882.51/1844: Telegram

The Ambassador in France (Herrick) to the Secretary of State

[Paraphrase]

PARIS, November 2, 1925-3 p. m.

[Received November 2-2:22 p. m.] 534. Your 398 of October 28th. The Liberian Secretary of State, Barclay, informs me that he understands fully the policy of the Department regarding the flotation of foreign loans in the United States, and that he does not expect to receive from the Department a memorial opinion on the tentative loan terms, which he describes as being in an "academic stage" as far as his Government is concerned. For his further guidance the substance of your 398, dated October 28th, was conveyed to him by memorandum.

HERRICK

882.6176 F 51/67

Mr. Harvey S. Firestone to the Assistant Secretary of State

(Harrison)

AKRON, OHIO, November 23, 1925.
[Received November 27.]

DEAR MR. HARRISON: The pressure of business connected with the close of our fiscal year has prevented me from answering your letter of October 31st, and I trust you will pardon the delay.

We originally prepared our proposal to cover a term of ninetynine years at a certain rental. It was the suggestion of your Department that a shorter term subject to renewal and revision of rates, might be more equitable. We changed our proposed contract to conform to this opinion, and in the form taken to Liberia by our Mr. Hines and there presented to the Liberian Government it called for a term of fifty years subject to renewal, revision of rates and arbitration thereof in the event of dispute. Many weeks were there taken up in negotiations. The Liberian Government rejected the shorter term provisions, and put back in the provision that the contract be for the long term with fixed rental not subject to revision, as it is now written. The contract being otherwise satisfactory to us, we had no alternative except to submit.

With reference to loan provisions, they appear in the final executed contracts on account of the desire of the Liberian Government to have our assistance and the State Department's advice in securing whatever loan they might be able to obtain in this country-it being, of course, understood that such would not be available to them if not consistent with the policy of our State Department.

I hope to have the pleasure of calling upon you the next time I am in Washington, and I wish to thank you for your letter.

Yours very truly,

882.6176 F 51/207: Telegram

H. S. FIRESTONE

Mr. Harvey S. Firestone to President King of Liberia 1

[AKRON, OHIO, December 19, 1925.]

Ross advises that press reports stating we expect employment thirty thousand Americans to supervise plantations has had unfavourable reaction in Liberia. I assure you this is only newspaper story. Actual facts are we will not send one hundred Americans or Europeans to Liberia in 1926 and at no time could we possibly use over one thousand or fifteen hundred for entire development. My regards to yourself Secretary Barclay and best wishes for very happy holiday season.

HARVEY S. FIRESTONE

882.6176 F 51/69

The Secretary of Legation at Monrovia (Wharton) to the Secretary

No. 318
Diplomatic

of State

MONROVIA, December 29, 1925.
[Received February 5, 1926.]

SIR: This Legation has the honor to transmit the following report in confirmation of cablegram number 43 dated December 28th, 1925.6

62

On Wednesday the 16th of December, His Excellency President King, delivered his annual message to the National Legislature. Copies of this message will be transmitted to the Department when available. The message was well received except general criticism because nothing was stated either with reference to the Firestone concession, the loan, or the mission of the Liberian Secretary of State, Hon. Edwin Barclay, to the United States and France. This omission proved shrewd political strategy.

Later, however, at a private meeting all agreements were read to the National Legislature, cabinet, and elder statesmen, (ex-president Arthur Barclay, ex-president D. E. Howard, etc.)

This Legation is well informed that at this meeting President King spoke very favorably towards the United States and Secretary

1 Copy transmitted to the Department by the Chargé in Liberia under covering despatch of Mar. 13, 1926; received Apr. 15, 1926.

Barclay's report. Those present were permitted to discuss at length all agreements.

The apprehension relative to the large number of American employees to enter Liberia is entirely over for a cable from Mr. Firestone denying the report that 30,000 men were to be used, was read at this meeting. Further, upon considering the millions of dollars necessary for such a staff of men, the utter impossibility of this propaganda was self evident.

This Legation has little doubt concerning the outcome of the Loan agreement with the Finance Corporation of America, nevertheless, the points raised will make it necessary for an extension, for it is impossible for this agreement to be submitted to the Legislature and negotiations concluded by January 1st, the expiration date of the said corporation's offer. There is a general feeling that should the time be extended the agreements will be modified and ratified before the end of January 1926.

Many points have been raised and contrary views expressed relative to the loan agreement, especially with reference to powers of the Financial Adviser, number and salaries of officials provided, and the pledging of all revenues of the country. However, this Legation is enclosing the present proposed amendments of the President which he hopes will so modify the agreement that it will be acceptable to the Legislature.

These amendments should give no great concern, e. g.:

(a) Art. II and the omission of the words "in time of war as well as time of peace" may be considered surplusage;

(b) omission of "direct and control" Art. VII paragraph 2, page 8; (c) the change of the wording in Art. IX compels the President to show cause for removal while the Financial Adviser under this amendment does not "request" but merely has to withdraw his recommendation in order to remove an officer. There is nothing stated relative to the Financial Adviser showing cause for such withdrawal of his recommendation;

(d) mere omission of two words "suitable" and "actual" which are implied when omitted;

(e) striking out that "No custom house shall be established or discontinued or opened or closed without consultation with and the agreement of the Financial Adviser"; so far as the agreement of the Financial Adviser and his powers hereunder is concerned the objection may be considered justifiable as usurping sovereignty. There is sufficient control left in the Financial Adviser under the budget; (f) change in paragraph 6 is absolutely necessary in order to comply with Article 3 section 4 of the Liberian Constitution;

(g) addition to Art. X should not be objectionable;

(h) the change in Art. XV seems to be fair and reasonable for the loan must be refunded and until that time no loan can be floated.

In view of the foregoing proposed modifications, while there may arise some difficulty yet unseen, an extension is necessary and it is hoped the desired end will be effected.

This Legation has been placed in an exceedingly embarrassing position for no copies of the agreements reached or signed by the American corporations and the Liberian Commission have been received. It is appreciated that the negotiations are not with the United States Government, however, though this Legation may be familiar with the agreements prior to the visit of Mr. Edwin Barclay, yet there exists a hiatus and it is with difficulty, considering the depleted staff at this post and an unwarranted expenditure of time in obtaining and understanding important information relative to the advancing of American interests. [sic] I have [etc.]

CLIFTON R. WHARTON

[Enclosure 1]

The General Receiver of Customs of Liberia (De la Rue) to the American Minister (Hood)

[MONROVIA,] December 28, 1925.

SIR: I have the honor to report, for transmission to the Department that the Agreement with the Firestone and incidentally, the Agreement with the National City Bank of New York have been before the Liberian Legislature in joint session, and have been explained to the Cabinet by the Secretary of State.

2. The Firestone Agreements were the first matters taken up, and with one or two small and unimportant points were generally received with satisfaction. The point that caused the most apprehension and discussion was occasioned by an American newspaper printing that 30,000 American employees would be employed here by Mr. Firestone. The representatives viewed this suggestion with considerable apprehension as it represents a larger number of persons than is contained in the Americo-Liberian population. There was a strong and decided effort to limit the number of employees from the United States which Mr. Firestone would be permitted to bring into this country. Happily I believe this matter is now settled without such legislation being deemed necessary.

3. Another point raised was the question of phraseology in the No. 2 Agreement (Firestone) wherein it was stated that upon Mr. Firestone selecting the land, title would pass. It was thought that this was misleading because the only estate Mr. Firestone would have would be a leasehold estate, and further, it did not specify that he was to pay rent upon taken [taking] possession. This point has

been covered by a letter from Mr. Ross and I believe that matter is closed also.

4. The question of the Agreement with the National City Bank of New York has raised a storm of discussion, but up to the present time, I have no reason to be apprehensive as to its successful passage. The delay in getting the documents to Monrovia did not permit the President and Cabinet to make any study of the various papers before the meeting of the Legislature, nor did it permit them to explain to the leaders what it was all about. This has resulted in rendering it impossible to bring the matter properly before the Legislature before January 1, 1926, which date is specified as being the date when the offer on the part of the Finance Corporation of America and the National City Bank expires.

5. Under those circumstances, the President has directed the Secretary of State to cable the National City Bank requesting that the matter be held open and the time extended to the 30th of January, in which request I totally concur as I believe this will bring about a satisfactory ending to the negotiations.

6. In the above connection, the President has requested me to transmit, through the Legation, to the American State Department, by telegraph, my concurrence in the request for this extension of time. for the reasons given above. I therefore request you to transmit a cable to the Department incorporating this idea and suggesting to them that the extension requested by the Liberian Government will, in my opinion, result in an entirely satisfactory ending within the next two or three weeks.

I have [etc.]

[Enclosure 2]

S. DE LA RUE

Proposed Liberian Amendments to Draft Loan Agreement

ARTICLE II SHOULD READ:

The Government covenants that both principle [sic] and interest of the Bonds will be paid promptly as they respectively become due and that any and all sums and expenses in connection with the service of the issue will be paid in conformity with Article V hereof, and that payments shall be made in the Borough of Manhattan City and State of New York, United States of America, at the Head Office of the Fiscal Agents in Gold Coin of the United States of America of or equal to the present standard of weight and fineness and shall be paid without deduction for or on account of any taxes assessments or other governmental charges or duties now or hereafter levied or to be levied by or within the Government or by any taxing authority thereof.