876.10/9–1851: Telegram

The Ambassador in Liberia (Dudley) to the Department of State


121. Emb believes Dept’s proposal budgetary advice Lib Govt1 very sound. Agrees authoritative advice needed this stage development. Lib willingness accept such advice hinges on personality of individual and Tubman’s learning by extended experience to understand wisdom of accepting expert opinion on fiscal matters. One present source of fiscal mismanagement lies in the supplemental budget provided for under the loan agreement. Under this system annual revenues have been consistently underestimated. The basic budget is based on estimated revenues. This leaves a substantial sum of money each year which is expended unwisely and approved by the legis as a supplemental budget after expenditure.

Therefore part of Dept’s recommendation shld include the abolishing of the present system of budgeting funds. This method was all right twenty years ago2 to protect the loan and allow govt some discretion. It is useless now and leads to abuse by Tubman and others concerned, particularly since the legis is a rubber stamp.

Emb understands Larabee due here this week. Undoubtedly Tubman will discuss loan agreement. Dept’s advice solicited soonest.

  1. The proposal under reference was first broached in telegram 87, September 15, to Monrovia, not printed. (876.10/8–3151)
  2. The reference here is presumably to the loan agreement of September 1926 between the Government of Liberia and the Finance Corporation of America (the Firestone loan agreement). For documentation on the negotiation of the 1926 loan agreement, see Foreign Relations, 1926, vol. ii, pp. 503 ff.