882.51/2093: Telegram
The Chargé in Liberia (Carter) to the Secretary of State
[Received May 5—9:45 a.m.]
58. My 48, April 10, 5 p.m., and 52, April 25, 11 a.m. Secretary Barclay sent for me May 1 and discussed Liberia’s serious financial condition much as President King had done. Barclay then handed to me a memorandum on the subject, signed by the Secretary of the Treasury, which is being sent the Fiscal Agents in America and which I was requested to transmit to the Department of State for its information. The memorandum in substance states that, owing to the present depression, the money left after meeting the 1926 loan charges will be insufficient to sustain the dollar on a workable basis. The memorandum specifically requests the Fiscal Agents’ good offices to assist the Liberian Government in obtaining from the Bank of British West Africa enough funds (I understand the Government desires £40,000 sterling) to keep the Government running. (The bank has already declined to do this unless the Liberian Government pledges as collateral certain of its unassigned revenues; and the Acting Financial Adviser, McCaskey, feels that the Fiscal Agents, under the 1926 loan agreement,65 already have a prior lien thereon. I understand that the bank is cognizant of McCaskey’s point of view.) I informed Barclay of my willingness to transmit the memorandum, but said I was inclined to believe the matter would be regarded by the Department as one to be settled without its intervention between the Liberian Government and the Fiscal Agents.
I told Barclay what I had previously told King that the request for assistance would, in my opinion, receive a more sympathetic American welcome if it were accompanied by some such definite gesture as the Liberian Government’s active support of the committee mentioned in my No. 52; and he appeared to appreciate my statement. The committee, in fact, has been formed and has begun its survey; but, as McCaskey and I opine, it is doubtful whether much practical effect will be given the committee’s recommendations because of the many political and personal factors involved. It was hinted by Barclay rather obscurely, but quite definitely, in my view, that the Liberian Government would, in case the desired aid from the Fiscal Agents were not forthcoming, then seek assistance from certain extensive British and German interests (the United Fruit Company was also mentioned; see my 54, April 25, 3 p.m.66) which alread) had sought a [Page 397] Liberian foothold but had been turned down out of consideration for the United States. While this may be bluff, of course it is always a possibility.
I abstained from reminding Barclay that already the Liberian Government was late on the interest on the bonds for May and that on two occasions in the last few days the Liberian Secretary of the Treasury has openly taken action in clear violation of the 1926 loan agreement.
Should the Fiscal Agents decide on acceding to the Liberian Government’s request, they would do well, pending such time when Liberian finances have been put in order and effective governmental reorganization has occurred, to insist upon American control to a degree well beyond that provided in the 1926 loan agreement. The Liberian Government would undoubtedly vigorously oppose this, but I do not see any other solution to a situation becoming daily worse and which easily may lead to chaotic social and political conditions. McCaskey and Ross, the Firestone general manager here, have expressed their full agreement with the above.
- Foreign Relations, 1926, vol. ii, p. 574.↩
- Not printed.↩