Foreign Relations of the United States: Diplomatic Papers, 1945, The Near East and Africa, Volume VIII

882.00/7–445

Memorandum by the Acting Secretary of State to the Vice President of Liberia (Simpson)

Washington, July 4, 1945.

In connection with a conversation which took place today between Vice President Simpson and Mr. Grew, the following represents an elaboration of some of the remarks made by Mr. Grew.

The sympathy with which for over a century the United States has regarded the efforts of the people of Liberia to establish and maintain their independence and to demonstrate their right to a place among progressive democratic countries has been expressed by many friendly acts. This interest is primarily responsible for the preservation of an independent Liberia during a period in which much of Africa was concerted into colonies and protectorates and it was probably the realization of the friendly interest of the United States in its welfare which on several occasions in the past caused Liberia to turn to the United States when in difficulties.

During the present World War the United States signed a Lend-Lease Agreement with Liberia providing for the financing and construction of new port and harbor works at Monrovia. United States technical experts have made geological studies in Liberia. Health and agricultural missions are actively engaged in programs of assistance; further programs for education and economic development are under study.

We have repeatedly interested ourselves in the relations of the colonists and later of the Government of Liberia with the native tribes. We recognize with pleasure the amendment of your Constitution this year, by which your Legislature is enlarged to include three representatives of these native tribes, also the efforts of President Tubman and his administration to correct abusive and corrupt practices on the part of hinterland officials.

It is felt that the steps now being taken by your Government are favorable signs of progress in Liberia. They represent, however, only a beginning in the right direction. We feel very strongly that without far-reaching political and legislative reform the desired economic, social and educational progress in Liberia cannot be obtained and we feel equally strongly that present serious obstacles to progress should be removed.

At San Francisco the delegates of Liberia played an active and constructive role. They assisted in the preparation of a Charter to provide a system of international peace and security under which universal respect for the observance of human rights and fundamental freedoms may be achieved for all men and women without distinction as to race, language or religion. We are glad that Liberia has dedicated itself to a policy designed to achieve world-wide progress and better standards of living.

Financial and Economic Policy

Revenues

The Liberian Government’s revenues for the ten year period ending December 31, 1944 are reported to have been as follows:

1935	$602,717.00
1936	784,065.00
1937	1,012,336.00
1938	883,328.00
1939	826,700.00
1940	749,583.00
1941	982,244.00
1942	1,005,272.00
1943	1,429,926.00
1944	1,598,400.00
Total	$9,874,571.00

The average annual revenue has been slightly less than $1,000,000. The increase in receipts during 1943–1944 and those reported also for the first quarter of 1945 largely must be ascribed to wartime prosperity. Receipts at this level may continue for a short time, but without new sources of income based upon further economic development, it is unlikely that revenues equal to those of the last two years can be anticipated in the post-war period.

The creation of the new port at Monrovia is essential to the economic growth of Liberia, but it is, and will remain, ineffective and will entail annual expense unless the economic development for which it was designed is undertaken and the port used. Without such development it is impossible to foresee any substantial increase in the cargo volume to be handled through the new port. Monrovia now clears annually approximately 9,000 tons. The cost of operation of this port not including allowances for redredging or for breakwater repair is estimated at a figure slightly in excess of $100,000 annually. A substantial part of this amount may well become a charge on your Budget of Expenditures unless shipments are rapidly increased.

Exports and Imports

In 1944 the value of Liberian exports is reported at a little over $10,000,000. Of this sum $9,076,723 represented rubber, which amounted to 91.1% of the total exports. Raw gold, represented 8.2% of that total; an accumulation of approximately two years was included in the total 1944 gold export figures. The next largest export value piassava fiber, represented about one-half of 1% of the total.

Rubber from Liberian owned plantations represents but a small proportion of the rubber shipments. The foreign exchange made available to the people of Liberia by these exports therefore is greatly less than their total value, and probably is not in excess of $3,600,000.

Imports were reported in the sum of $4,104,000. Much of this value is for imported food. The excess of import values over the foreign exchange made available through export sales was covered by various services, Missionary funds, advances by the United States Government, etc.

Authorized Expenditures

In 1944 your authorized Budgets of Expenditures reached the sum of $1,522,137. This represented an increase of 45.7% over the 1943 budget. In 1945 the combined Budgets of Expenditures indicate a total of $2,188,026.

The appropriation for 1945 was made possible through the following availabilities:

Available Funds—1945

Total Revenues, 1944	$1,598.400.94
Less Basic Budget, 1944	680,339.71
Excess of revenues of expenditures available to be spent in 1945	918,061.23
Unexpended balance of leased lend funds	75,929. 83
Unexpended balances of 1944 appropriations carried forward	204,035.42
Total availabilities as above from other than estimated 1945 revenues	1,198,026.48
Basic Budget, 1945 Estimates	990,000.00
Total availabilities, 1945	$2,188,026.48

If budget estimates for 1945 are fully realized some excess of revenues will become available to be included in the 1946 estimates. However, it is apparent that the Government of Liberia has increased its current expenditures to an amount which exceeds the expanded receipts of 1943 and 1944 and goes far beyond the income of the Government before the War. Liberia cannot follow for any great length of time a policy of annual expenditure in excess of annual revenues without running the serious risk of financial disaster.

Future Policy

We have been advised of the desire of the Government of Liberia to carry out certain new projects of public works, among which are:

(a) to move its Capital to a new location in the interior at a cost of several millions of dollars;

(b) to install a sewage and water supply;

(c) to construct a hydroelectric plant for power;

(d) to construct a railroad for the development of the interior;

(e) to hold a Centennial celebration in 1947 which will require substantial new construction and financing;

(f) to construct a stadium at a cost of $300,000.

We understand that the Liberian Government desires to explore in the United States the possibility of financing one or more of these projects. We venture to suggest that it would be undesirable to assume a number of unrelated financial commitments involving pledges of revenues not now obligated. It seems to us that it would be appropriate to first prepare a comprehensive program indicating the various projects and costs of public works, health, educational and agricultural developments planned. This will permit you to make the best use of Liberia’s financial resources and to give priority to those things on your financial program which you desire first to accomplish.

At this time we are assisting Liberia by advancing funds necessary for the construction of the new port, by assuming in some instances all expenses, and in others the more substantial part of the costs of the Economic, Health, Agricultural and Educational Missions which have been requested by your Government and which are now in Liberia. To this extent the Liberian Government’s current budget has been relieved of this burden. However we are of the opinion that no satisfactory development in Liberia can be expected from the mere supply of funds and facilities by the United States, or by the use alone of Liberia’s temporary surplus revenues. What appears to be needed is a far-reaching program of economic and social development adjusted to Liberian needs and so implemented as to insure its success.

It would be appreciated if upon your return to Liberia, you would inform the President and other appropriate authorities of your Government of our continued interest in the welfare of Liberia and the Liberian people. It is hoped that the Government of Liberia will give careful consideration to the views which we have expressed and will adopt measures which, in our opinion, are necessary if Liberia is to take its place among democratic, progressive nations.