882.72/6: Telegram

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

56. Your 72.

Department regrets that there should be a difference of opinion in the understanding on the part of President King of the conversation with Mr. Phillips at the Department in September 1919, but the Department must adhere to its interpretation of the Act of August [Page 127] 7, 1917, which it distinctly understood was agreed to by President King. The Department’s interpretation of this act was only arrived at with the sole view of protecting the interests and welfare of Liberia. President King is evidently laboring under a misapprehension as to the diplomatic custom of submitting written statements of conversations held at foreign offices. While it is true that the conversation between Mr. Phillips and Mr. King was not a formal agreement entered into between the two governments, nevertheless even in informal conversations the assurances given by high government officials are invariably observed.

The Department notes, however, with satisfaction that President King expresses his willingness to endeavor to meet the Department’s interpretation of the said Act in a friendly spirit and his assurances that he will not accord his approval to any applications for concessions until the proposed loan credit of $5,000,000 with the United States is concluded. In addition the Department is gratified to learn of President King’s willingness to withhold his approval from any applications for concessions pending a favorable recommendation thereon from Washington. The Department considers that such a procedure might prove cumbersome and result in unnecessary delays detrimental to the interests of Liberia. Following out the spirit of President King’s proposal, however, the Department suggests that pending future arrangements, whenever the advice of the Financial Adviser on questions concerning the granting of a concession or the extension of a concession should not meet with the approval of the executive or legislative branches of the Liberian Government and agreement cannot be reached, the Liberian Government should submit the matter for arbitral decision to the State Department through the Legation at Monrovia. In this connection, the Government of the United States assures the Liberian Government that such power of arbitration will be exercised consistently with the principle of the open door and not for the extension of special favors to American enterprises.

As regards the French cable concession to construct and operate a telegraph line connecting Liberian towns, the Department feels that the matter should be the subject of a further exchange of views at a subsequent date.

The above telegram was drafted before the receipt of your 82, October 29, 6 p.m.,56 which latter is fully answered herein.

You will communicate the above as soon as possible to the Liberian Government.

Colby
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