting an initial supply of American money sufficient to enable the bank to handle conversion here would be solved. This currency should be confined to metal from 1–cent pieces to silver dollars. There should be no dollar bills as they are unsuited for native circulation here and commissaries and paymasters should be instructed on this point. Small quantities of bills in 5–dollar denomination and upwards could be included for larger bank transactions.
As to withdrawal of British currency there is approximately 2 million dollars worth in circulation here all in silver coins. My recommendation would be for United States Government, if feasible, to arrange for shipment on homeward bound warships of whatever quantity of British silver can be gotten together, such shipments to be without costs for freight and insurance. United States Treasury would then have to insist with British Government that over a certain period of time they take this off Treasury’s or Bank of Monrovia’s hand in the United States at a favorable rate of exchange so there would be no loss to Liberia or to Bank of Monrovia. It might be [Page 432] better if United States Treasury could insist with British that this British currency be accepted from our warships if delivered at Freetown, and credit established therefor in New York.
The conversion into United States currency should take place here at 4 dollars to the pound at which rate 6 pence is exactly equivalent to American 10 cents. To convert at this rate Bank of Monrovia would require guarantee that sterling taken out of circulation could be disposed of at same rate without any shipping or insurance Chargés.
There are other details such as exchange locally of Liberian copper for United States 1–cent pieces which could be determined later.
It will be appreciated if Department will consult with War and Treasury Departments on above suggestions. I will explore matter further with Barclay and report as soon as possible. [McBride.]