Office of the Historian

882.51/2096: Telegram

The Chargé in Liberia (Carter) to the Secretary of State

[Paraphrase]
Monrovia, May 12, 1930—noon.
[Received May 13—10:45 a.m.]

65. Department’s 48, May 9, 5 p.m. A full report, together with the Liberian memorandum dated April 23, in despatch No. 55, May 11,67 sent today by pouch.

(a)
The figure 85 percent is confirmed by the office of the Financial Adviser. Neither interest on the loan nor payments from the loan money are included in “total expenditures”.
(b)
The principal causes of the present financial stringency are: (1) The curtailment of the Firestone operations and reduction of their expenditures due largely to the Government’s labor policy and to the Fernando Po traffic; (2) the maladministration of the hinterland and the price control of the natives whose productivity is discouraged thereby; (3) the unwise financial policy of the Government, subordinated to political considerations which seem to preclude substantial economies or reductions; (4) the slump in the world price of exportable commodities and the general falling off of commerce and trade, thus materially reducing revenues. Withholding the loan money on April 1 was not an essential factor.
(c)
My intervention references envisaged a possible intensifying of American control, including a financial dictatorship, a reform of government machinery, and a reorganization by American officials of the hinterland administration, thus approximating the 1921 loan plan68 instead of forcible intervention. The initiative for adopting such a program would have to come from the Liberian Government in the form of a request for the good offices of the United States (see my 52, April 25, 11 a.m., last sentence). Consequently I have been careful to avoid making any commitments or statements which might be construed as reflecting the views of the United States Government.
(d)
Danger from foreign intervention is not imminent; but it would be distinctly possible in the event of the Liberian Government’s collapse unless the United States should then be prepared to take a firm stand and to undertake Liberia’s rehabilitation.
Carter
  1. Not printed.↩
  2. See Foreign Relations, 1921, vol. ii, pp. 363 ff.↩