882.51/2089: Telegram
The Chargé in Liberia (Carter) to the Secretary of State
[Received April 11—8:10 p.m.]
48. On Tuesday59 McCaskey60 addressed the President of Liberia formally regarding the grave financial condition of the Government and the necessity for rigid and far-reaching measures of economy. According to McCaskey’s figures, revenues had so fallen off that a deficit of over $200,000 and perhaps as much as $300,000 may be expected at the end of the year. Furthermore, at the present time only about one-half of the sum required to meet May 1st interest on bonds is available and it is not unlikely that the Liberian Government will be obliged to postpone this payment. The prospects for the payment of the November 1st interest and the amortization charges are even worse. Salaries in many departments are definitely in arrears, so much so that it is seriously proposed to pay off but 50 percent of these arrears at this time.
On Wednesday McCaskey was invited to discuss situation at a Cabinet meeting. As a result, the President intends to appoint commission to investigate various departments to determine what positions can be dispensed with and what economies can be effected by consolidations of various services and bureaus. Commission will probably consist of the American auditor and two others as yet not appointed.
[Paraphrase.] Concern is felt because 85 percent of Liberian expenditures go to salaries for positions filled strictly on a party basis, so that to vacate these great difficulty may be anticipated. Neither President King nor any of his Cabinet members seems billing to accept the onus of reducing salaries, though substantial economies can be effected only under the head of salaries. McCaskey informed me, in fact, that the apparent tendency at the Cabinet meeting was to ask him for a release of part of assigned revenues in order to meet salaries in arrears, rather than to face the fact that, if a deficit is to be avoided, future salary payments probably will have to be reduced to 65 percent.
Unless the Liberian Government takes rigorous measures, which I do not expect, I anticipate not only a default on interest but also a [Page 395] serious paralysis here of responsible government, a condition which will be intensified by the probable discrediting of many high Government officials through the slavery inquiry.61 This may tend to throw the Republic into a state likely to invite increasing intervention, and the United States Government, perhaps in a comparatively short time, may possibly have to consider the advisability of a temporary friendly intervention on Liberia’s behalf in order to forestall European intervention, which probably would signify the end of Liberian independence.62 [End paraphrase.]