763.72119/4815: Telegram

The Acting Secretary of State to the Commission to Negotiate Peace

2108. For Mr. Lansing.

Your 1873, April 30, 6 p.m.

The Department notes your discussion of a possible mandate to the United States in respect of Liberia, and does not wish to be understood as advising on the desirability of such action if the President decides upon that course, but the Department understands that the situation in Liberia is such that any effective assistance to that country must be immediate, and will not admit of delay which would ensue if the arrangement is to take the form of a treaty or of a mandate, which could not be made effective for several months, on account of necessity for obtaining the approval of the Senate and possibly of enabling legislation by Congress. If a mandate to the United States for Liberia is contemplated, the Treasury is understood to prefer to await this arrangement. If, however, no mandate or treaty is in view, it is understood the Treasury is prepared to take steps to execute plans in accordance with Department’s 1722, April 24.

Two courses seem open. One, an arrangement whereby the Banker’s agreement with Liberia of 1912, remains substantially in force, but with the receivership entirely American. It is understood this was the purpose of the Department’s memorandum of November 19, 1918. This plan would, of course, require the approval of Great Britain, France, and the interested Bankers; at least such a change in the contract of 1912 presumably would not be made without the consent of the interested parties. The understanding with Great [Page 479] Britain and France could be arrived at by a formal acceptance by note of the arrangement outlined in the memorandum of November 19, 1918. It would not seem necessary for this understanding to have the approval of the Senate, in view of the powers of the Secretary of the Treasury. If additional assurances on the part of this Government are required by the British and French Governments, they doubtless will indicate the form and nature of the assurance to be given. The present arrangement with respect to Liberia was entered into through exchange of communications and it would seem that the understanding with Great Britain and France might now be reached in a similar manner without submission to the Senate. At the same time that the understanding with Great Britain and France was being arrived at, or subsequently, an arrangement between the Bankers and Liberia, making such changes as are necessary in the organization of the receivership, so as to give the United States entire control could be reached.

Two. If Great Britain and France refuse to agree to the arrangement just suggested, the advances made by the Treasury may be used to pay up the bonds issued under the Banker’s contract of 1912, and thus to eliminate it entirely. It is the Department’s understanding that under this contract Liberia may at any time make additional payments to the fiscal agents of the loan for the account of the sinking fund to be applied for the purchase of 5 per cent bonds. If the purchase of these bonds should be made out of the advances of the Treasury Department, the present receivership would apparently automatically come to an end. Such action should, of course, be carried out, if possible, with the friendly cooperation of the British and French Governments, and while it might appear to be a harsh measure, yet there are considerations which commend it. It would effectively eliminate the other Governments by merely carrying out the terms of the contract of 1912; it probably would result in less delay than any other method; it would give the United States an entirely free hand in Liberia, which it should have, since it practically guarantees the payments due under the contract of 1912, and since the financial interests of the United States in Liberia will be greater than those of any other country if the $5,000,000 loan is made. If the 5 per cent bonds could be paid up under this plan, then the United States could enter into an arrangement with Liberia without a formal treaty, under something like the procedure set forth in paragraph numbered 4 in Department’s 1722, April 24, without the necessity of obtaining the consent of Great Britain and France.

It is suggested that this telegram be shown to Mr. Worley, who is familiar with the point of view of this Department, and of the Treasury Department, and that he be freely consulted.