The role of the United States in the development of the Republic of Liberia
Authors Freeman, Robert Michael, 1943-
Publisher The University of Arizona.
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Link to Item http://hdl.handle.net/10150/318043 THE ROLE OF THE I3MITED STATES H THE
DEVELOPMENT OF THE REPUBLIC OF LIBERIA
by
Robert ffieliael Freeman
A Thesis Submitted to the Faculty of the
DEPARTMENT OF GOVERNMENT
In Partial Fulfillment of the Requirements For the Degree pf ,
MASTER OF ARTS
In the Graduate College
THE UNIVERSITY OF ARIZONA
19 6 8 STATEMENT BY AUTHOR
This thesis has "been submitted in partial fulfillment of requirements for an, advanced degree at The University of Arizona and is deposited in the University Library to be made available to borrowers under rules of the -Library,
Brief quotations from this thesis are allowable without special permission, provided that accurate acknowledgment of source is made. Requests, for.permission.for extended quotation from or reproduction of. this manuscript in whole.or in part may be granted by the head of the major department or the Dean of the Graduate College when in his judgment the proposed use of the material is in the interests of scholarship. In all other instances, however, permission must be obtained from the author.
SIGNED g Q T ? . /
APPROVAL BY THESIS DIRECTOR
This thesis has been approved on the date shown below
CLIFTON E, WILSON1 ; ; Date ' Professor of Government , ACKNOWLEDGEMENTS
I wish to thank Dr. Clifton E„ Wilson for the helpful guidance which he provided during the preparation of this thesis.
Thanks are due to him also for his patience and cheerful encourage- menf. In addition, I must express my gratitude to my good friend and fellow student, James S. Fleming, whose interest and insightful criticisms were invaluable.. I owe a very special debt of thanks to my wife, Jacque for her help and her tolerance in this effort and throughout the course of my education. TABLE OF COECEHTS,
Page
LIST OF TABLES poodooooooooooooooooooooo, v
ABSTBAGT oooo ooodoeo o ooooooocoooooooo "V3.
CHAPTER
I d INTRODUCTION ooopoo'eodoodddoddo»edd I
2, THE AMERICAN ROLE IN THE ESTABLISHMENT OF THE REPUBLIC OF LIBERIA eood.doi-eddooo oooo.ood-oodo.
3, A CENTURY OF SURVIVAL . , « »..»»»», o,»»« = 20
4, THE UNITED STATES AND LIBERIA AS ALLIES 55
5, THE STRUCTURE OF THE LIBERIAN ECONOMY <* 66
6 , PRIVATE AMERICAN INVESTMENTS IN LIBERIA „ ?6
7, UNITED STATES FOREIGN AID PROGRAMS IN LIBERIA ..... 92
8 . CONCLUSIONS 0 0 .0 0 . O O.OOOOOOOddpOOOO HI
SELECTED BIBLIOGRAPHY .. ..o .o, .,o o,. . . 125
iv LIST OF TABLES
Table Page
I. Productive Acreage Developed, Acreage in Production, and Employment of Various Liberian Rubber 0 one ess rons o o # o @ <* o a o ° » o » o ° @ o o o © © 72
2„ Private Foreign. Investment in Liberia, 1962 © © 78
3„ Investment, Production, Capital Output Ratio, and Employment of Major Liberian Iron Producers « 0 © © 83
4„ Sources and Forms of Foreign Economic Assistance 1 to Liberxa, 1942**19^4 » o & @ © © © © © © © © © = © 108
5© United States Technical Assistance to Liberia by Field of Activity,. Selected. Years . © © ©, , © © © 109
6 , Planned Public Capital Projects in Liberia by
Sector, 1964-1968: O O p 9 O O O' 9 P O O O 0 0 O 9 © © 120
7© Estimation of the Development Gap in Liberia, 1965-1968 00 o o o n o- 0-0 o o 0000 00 o n o©. © 121
v ABSTRACT
The .Republic of Liberia was established with the official
and unofficial assistance of the United States. Since that time,
the United States and Liberia have borne a special relationship to
one another. The special nature of this relationship was evidenced
a number of times in the past century-and a half.
The first century of Liberia's existence saw little progress
toward modernization. The Second World War was the turning point
toward development in Liberia. Substantial progress was made during
the war years in providing the infrastructure necessary as a base
for further development. - In addition, private American investment was attracted to Liberia as the country’s resources became known.
The United States has been financing and participating in
administering an ambitious program of economic development in Liberia
for many years. Yet by any measure, Liberia is still one of the most underdeveloped countries in Africa. In large part, this is due to the
existence of an aristocratic political system in which the Americo-
Liberiah immigrants can effectively prevent the kind'of development
which would result in a challenge to their own hegemony. They have
ranked continued political control as a more desirable goal than
economic development.
vi External assistance can only be a supplement to internal effort on behalf of modernization. It can be optimally effective only to the extent to which it is based on the real political and economic needs of a specific recipient country. CHAPTER 1
INTRODUCTION
The Republic of Liberia gained its independence more than a century before the winds of nationalism began to sweep the continent r- , ■ . of Africa. The United States played a role in the foundation of i " Liberia, and has borne a special relationship to that country ever since. This thesis is essentially a case study of the role of the
United States in the development process of Liberia.
In a very real sense all case studies are examinations of unique phenomena. For this reason, generalizations based on ease studies must be. both cautious and tentative. In the case of the
American-Liberian experience, this caution is even further warranted because the relationship between these countries has been unique in another sense. Liberia is the only country which the United States directly participated in establishing, ## s fact produced a certain sense of special responsibility in the U. S. for Liberia.
On the other hand, Liberia shares with a great number of other countries some common characteristics of ..underdevelopment.
The U. S. has long been involved in attempting to assist Liberia in the process of modernization. It may well be that there are borne factors which a study of the American assistance effort in Liberia ■ will highlight which could he of value in maximizing the effectiveness of such attempts in other underdeveloped countries and in enhancing the prospects of greater progress toward modernization in Liberia.
In this thesis, then, -I will examine in depth the relationship which has developed between the United States and Liberia. It will be necessary to discern the pattern of this relationship in order to accurately assess the relative importance of various factors involved in the progress which has so far been made in Liberia.
Chapter fwo will describe the foundation of Liberia and the role played in this process by the United States both officially and unofficially. This chapter will constitute an.analysis of the U. S. role up to the time of Liberia's independence in 1847.
In Chapter Three, I will describe and explain the position of. the United States toward -Liberia during the century following•its independence and preceeding the Second World War.
Chapter Four will be a brief description of the economic system of Liberia. This will set the stage for the discussion in
Chapter Five of U. S. activities in Liberia during World War II.
These activities were the real turning point in the history of the development of Liberia.
In attempting to evaluate, the contributions made by the
United States to Liberia's development, it is essential to pay care ful consideration to the function of private American investments in
Liberia. This important question will be dealt with in Chapter Six. '• 3
The most direct and most important aspect of America’s concern for Liberian development has been evidenced since the war years in the form of loans and grants to Liberia, Chapter Seven is an- analysis of the U, S, foreign aid program in that country.
This study will attempt to evaluate the degree of success : , \ attained by the Liberian development effort and to assess the importance of the participation of the United States in that effort.
From it may be generated some more general hypotheses requiring further research, - CHAPTER 2
THE AMERICAN ROLE IN THE
ESTABLISHMENT OF THE REPUBLIC OF LIBERIA
During the early years of the nineteenth century, the United
States finally became aware of the need to put an end to the slave trade. In 179^ Congress' had forbidden American citizens to participate in the still flourishing traffic in slaves,1 and in 1808, the further importation of slaves into the U. S. was-- outlawed.2
These actions, however, left unresolved the thorny problem of what was to be done with the freed slaves in the country. Many
Americans followed the example of Washington, who freed his slaves at his death. But the rapidly increasing numbers of former slaves of
African descent did not live on terms of easy equality in the social system of their former masters. By 1816, there were, approximately 1 ' ■ O 2,000,000 Negro slaves and 200,000 former slaves living in the U. S.
1. Harry H. Johnston, Liberia, (London: Hutchinson and Co., 1906), VI, p. 161. , .
2. Nathaniel R. Richardson, Liberia's Past and Present, (London: Diplomatic Press and Publishing Co., 1959)? P« 11. ”
3. Ibid.' There were various schemes proposed to mollify the problem— schemes encompassing such proposals a,s total abolition of slavery and acculturation of the Negroes.into American society with recompense for their previously endured hardships, re-enslaving all those former slaves who had been freed3 freeing.all the slaves and sending them together with their already free brothers back to Africa, and various forms of a proposal to.resettle -the freed Negroes while yet ignoring for a time the larger issue of slavery, as an institution.
In 1815, Captain Paul, Cuffee, a wealthy Negro from Massachusetts outfitted at his own expense an expedition of.about 30 former slaves ' 1 ' 1, to make an attempt at resettlement on the. West African coast. However, it was obvious that individual efforts like this one could not begin to prove adequate to the huge task, ~
At a meeting/held in the Capitol in Washington, D , C, on
December 4, 1816,"Elijah Caldwell and Robert Finley called for.the creation of a Colonization Society,5 As a result of this, first meeting, the American Society for the Colonization of. Free. People of Color in the
United States was formed on January 1, 1817,^ This organization was a
4, ' Lawrence A, Marinelli, The New Liberia, (New York: Praeger, 1964), p, 31*
5, Richardson, op. cit,, p. 17*
, 6 . George W. Brown, The Economic History of Liberia, (Washington: Associated Publishers,' Inc., 1941), p. 9° ~ ~ totally voluntary association of individuals who, however diverse their primary motivations, shared the goal of resettling the free Negroes of the IL Sv in some other place, preferably their native Africa.? The nephew of George Washington, Bushrod Washington was designated as the
Society’s first President, with Robert Finley and Francis Scott Key as ' o Vice-Presidents and Elijah Caldwell as Secretary.
According to the Constitution.of the Colonization Society, it was to concentrate exclusively on the effort "to colonize with their own consent, on the coast of.Africa, or such other place as Congress shall deem expedient, the.people of color in our country, already.free and those others, •who may hereafter be liberated by the.humanity of individuals or the laws of the 1States."9
Early in its existence, the. Society was challenged by many critics who eontended that,it would not be possible to find a suitable location for the proposed colony. In response, agents of the Society were dispatched to the West African coast to try to find a favorable site and quiet the criticism.-*-® Samuel J. Milk, and E. Burgess were assigned the task of reviewing and reporting.on the suitability of several prospective sites.
7. Charles H. Huberich. The Political and Legislative History of Liberia, (Hew York: Central Book'Co., 19^7), I, p. 23. ; . ''v
8 . Richardson, op. cit., p. 17.
9. Article II, Constitution of American Colonization Society, quoted in Brown, CT£. cit., Appendix I, p. 4l3.
10. Brown, Ibid., p. 11. The Society was buoyed by the enthusiastic optimism conveyed
in their report, and proceeded to plan for the establishment of a West
African haven for freed American slaves. Meanwhile, on March 3, 1819
Congress passed a measure which secured the support of the United States
Government in the establishment of Liberia. The law, which was intro duced in the House at the instigation of lobbyists from the American
Colonization Society, declared the slave trade to be piracy and arranged for new cruisers to be employed and bounties to be provided for captured
slavers in an earnest attempt to wipe out the underground slave trade.12
This legislation also authorized the transporting to West Africa of all slaves captured on American vessels engaged in slaving.13 To accomplish this pur pose, the law appropriated $100,000.
President James Monroe, after whom the Liberian capital of = ■ < : : Monrovia was named, sent a special message to Congress on December 19,
1819, in which he interpreted the act to include the authority to estab lish on the African coast some place where these captured slaves could 1 5 be cared for while awaiting their final disposition. Part of the
President’s message stated as follows:
11. Marinelli, op. cit., p. 32. ' .,12= Brown, op. cit., p. 16.
13= Earle R= Anderson, Liberia, America’s African friend, (Chapel Hill: University of North Carolina Press, 1952), p. 65. . ■ ' ' ! ' I Ilf. Benjamin N. Azikiwe, Liberia in World Politics, (London: A. H. Stoekwell, Ltd., 193^), P« 46. ‘ ; ; " , .
15. Anderson, og. cit., p. 65 . 8
On this view'"of the policy and sanctions of the law, it has been decided to send a public ship to the coast of Africa with two (such) .agents, who will take with them topis, and other implements necessary for the-purposes mentioned, They will, also.have the power to select the most suitable place on,the -coast of Africa, at which all persons, who., may be taken under the. Act shall be delivered to them with an express injunction to exercise no power • founded on the principle of colonization or other.power, than that of performing the benevolent offices above recited by the permission and sanction'of the-existing, < government under which they may establish themselves. .
Thus the official assistance of the American Government in the establishment of Liberia was secured, "While President Monroe : . ’ . • ■ ■ • i : specifically disclaimed any semblance of the act of establishing an ‘ . v , M ' . ■ American' colony, it was.clear nevertheless that the United States did play an important, even essential, role in the foundation of
Liberia. The Colonization Society acted in close cooperation with the United States Government in its preparations for the establishment , i ' ■ i - ' » ■ , ' , ' ■ of a settlement in Africa, "The Society suggested the name of the
Reverend. Samuel Baker, an active member of the Society, for the post of Government Agent.The Board bf Managers of the Society appointed , ' ■ . 1 O ' Dr. Samuel A,. Crozier as the Agent of the Society. u Crozier was . - - , issued a.-set of instructions by the Society which indicated in part that he was to:
' l6 . "Documents Relating to the United States and Liberia," American Journal of International Law,,4:sup., (July, 1910), p. 191-192.
17. Richardson, op.. cit., p. 20.
18. Ibid. „ , o advise and act in concert with the United States Agents in selecting a proper.site,for the proposed colony . # „ Hext to the peace, harmony9 and safety of the Colony, as well as .to.insure and promote these,.you will pay particular attention to the .instruction of the * colonists,. . There should not be a single member of the Colony, of proper age, who shall not in a short time be instructed to read, write, and ,in the common rules of arithmetic at least, . Habits of industry should-be partic ularly inculcated, and if necessary.enforced by authority,^
In 1820, the first contingent of eighty-eight Hegroes sailed
for the African coast under the. command of three white. Americans': Bacon ' - ■ 20 -1 , ' ' Cro'zier, and Bankson, This particular expedition was backed by a ; 21 ' ' ; ' ' grant of $33,000 from the Federal Government, The party arrived at ‘ " - ,:Vf . . Sierra Leone, where they found-themselves unwelcome. Thereupon they • '' , ■ " i ^ ■ '• '' • / .< ■ ' moved further down the coast to Sherbro Island, where they attempted
to establish themselves, - However^ they were subsequently struck by
a virulent strain of fever which killed all three,of the leaders of ; ‘ : ■ ' . ' ' 1 "22 ■: - the expedition and twenty-two former ,slaves as well, ^ Following
this disaster, the survivers returned to,.Sierra Leone, 1 ■ • , ' ' The next,year, a relief expedition headed by Samuel Bacon's.. ' ' , , -■ : , - - i ' p. brother Ephraim arrived in Sierra Leone on the U, 8 , brig Nautilus, 0
19. Ibid,
20, Reginald C, P, Maugham, Republic of Liberia, (Hew York: Scribner, 1920), p, 3^» ' / ■ .v ,
■ 21, Mafinelli, op, cit., p. 32.
22, Richardson, op. cit., p. 17.
23. iteugham, op. cit., p. 35. 10
This mission brought a few more Negro colonists, and they were permitted to remain in Sierra Leone until a suitable locality for the settlement could be found. By the end. of 1821 negotiations with the chiefs of the local De’ and Mamba tribes had. succeeded to the point of purchasing a strip of coast land one hundred and thirty, miles long and forty. miles 1 * p k wide and including the Mesurado Promontory, the present site of Monrovia,
The- emigrants took possession of this territory on April 25, 1822,^5
The total value of the goods exchanged with-the chiefs for this territory was about $300, V ’ 1 The initial period of cordiality with the local chieftains .
Peter, Yoda, Long Peter, and George proved to be short-lived. There was an understandable difficulty in communication between Dr, Eli Ayres, . r- the prime negotiator for the Society and the Be* and Mamba..chiefs,^ *' ! . •; ' , ' 1 u - • ' : 1 j ' The concept of land alienation was. totally foreign to the native inhabitants, They resisted fiercely when the newcomers claimed to own the purchased land which the.chiefs -thought they had agreed only to let the colonists live on, - '
i ' . The colonists found it increasingly.difficult to resist the onslaughts of the tribal people, but they, were temporarily rescued ...
24, Johnston, op,, cit,, VI,, p, 128,
25, Huberich, cit,, p, 274,
i ' ■ - 26, Marine Hi, op, cit., p, 33,
27, Richardson, op. cit,, p, 17, 11 from their plight by the arrival on August 8 , 1822 of Jehudi Ashmun, the newly appointed director of ;.the colony» He arrived with 53 new i r ' '' , 28 colonists aboard the American brig Stronga Ashmun proceeded to get the settlement on its feet for the first time. However, native attacks continued until.the arrival in early 1832 of the warship Cyane which carried one hundred more colonists and badly-needed’supplies including . !' 29 • • . 1 six new cannons, ;
Ralph Gurley, another representative of the Colonization
Society, in conjunction with Ashmun drew up a constitution for the settlement and christened it Monrovia and the entire territory Liberia,
The constitution andithe names were ratified.by both the Society and
' the Uo S„ Senate ’ in February of 1825 „ ^ ;
The adoption of this Constitution-and its approval by the
Society marked the beginning of self-government in Liberia and partially limited the powers of the Colonization Society. In summary it provided as follows: ... , . . .
Article T: All persons born within the limits of the territory held by the Society are free and entitled to all the rights and privileges of free people in the United States„
Article II; The Society shall make such rules as they ■' deem fit for the Settlement until it with draws its agents „ ■- ■ . •
28. Marinelli, op. cit., p. 33.
29. Ibid., p. 3^.
30. Ibid. Article III: The Agents of the Society shall decide all questions relative to the government of the settlement and shall exercise judicial power.
Article 17: The Agents shall appoint all officers not designated by the Managers of the Society.
Article 7: Slavery is outlawed.
Article 71: The common law as in force and modified in the United States shall be in force in the Settle ment .
Article 711: Every settler at 21 years of age will take an oath to support the Constitution.
Article 7111: The Agents must inform the Managers of their decisions and the Managers may overrule them.
Article DC: The Constitution is not to interfere with the jurisdiction, rights, and claims,,of the agents of the United States over captured Africans and others under: their care so long as they reside within the.limits of the settlement. ‘ ' ■ ‘ " ' Article X: Amendment of this constitution requires unani mous consent of all present at a regular meeting of the Board of Managers or by a vote of twor- ■ thirds of those present at two successive meetings of the, Board.31
This Constitution was to remain in effect for over twenty years.
When Ashmun had at last attained a relatively stable peace with the surrounding tribesmen, he began to negotiate with other chiefs for more territory. In October of 1825 he secured a tract of land south of Grand Bassa. This area had been the headquarters of the Cuban slave trader Theodore Canot.33 it became clear that Ashmunfs personal
31. Buberich, cjj. cit., p. 1%8.
32. Ibid., p. 155. '
33° Marinelli, o£« cit., p. 34. 13
motivation was not so much to expand, the area of Liberia as to completely
abolish slave trading on the Grain Coast, This endeavor was not viewed
with favor by the Colonization Society, but Asbmun persisted, m.April
of 1826 he bought a strip of land 'completely surrounding the Cape Mount
area., This move struck at the heart of the Spanish slaving operations
on the coast. By October of that year, Liberia had control of the
entire coast between Grand Bassa and Cape Mount, And the territory of
the colony was increased greatly by a deal concluded! in March, 1829 in which King Boatswain ceded to the colony a vast area in the interior.
By this time the total American population of the colony had risen to • 1 34 ' ' ' over 1200.
Until 1831, the American Colonization Society was the only
group actively engaged in resettling freed American slaves. But in
1831 the Maryland Colonization Society was incorporated, and the
Maryland Legislature appropriated $200,000 for it.35 This new group purchased land southwest of Monrovia near Cape Palmas, and with 146
freed slaves established the settlement of Harper. Shortly after
Maryland provided this example, colonization societies were formed
in Hew York, Pennsylvania, Louisiana, Mississippi, and Geprgia.3&
The purposes of the various state societies and the American Coloniza
tion Society were the same, but!relations between them were strained.
34. Johnston, o£. cit,, VI, p. 149» 1 I - 35. Huberich, op. cit., p. 27.
36. Johnston, op>. cit., pp. 154-155. I k
Interdependence among the various settlements, however, was natural i , - ! and necessary. In 1839 the parent societies in the United States decided to join together, and all but Maryland were united into the '' ' ' ‘ ' OV' ’ ' ' Commonwealth of Liberia,^'
Sovereignty remained with the American Colonization Society,
- I , but a new Board of Directors was established for the Society, It
•was composed of delegates from the various state societies together with the former Managers of the parent organization,^ The new Board 1 ' > ■ w , 1 of Directors selected Ihomas Buchanan, a cousin of James Buchanan, as the first President of the Commonwealth,39 Buchanan was also the last chief executive in Liberia who was not at least part Negro, He was succeeded in l84l by Joseph Jenkins Roberts, who later became the first-
President of the Republic. The Constitution of the Commonwealth' followed very closely, the United States Constitution, and was drafted 4l 1 ■ by Professor John Greenleaf of Harvard, The supreme executive power in the Commonwealth remained in the hands of the American Colonization ho ' Society as did the supreme legislative authority. The standard of
'l'\ ' 37« Brown, op. cit., p. 122,
38. Ibid.
390 Ibid.
40. Maugham, og. cit., p. 55»
41. Marinelli, op. cit., p. 36.
42. Brown, og. cit., p. 114, 15 weights and measures was decided in the United States Congress, and the
Commonwealth opted to retain the U. S. monetary system also,^3 Tariffs
on commodities traded between the various colonies were prohibited, as were export taxes.
The salary of the Governor was paid by the Society, while the
salaries of the Lieutenant Governor and all other officers of the Common-
’ ' he , . wealth were paid out of the Public Treasury,. 'v The cost of maintaining ■ i ' the captured Africans taken from slave ships was defrayed by the U, S.
Government,! and ' „ arms and ' munitions ' ' ' were supplied almost entirely by the United States Navy,"^
The Commonwealth continued to grow, even though it was beset by a multitude of problems, - By 1843, the American Negro population in
Liberia was 2,790 including those living in the Maryland colony,^
1845 a series of events ensued which led directly to the achievement of
of independence for Liberia, Both Liberia and Maryland had agreed that ' •• ' i it was to their mutual benefit to implement revenue laws in the hope
of raising sufficient revenue to run the colonies without the financial
>3» Ibid,, p, 122,
44, Ibid,, p, 123«
45, Huberich, op_„ cit,, I, p. 819°
46, Ibid,
47, Johnston, ojd, cit., VI, p, 191° 16 iiQ support of the Societies, Although the.American Colonization
Society had the sole power to create., regulate, or -proscribe a monied L.Q currency within the Commonwealth, its Board agreed with Governor
Roberts that the imposition of a 6 per cent ad valorem import duty was in order,The colony of Maryland in Liberia agreed that a common policy of customs tariffs would best serve the interests of both col onies, and accordingly set the same 6 per cent import duty.
The British refused to pay the tax, "or to recognize the com petence of the commercial experiment of a philanthropic society to i ' . > 1 | exercise the sovereigh rights implied by the■levy of duties of any . . 52. - i kind," Liberia impounded a ship belonging to a Sierra Leonean for non-payment of duties, and the British responded by sailing a warship into the port at Grand Bassa and seizing a Liberian-owned freighter
The' Colonization Society appealed to the United States Government for advice. The response was that this Government stipulated quite clearly ' ■ - ' ' ■ ■ that it had no intention of presuming to settle differences arising between Liberian and British subjects, the Liberians being responsible for their own acts, .
48, Brown, oj). eit,, p. 127.
49- Huberich, og. cit., II, p. 1499.
50, Marinelli, op, cit,, p, 37«
51. Maugham, og, cit,, p. 58.
52, Marinelli, op. cit,, p. 37.
53. Johnston, og. cit., VI, p. 194, Up until this time Liberia possessed all of.the elements of
statehood except sovereignty, which remained vested in the Colonization
Society, According to B, IT, Azikiwe, Liberia attempted to induce the
U. S, to formally annex, her as a colony or a protectorate, but failed
in this effort because of the U. S, policy of refraining from assuming
exclusive responsibilities in Africa,
As a matter of course the United. States Government, requested
an explanation of British actions from that government. The. explanation was simply that Great Britain could not accept a private commercial
enterprise as a sovereign government. The U, S. maintained its aversion
to the responsibilities of becoming a.mother country, and so independence ' 55 seemed to be. the only solution.
Accordingly, in January, 1846, the Board of Directors of the
Society resolved that "The time had arrived when it was expedient for
the people of'the Commonwealth of Liberia to take into their own hands
the whole work of self-government, including the management of all
their foreign relations,
Both Maryland and Liberia considered the matter of independence ' t. ■ ■ . and all it involved. On October 7, 1846 Governor Roberts submitted a
54. Azikiwe, op, cit., p. 60.
55. Marinelli, op. cit., p. 37.
56. J. H. T. McPherson, A' History of Liberia, (Baltimore: Johns Hopkins Press, 1891), p. 26. proposal to declare Liberia’s independence to the Colonial Council,
It was adopted by a large majority,5? Independence was declared by the fledgling Republic of Liberia on July 26, 1847,^ A Constitution was adopted which was almost identical to that of the United States,
Earlier, on May 8 , 1847> the settlers of Maryland had voted to pursue independence for their settlementHowever, in 1857, when after three years of independence Maryland was "on the brink of economic and political collapse because of an outbreak of hostilities with the natives, (she) appealed to the Republic of Liberia to admit it as an 60 . • integral part," This former state has since then been Maryland
County, Republic of Liberia,
The Republic was accorded diplomatic recognition by Britain 61 . ' almost immediately. This act of recognition was followed in order by France, Lubeck, Bremen, Hamburg, Belgium, and Denmark, ^ Iron-
; ' - ' ' ' ically, in view of the American role in the conception and birth of
Liberia, the U, 8, delayed extending recognition. While in the early years of the Republic, the U, 8, continued supplying Liberia with
57, Brown, eg, cit,, p, 130,
58, Azikiwe, o^, cit,, p, 6l,
59, Marinelli, a ^ o cit,, p. 37.
60, Ibid,a p. 38,
61, Raymond L, Buell, Liberia: A Century of Survival, (Philadelphia: University of Pennsylvania Press, 1947), P. 708, 19 financial and military aid, it hesitated to establish a formal relation ship presumably because it would have been highly embarrassing for the
United States in the tense years immediately peeeMlhg Ithd^Givil Wdr to receive Negro diplomatic envoys from an independent Negro republic
At any rate, formal U„ S„ recognition was withheld until June 5 , 1862, two years after the Civil War had ruptured American society.
63. Brown, cp. cit., p. 132.
64. Azikiwe, cit., p. 69 . CHAPTER 3
A CENTURY OF SURVIVAL1
During the early years of Liberia's existence 'as an independent republic, the United States on several occasions came to Liberia’s aid, even though no formal diplomatic ties existed between the two nations.
In 1852, the U. S. Cruiser John Adams was dispatched to Liberia to assist in the quelling of a native uprising in Grand Bassa "in such measures as might be deemed necessary to establish full.confidence in the minds of the settlers in their security by assurance of pro tection to them by the naval forces of the United States when their situation needs it."
In 1858 a fresh outbreak of slave trading was met by a vigorous U. S. reassertion of its opposition in the form of renewed efforts to stop it. In a period of sixty days 1,532 captured Africans 3 were landed at the Federal,Depot in Key West.
1. A book by the same title was published by Raymond L. Buell in 19^7. . It contains one of the most comprehensive accounts available of this period of trial. Raymond L. Buell, op. cit.
2. Brown, o]3. cit., p. 132.
3. Ibid., p. 135.
20 Under the terms of the Act of 1819 the President was empowered to negotiate a five-year contract with any group to receive and care for these people in Africa. Congress appropriated a sum sufficient to provide $100 per year for each of these Africans resettled on the
African coasts and directed that whenever possible the commanders of United States cruisers were to land these captured slaves directly 4 on the African west coast, i . : During the Civil War migration to Liberia was almost com pletely stopped, and following the War never resumed at nearly the ante-bellum rate. Liberia recognized the need for additional farm workers. The Government of the Republic appropriated $4000 and the
American Colonization Society contributed $10,000 and an experienced agent'to aid in the importation of Negro farm workers from the
Barbadoes. Liberia granted them 10 to 25 acres of land per family.
During the entire first decade of the Republic, the Colo nization Society continued to give support of inestimable value to the efforts of Liberia to attract settlers. Nearly $1 million was 6 spent by the Society in aiding the passage of some 5,000 emigrants.
By the time that the Society celebrated its semi-centennial in 1867, 7 it had expended $2,558,907« This figure does not include the money
4. Ibid., p. 138. '
5. Ibid., p. 136.
6. Brown, op, cit. p. 133. 22 spent by the other colonization societies before their merger nor that spent by the United. States Government». '
The Liberian immigrants brought with them a vision of a social system which they had seen in the American South, and they intended to reproduce that system with themselves as the wealthy landholding class and the indigenous natives who occupied Liberia prior to their
coming assuming the. role of the dominated class that they themselves had played in the United States, They were, as a result of their experience in America, alien to the native population, sharing only the non-unifying characteristic of similar skin pigmentation. They brought
"a western name for their country, a western form of land domination, western political and juridicial control, western language and education, western social and religious ethics-y and western methods of employment in agriculture, commerce, and industry. They established an economic system that overlooked the proper development of abundant natural resources, and they failed to establish and develop the industries which pertained to these resources. The attempt of about one per cent.of the population to control the destiny of the Republic without regard for the social and cultural outlook of the natives produced difficulties
8, Abayomi Karnga, History of Liberia (Liverpool: D. H. Tyte and Co., 1926), p. 69 . / . 23 which have plagued the Republic and hindered its development down - to the present day. In the short run, the attempt to establish a system of agricultural capitalism in the form of the plantation South with the attendant problems of an unbalanced economy and the de pendence of trade and commerce on foreign demand resulted in the near paralysis of the Liberian economy. As the economic historian of
Liberia, George W. Brown, put it, the leaders of Liberia failed miserably "to understand the psychology of the changing western capitalism" in their preference for continued exploitation of the natives rather than accepting the "European tenets of continuous work 9 and the social habits of self-support." Year by year, as the prices brought by agricultural commodities, especially coffee, on the world market declined, Liberia became more and more dependent upon outside support for its faltering economy. A social system was ordained that could only be characterized as a blatant form of aristocracy. Initially the indigenous people of Liberia played no part in the management of the affairs of the Republic. They were completely disenfranchised and politically impotent. This pattern of social organization in which one small and distinguishable group of people, the immigrants or Americo-Liberians as they have come to be called, exercise a
9. Brown, bp, cit., pi, iko. 2b socials cultural,.military, and economic dominationover another identifiable group of people, the "uncivilized" natives of the 10 interior persists to the present day.
Liberia’s economic posture accordingly continued to decline, and its Government was increasingly forced to look outward for support.
President Edward James Roye, who took office in 1870, decided that
Liberia, "now an independent State of twenty years existence . . . should imitate all the other independent States of the world and have a loan and a public debt." In 1871 Roye negotiated a loan in
London of $500,000 for the financial rehabilitation of the country.
The loan was floated at the usurious rate of seven per cent interest plus thirty per cent discount, and the payment of. one-fifth of the loan for interest charges had to be made in advance. In addition, a lien was placed upon the customs revenue of the Republic as a guarantee 12 of payment. Liberia was given fifteen years to repay the remainder of the debt.13
10. Probably the best description of the existing social and political systems in Liberia has been provided by J. Gus Liebenow in his. chapters on Liberia in African- One Party States (edited by Gwendolen Carter) and in Political Parties and National Integration in Tropical Africa(edited by James S. Coleman and Carl G. Rosburg). The problem and obstacles'presentedto development bythis social and political pattern will be discussed in a subsequent chapter.
11. Johnston, op. cit., p. 258.
12. Azikiwe, op. cit.,p. 112.
13. Richardson, eg. cit., p. 106. 25
There are at least three versions of the extent to which
Liberia was taken in by this deal. According to Ndami Azikiwe 14 "the Republic received about $200,000 nominally" 0:£> $500,000 15 borrowed. Brawley and Westerman place the figure at about $135?000.
And George Brown wrote that, "The Republic received only $350,000 of the principal sum of $500,000.""**^
Roye not only accepted the loan under these conditions without the consent of the Legislature, but he allowed the funds that were received to be expended in such a way as to incriminate himself to the point of facing charges for misappropriation of public funds.
The Liberian people were incensed. Roye, upon his arrival in Monrovia, became very concerned about his chances in the upcoming election, andv announced that he would succeed himself automatically for another two years. This was too much. Roye was forcibly deposed. The night before he was to be tried by the Supreme Court, he escaped, but drowned in the attempt to cross the breakers in a dugout to get to an English 17 ship.
This fiasco seriously damaged the Liberian economy for a number of years. While the Republic gained very little benefit from
14. Azikiwe, loc. cit.
15- Ibid.
1 6 . Brown, op. cit., p. 143.
17. Richardson, op. cit,, pp. 106-107. 26 the loan, it still had to be paid back, and a wave of depression resulted. The financial position of the Republic was worse than before the loan was received, since borrowing money was a poor sub stitute for productive industry. In 187b, the Government defaulted in its interest payments and hegan to negotiate for readjustments of 18 oc ' the terms. In 1880 six per cent domestic bonds were issued by the
Legislature to replace the fast depreciating•paper currency, "In
1893 the internal debt was larger and the national receipts had sunk far below an amount sufficient to carry Ion the.administrative functions 19 and to meet the interest on the 1871 loan," In 1898, after almost
30 years'of involved negotiation, the Republic agreed to a new set of terms of the lean, this time at an interest rate of about 5 per cent. But by 1904, Liberia’s public debt was over $800,000, and 20 more than half of this money was still due on the 1871 loan.
There were more than financial problems plaguing the young
Republic, however. Serious threats to the sovereignty and territory of Liberia came in the form of border disputes with British and French possessions. The European colonial powers were sorely vexed by the existence of a Negro republic in the midst of their colonies. Although it was to be nearly a century until the winds of nationalism were
18. Azikiwe, op, cit., p. 113.
1 9 . Brown, op. cit., p. 144.
20. Ibid. to blow across, the African continent, already England and France could be made to feel uneasy by the very existence of Liberia.
The French began to be desirous of an African empire. Thus,
"They dug up vague historial evidence supporting their claim to almost all of the Liberian coast and large tracts in the hinterland. In fact, they went so far as to announce their intention of declaring
• 21 Liberia a protectorate. This intention might will have.succeeded but for an unofficial protest by the United States Government to 22 France in 1887= The American Secretary of State, Thomas F. Bayard wrote that, "...this Government regards it (Liberia) as occupying a peculiar position and as possessing peculiar claims to friendly con sideration. . .and that it (the U. S. Government) would be very unwilling 23 to see it (Liberia) despoiled.”
Still France contended that the boundary of her colony of the Ivory Coast extended thirty miles west of the Cavalla Fiver to
Cape Palmas. At this time the Liberians claimed territory extending to sixty miles east of the Cavalla. France rejected arbitration, and incorporated the area between the San Pedro and Cavalla Elvers, pre senting the powerless Republic with a fait accompli. On December 2,
21. Marieelli, op., cit., p. 4l.
22. Anderson, op. cit., p. 89.
23. D. F. McCall, "Liberia; An Appraisal," Annals of the ■ American Academy of Political and Social Science, VdL 306 (July, 1965), P. 91.. ' 28
18925 Liberia agreed to the Cavalla as a boundary in a treaty m t h ' . ' ' '' ' 2 h ■ France > which included a French indemnity payment of 25s000 francs.
This usurpation cost the Republic of Liberia only slightly less than 25 half of, its territory.
Another unfortunate result of the debacle of the Roye loan qf 1871 concerned the settling of the long-standing border dispute between Liberia and the British colony of Sierra Leone. While.Roye was in London to procure the loan, the British offered to settle the dispute by recognizing the Sherbro liver as the border. Rqye accepted this proposal, but-upon his removal from office, his successor felt obligated to reject it because it was Roye who had approved it.
Had this plan been accepted, Liberia would have had to cede only.. 26 one-tenth of the land it eventually lost to Sierra Leone.
In 1880, United States Secretary of State W. M. Evarts ■' ' ; notified the British Government of American interest in the welfare and security of Liberia. This note was followed, by another re asserting the same theme sent by Secretary of State F. T. Frelinghuysen 07 in 1884. The event-which precipitated the latter notice was the seizure in March, 1883 by Britain of the Liberian territory up to the
Mano River. The U, S. felt obligated to do no more, however, than
24. Brown, op. cit.,.p. 162.
25. Marinelli, loo, cit.
2 6 . Ibid., p. 40.
27. Anderson, op. cit., p. 86 . 29 express concern over the encroachment. And the Liberian Government, powerless to resist the British without something more substantial in backing by the United States than its moral support, was forced to settle on British terms. On Movember 11, 1885, Liberia accepted the Mano River as the boundary "in return for a guarantee against further encroachments and a reimbursement of some $.5000 for the amount paid in the original purchases dating hack to Liberia's founding; • 28 virtually an admission of the illegitimacy.of British claims."
For the more than thirty years which it took to repay the . loan of 187I, no other Liberian President seriously considered securing another foreign loan.1 But by the time of the Administration of
President Arthur Barclay in 1904, the theme of internal development had become both a political and an economic slogan. It was really little more than a slogan, however, and Barclay was compelled by outstanding debts rather than by any ambitious internal development plans to seek a hew loan. In 1905 the Liberian Legislature authorized
Barclay to negotiate a loan of $200$000 for the immediate relief of the floating debt of the country. In another act it authorized the
Secretary „of the Treasury to arrange a $2,000,000 five per cent loan in the United States. The proceeds from this loan were to be used to liquidate all other indebtedness and to begin some internal develop- 29 ment work.
28 . Marinelli, loc. cit.
29. Buell, op. cit., pp. 798-799. 30
Unable to secure such loans in the W„ S., Liberia'was once
again forced to turn to Great Britain for assistance. The Loan was
negotiated through Sir Harry Johnston on behalf of the Liberian
Development Companys a British company interested in the natural
resources of Liberia, especially rubber. . The Liberian Government
entered into a partnership with the Liberian Development Company for ' 20 the financing of a loan of $500,000 at six per cent interest.
The proceeds of the loan were to be used.as. follows:
$125,000 to be expended in the payment of domestic debts; $25,000 ■ - ■ ■ , ?. for other pressing Liberian obligations; $35j000 to be:loaned to the
Liberian Development Company; and the remainder to be devoted to
the development of banking and to the execution of road plans advocated 31 by Johnston.
, 1 * As; security for the loan, two Englishmen chosen by the
British Government, were to have control over the Republic's customs
revenue. Interest payments of $30,000 per year were required until the loan was liquidated. In addition to the $35,000 loaned to
Johnston’s company, it was to receive ten per cent of any excess over
$200,000 in customs revenue per year, as well as the anticipated profits 32 from its road building activities.
30. Ibid., p. 799«
31. Brown, op. cit., p. 165.
32. Ibid. The loan was actually advanced by the Erlanger Company of 33 • ■ ' London. The proceeds of the loan were actually distributed as follows: $150,000 on the domestic debt; $35»000 to the Development
Company as a loan; and $162,882 for developing roads under the 1 supervision and control of Johnston's company. Altogether about
$200,000 passed into the hands of the Liberian Development Company.
In return for this rather handsome sum the company "constructed fifteen miles of automobile road in the Careysburg district, placed a small launch on the St. Paul River, and purchased two automobiles. ■ 35 " The company then announced that its funds were exhausted." •
President Barclay revealed that Johnston had proposed that
Liberia buy out the Company for $500,000. This proposal was quite indignantly rejected, and it was further revealed that the Company declined to show its records indicating how it had spent the $200,000.'
In an effort to find the best way out of a very unpleasant situation, the Liberian Government negotiated an agreement in 1908 with the; Erlanger . Company, and the Liberia Development Company in which the unused $150,000 was returned to the Government. Thereupon all connections with the Development Company were severed, and Liberia
( 33. Azikiwe, op. cit., p. 113.
34. Brown, op. cit., p. 166. . became directly responsible to the Erlanger Company for repayment 37 of the debt.
Thus once1 again Liberia suffered badly in an attempt to - ' ! ' . . . deal with foreign money lenders.: Nothing.was accomplished for !: - Liberia in the way of development on this occasion except the con- 1 : v . ; •, ' • ' • . struction of fifteen miles of dirt road which had only the two cars purchased by Johnston to use it. However9 as an indirect result of this second failing financidl venture, stronger ties of cooperation in the solving of Liberia’s problems were to develop between the
Republic and the United states.
Later in the same year, a Liberian Commission visited the
United States to seek financial and material aid from Washington to help alleviate both the' fiscal arid boundary problems still facing the Republic.
In11909 a U. S. Commission headed by Emmet J. Scott was 38 sent to Liberia to investigate these problems. The Commission’s
recommendations were that the United States:
1. Extend its aid to Liberia in the prompt settlement of pending boundary disputes;
2. Enable the Republic to refupd its debt by assuming as .a guarantee for the payment of the obligations under such arrangement the control arid collection of the Liberian customs;
37. Ibid, ,' p. 800.
38. Azikiwe, op. cit., p. Il6 . 33 '
3. Lend its assistance to the Republic in;the reform of its internal finances;
4. Render aid to. Liberia in organizing and drilling an adequate constabulary or frontier police force;
5. .Establish and maintain a research station in the country for scientific study of the resources of the Republic ;•
6 . Reopen the question of establishing a naval coaling station in Liberia.39
Three of these recommendations were carried out quickly, and others only in the long run. In 1908 the- Liberian Legislature fired(%»taim R. Maeay Qadell as Pommandant of the Frontier Force.
In response to the recommendations of the Scott Commission, a team of three American Army officers w^s dispatched to Monrovia to provide ' ■ ' RO' the technical assistance to1.build an efficient Frontier Force. '
Colonel Charles B. Young, a Negro, was detailed as Military Attache" at Monrovia. Under his guidance the other two officers, also Negroes, proceeded to reorganize the Frontier Force. Another group of Americans, this one all-white, assisted the Liberians in the reorganization of ; ' , 4l the Republic’s finances and helped to consolidate the public debt.
At the time when the Scott Commission studied the Liberian problems, the Republic was nearly $1.3 million in debt. The loan of 1871 was still outstanding at $443,025, and $464,640 was Still 42 owed on the 19Q6 loan.
39v Ibid., p. 117.
40. Anderson, op. cit., p. 88 .
41. Brown, op. cit., p. 168.
42. Ibid., p. 169. As another outgrowth of Scott's report a loan of $1,700,000 was arranged in the United States. Perhaps the U. 8 . did feel an inordinate obligation to come to the aid of Liberia on this oecasion-- not only because of the American.responsibility for the existence of the Republic and the seriously detrimental implications of our having failed to assist in the budgetary crises of 1871 and 1906 and our standing by while Liberia was whittled.down to one-fourth of her original size by her. neighbors, but also because since May, 1910,
Liberian goods had not been admitted by the United States under its 1 2*3 minimum tariff. This surely was hot the course of action of a mother country trying to establish a flourishing colony, but it may well have been the action of a country bending over so farbackward to avoid the appellation of ’colonialist'as to fail to meet those minimum moral obligations which we did have toward Liberia. ■
At any rate, a loan of $1.7 million was arranged, the major ■■ part of which was to be used to pay off the .existing debt of $1.3 million.
The loan came from a group of international bankers, but was arranged
"thr'pugh the good, offices of the United States. Government."
Liberia issued five per cent bonds to mature in forty years.
$265,000 went to German creditors, $715s000 to.loan creditors and
43. Raymond Bixler, America's Foreign Policy in Liberia, (Hew York: Pageant Press, 1957)? p. 118. "
44. Brown, op. cit., p. 169. businesses in London3 $460,,000 to Amsterdam creditors, and $158,000 • ' 45 ' : i to lenders in New York.
The loan agreement contained the provision that four,for eigners were to control the finances of the country. The general receiver was appointed by the United States Government and was to have one assistant from Britain, one from Germany, and one from 46 , - ' \ . France. lot only did the! sovereign state of Liberia have to accept this foreign control over its finances, but it had to pay each of the four a salary of $12,500 per year.^
‘ - ' "i ' i The receivership was empowered to collect and administer the revenues without any intervention of any Liberian official. The
Liberian Constitution stipulates that a bill becomes a law when it has passid.b'oth Houses of Congress and been sig&ed by the President.
However, during the period of receivership, no appropriations measure arising in the House of Representatives which was approved, by both
Houses and signed by the President became law until it was certified ' . • . : ■ 48 by the receivership as coming within the budgeted appropriations.
In spite of the infringements upon Liberian sovereignty resultant from this loan agreement "The loan saved the government
, 45. Ibid., p. 170
46. Marihelli, op. cit., p. 43.
4?. Brown, op. cit., p. 1701
,48. Ibid. from bankruptcy, and at_„the time Liberian officials heralded it as the prime factor, in preventing the nation’s annexation by one of its 49 ' - ' powerful, colonial neighbors, • However, judgments made by Liberians at a later time took a somewhat, different position. E.J. Yancy wrote in i960 that as a result of the loan: "Liberia for many years was under an American receivership with white officials at thehhead of its financial institutions. These officials drew high salaries which were incompatible with the wage scale of the country and far beyond the capacity of the receipts and revenues of the country.
And A. Doris Banks Henries, the wife of the present Speaker of the
House and the nearest thing to an official Liberian historian has written: "Liberia once more was in the clutches of foreign powers.
This loan was not advantageous to Liberia because much of the money went for salaries of officials from foreign countries.and/the rate 51 of interest was exorbitant.
Probably these latter judgments are more accurate. It was undoubtedly too easy to sing the praises of the loam agreement at . . ■ the time of'its negotiation in view of the desperate financial straits in which the Republic found herself. This loan was undoubtedly more favorable to Liberia than the earlier two had been, nevertheless.
49 . Marinelli, loc. cit.
50. E.J. Yancy, The Republic of Liberia (London: Alien and Unwin, i960), p. 110. .
' -1 ' - 51. A. Doris Banks Henries, The Liberian Ration: A Short History (New York:' Knopf, 1962), p. 112. : . the interest and sinking fond payments' on the loan together with the salaries-paid to.the agents of the receivership amounted to $149,500 ' ’ 52 per year, leaving very little for productive purposes. Liberia might have had cause to expect somewhat ..more generous terms than these from the United States. By any measure, the virtual sacrifice of complete control over the monetary affairs of the Republic was a high price to pay. • It is, of course, undeniable that Liberia had previously exhibited, a highly developed talent for gross mismanagement
Still, a receivership must be a bitter pill indeed for a sovereign nation to swallow. Yet it is altogether too easy to suggest that the United States might have accomplished, the goal of fiscal reform simply by supplying Liberia with some competent advisors and a sub- - stantial grant rather than a loan. In the first place, this was not ■> the era of foreign aid, and to have expected it of the U. S. is simply unrealistic. Also-the Liberians of Amerieo-Liberian descent had shown themselves.to be almost singularly incapable of accepting advice. They have been traditionally inhospitable about receiving constructive criticism. Furthermore, the basic problem which was at the very heart of the Republic’s monetary difficulties was fhe con tinued, and still continuing, attempt on the part of the Amerieo-
Liberian oligarchy to dominate, the affairs of the Republic without regard either to the best interests of the majority of Liberian citizens or to the exigencies of the development of the resources of
52,. Brown, loo, cit. the Republic. This pattern of domination is, and has been since the establishment of the Republic, conductive to stagnation rather than development. And on this highly.sensitive issue the Liberian officials would certainly have been still less receptive to con structive suggestions, even if .agents of the United States had been aware of the need for progress in this social area and ready to make appropriate suggestions.
Because of this unfortunate combination of circumstances, there is really little to criticize in the loan agreement which was worked out. But. again, it was the tribal majority in Liberia which suffered most because the funds necessary for the construction of roads, industries, schools, and hospitals were not available, and the real tasks of development could not yet begin.
Liberia began operating under the terms of the agreement and making regular payments until the cataclysm of World War I. The war dissolved the alliance of powers which had been supervising Liberian revenues. The income of the Liberian Government had been derived' ! ; i . , i almost entirely, however, from taxes on imports, and more than half -• ' . _ . ' 53 of the country's foreign trade had been carried on with Germany.
When the Allied blockade virtually teminated German sea commerce, the revenues resulting from import taxes declined drastically.
Liberia wanted to remain neutral, because she felt too weak to become involved and also because'she was very busy putting down
53. Bixler, op. cit., p. 118. 39
' 54 • a disturbance of the K m tribe along the coast, Howevers when the United States declared war on Germany, this country "urged her
'step-child*, Liberia, to enter the conflict bn the side of the
Allies."55
Somewhat reluctantly, Liberia yielded. President Howard published a statement on June 1, .1917, severing her diplomatic I 56 relations 'with Germany, England and prance seemed to want Liberia to align herself'against Germany primarily so that they could annex 57 the German cable station there.
By 1917? Liberia’s aggregate income was not sufficient even to maintain interests payments on the loan, and the United States 58 suggested a series of internal fiscal reforms.■ Some of these reforms were carried out, and in January, 1918, the Liberian Govern ment sent a memorandum to the U. S. Government stating that the situation in Liberia was so serious as to warrant a candid appeal for
$5-million. This money was to be used to cancel the 1912 loan and to establish a completely American receivership, ~
54. Richard and Doris Henri.es, Liberia. The West African Republic (Hew York: Herman Jaffe, 1954), p. 57-
55. Ibid.
56. Huberich, op. cit., II, 1176.
57. Azikiwe, op. cit., %), 119*
58. According to Buell, the reforms consistedessentially of combining the War and Interior Departments, establishing an auditor, reducing the salaries of the members of the Legislature to a maximum of $500 per year, and reforming the militia, the PostOffice Department, and finances generally. Buell, op. cit., p. .811. . . 1 ' ■ ' ' ' ' Under the authority of the Second Liberty Loan Act of 1917?
President Wilson directed the Treasury to establish a $$ million
> ' 5 9 credit for Liberia, The loan was conditional on the carrying out
of farther reforms. In November? 1918? the State Department notified
France and Britain of the establishment of the credit and of our
intention to convert the 1912 loan and its administration into, an , ■■ ' ■ V '■ ' ■' * exclusively American receivership which would control internal as 60 .well as external revenue.
In January? 1919? $12?000 was advanced to Liberia? and sub
sequently another $26?000 was advanced to -pay the expenses of the . . . ' 61 Liberian delegation to the Paris Peace Conference. In Paris
discussions continued relative to the terms under which the rest of
the $5 million would be loaned.
The terms agreed upon in Paris were that Liberia would have
to carry.out further reforms and that American citizens would act as
Commissioners "to establish and maintain a just arid equitable ad-
. ' ' ' "• . 62 - ministration of the hinterland and to preserve order therein,".. On
Jurie 15? 1920? an agreement was signed providing for a five per cent
loan under,these terms. The United States also agreed to advance an.
59., Azikiwe? op. cit. ? p. 121,
6 0 . Buell? op. cit.? p. 812. -
61. Bixler? op, cit.? p. %3.
62. Buell? loc. pit. hi amount necessary to meet the regular administrative expenses of the
Liberian Government for the next five years, not to exceed $400,000 annually.n 63
The Liberian Government had to agree to place not only their customs, but their internal revenue as well, under the complete control of a General Receiver assisted by three Receivers and an Auditor,
•j ' ' all of whom were to be appointed by the Liberian president but at the suggestion of the President of the Gmited StatesTo govern the. tribes of the interior, there was to be a Commissioner General of the
Interior, four or more District Commissioners, and three or more military officers» In all this would be a total of at least thirteen
American officials who would combine to govern, the Republic,
This arrangement was,accepted by President Wilson, but it was received with much disfavor in Monrovia where many Liberians were quite apprehensive about complete American control over their country.
C.D.B. King, the Liberian Secretary of State who had signed the agree ment in Paris, claimed he had been deceived by it when he returned to
Monrovia. The Liberian Legislature in August of 1920 declined to 66 accept the loan, but authorized the continuation of negotiations. ,
6 3 . Ibid.
64. Bixler, op. cit., p. 44.
6 5 . Buell, op. cit., p. 813.
6 6 . Ibid., 42
Meanwhile King was elected President of the Republic and was authorized to proceed to Washington to conclude negotiations. The state of war with Germany ended on July 2? 1921. King, did not arrive in Washington until March 6 , after Harding8 s inauguration. When the end of the state of war ended the President’s, war powers, it became necessary for him to secure the consent of Congress for any loanL
Actually, the agreement reached in Washington was more severe on the Liberian Government than the one King accepted earlier. : The number of American officials to be sent to Liberia was raised from thirteen to twenty-two. Also, "The charge on the Liberian budget for total salaries would have been $109,700 a year, exclusive of travelling expenses. This sum, together with the $250,000 annual interest on a loan of $5 million would have nearly equalled the whole ' 67 customs returns of Liberia in 1923."
King and his party accepted this arrangement, however', and returned to Monrovia. There developed among the people bitter op position to an agreement which they viewed as bringing with it the end of their independence. Nevertheless, the Liberian Legislature ratified the agreement in desperation in January, 1922.
The loan was approved in the United States House of Re presentatives, but ran into trouble in the Senate. A disagreement between the State Department1 and the; Treasury Department, which wanted
6 7 . Ibid., p. 815. ' 43 to loan only $2 ,000,000 came to light in an embarrassing fashion.
State argued that we had already assured Britain and France that we intended to carry out an American program in Liberia based upon the
$5,000,000 loan. As Bixler said in paraphrase of the Secretary of
State, "The United States was committed to, Liberia, and failure would be disastrous to our position and a blemish on our good name 1 68 in international,relations." This was substantially the same Senate which defeated the entry of the U. S. into the League of nations, so it is doubtful that,:such an argument carried much weight.
At any rate, the Senate eventually defeated the loan proposal. ' . r One Liberian historian, Nathaniel R. Richardson, called this, failure of ratification 'unfortunate* But M a m i Azikiwe^ and Raymond Buell^ both wrote that it was best for Liberia's interest that it was de feated, and that the defeat met generally with rejoicing in Liberia.
The United States Senate, thus, wittingly or not, saved
Liberia from American control. But many observers noted that our previous reluctance to assume unilateral responsibilities in Africa, or to take .any action; which might seem to east the U. S. in the role of a colonial power had long since disappeared.
Liberia’s economic posture was thus still in a state of disarray, . but a policy pursued by the British was to have profound repercussions
6 8 . Bixler, op. cit., p. 45.
69 . Richardson, op. cit., p. 136.
70. Azikiwe, op. cit., p. 122.
7 1 . Buell, op. cit., p. 8l6 . 44
on Liberia’s economy. Winston Churchill conceived a plan which would
enable the British rubber industry to pay off Britain’s war debt to
the U. S. The British held a virtual monopoly on the world’s crude
rubber production, and the-United States consumed over one-half of 72 ' ' . all produced. The Stevenson Restriction Act was passed by Parliament
in November, 1922, and its purpose was to increase the price of rubber
on the world market. Almost immediately the price of rubber increased
from fourteen cents to $1.23 per pound. The added cost to American " 73 consumers was more than $250 million per year.
Until this time American interest in the natural resources of Liberia had been peripheral. American capital was busy in other areas. Harvey 8 . Firestone had attempted to break the cartel by
setting up large-scale rubber plantation operations in both Mexico
and the Philippines, and both of these endeavors failed. Then in
1923, he sent a team of experts to Liberia to investigate the pos- 74 sibilities of growing rubber there. This investigatory team found the climatic and soil conditions in Liberia almost ideal for rubber
cultivation..
72. Bixler, op. cit., p. 6l.
73• Marinelli, op. cit., p. 45.
74. The Firestone story in Liberia, which will be only briefly recounted here, was told in full by Wayne C. Taylor in The Firestone Operations in Liberia, (Washington: National Planning Association, 1956). In 1924, President King concluded an agreement with Firestone
which "broke down the barriers that had kept foreign capital out of 75 Liberia." Then in November, 1926, Firestone was given a ninety-nine year lease on one million acres of land in Liberia at an annual rent
of 60 per acre. In addition Liberia was to receive from Firestone an 76 export allowance equal to one per cent of the world market price.'
Firestone was allowed to build all the roads, bridges, and railroads 1 ■ . . ' 1 ' 77 necessary for their operation, but were required to use local labor. ■
Another part of the .agreement between Liberia and Firestone stipulated
that within five years modern harbor facilities would be constructed at
Monrovia by Firestone subsidiaries at a cost of $300,000 plus six per 78 cent interest.
Following the final approval of the plantation agreement, the
Liberian government negotiated a new loan with the Finance Company of
America, a wholly owned Firestone subsidiary, set up specifically for
this purpose. The. loan of $$ million was financed through the National
City Bank of New York, and Liberia's economic destiny became more ■ 79 closely, than ever connected to the United States.
" 7 5 Anderson, op. eft., p. 6 .
7 6 . Marinelli.,. op. cit., p. 46. . .
77- Brown, op. cit., p. 194,
7 8 . Ibid.
79- Bixler, op.-cit., p. 6 3 . 46
President King began making use of the new loan in con
struction projects involving highways, hospitals, lighthouses, and a • 80 radio station. Although, the interest rate on the $5 million loan
was set at seven per cent, the agreement with Firestone marked a turning 81 point in the economic development of Liberia, As R. Earle Anderson,
put it, "The economy of the country began to undergo a basic change.
Actual money wages, at first;a trickle and then an increasing stream,
found their way into the hands of native labor, recruited largely from
the interior,. A mere subsistence economy began to give way to a
.wage economy. ,,82
The morale of the Liberian people was very low at the time
of Firestone's coming, but the use of native labor on the plantation
' • ’ ’ • ' 83 and in various construction projects brought hope for new prosperity.
However two momentous events in the next few years proved this optimism
to be premature. (
Disillusionment with the Firestone arrangements began to appear
as the depression set in. In 1932, Ben Azikiwe wrote that the Fire
stone loan was chiefly responsible for. Liberia's economic problems.
According to him, the agreement gave to Harvey Firestone "not only a
veto power on refinancing this country, but elevates him to a dictator-
80. Henries, op. cit., p. 59*.
81. Azikiwe, cp. d t ., p. 124.
82. Anderson, cp. cit., p. 6 .
83 . Azikiwe, op. cit., p. 123, ship whereby he effectively controls the immediate destiny of that
government." What Azikiwe failed to point out however, was that
even at a rent of 6 $ per acre, the $6,000 which Firestone paid annually
for the lease of plantation land was considerably more than no income
at all from this land. Further 'Liberia did receive substantial
revenue from the export tax, and the benefits of a great deal of new
employment.
As the price of rubber on the world market declined and the production of the new crop fell far short of initial expectations,
Liberia once more found herself in serious financial trouble. By
1931s Liberian national income had fallen to the point where it was not possible to meet both the cost of the Firestone loan and the regular
85 . cost of governmental administration.
The Liberian Government asked the Finance Corporation of
America to do the following things in order to ease Liberia over this
latest- crisis:
1. Reduce the rate of interest from 7 per cent to four per cent;
2. Grant a moratorium on interest accumulation for five years; .
3. Allow the elimination of two foreign officers from the frontier force;
8h. Azikiwe, "In Defense of Liberia," Journal of Negro History, XVII (January, 1932), p. 30.
85 . Bixler, op. cit,, p. 9$. 48
4. Eliminate the position of Assistant Auditor;
5. Equalize the salary of the Supervisor of Customs with those of the Auditor and Supervisor of Internal Revenue;
6 . Reduce the salary of the Financial Advisor hy twenty-five per cent; '
7 . : Eliminate from the budget a provision for payment of outstanding bills, and commitments;
8 . Agree to the issuance of approximately $500s000 worth of internal three per cent bonds payable in twenty years.86
Firestone’s decision to ignore this plea left the Republic with little choice to do other than it did. On January 12, 1934, the
Liberian Legislature passed The Moratorium Act which authorized the
President,
to pay from time to time annually against the interest or the sinking fund due the said Finance Corporation of America such sums from public money which may be available out of surpluses dr otherwise remaining over and above the cost of administration as filed by the Budget.“7
. ' ...... The Act went on to stipulate that the Republic would pay no more to
Firestone until it had a total revenue of $650,000 for two consecutive 88 years. In spite of Firestone’s evident dissatisfaction with this , I 11 / _ ’ " ' arrangement, the moratorium went into effect.
During this same period, Liberia faced another crisis which
threatened to end Liberian sovereignty, and in this situation the
86 . Annual Message of the President of the Republic of Liberia, 1933• Quoted in Brown, op. eit., p. 206.
87 . Section I, Moratorium Act, quoted in Marinelli, op. cit,, p. 51=
88 . Brown, o£. cit., p. 210 Liberians themselves were directly at fault. As George Brown put it,
"The Liberians mistakenly regarded the wanton exploitation of 'the
' ' 89 manpower in the interior as a source of national wealth."
The Liberian Government had tacitly approved a labor agree ment under which tribal Liberians were forcibly "recruited" and shipped off to labor in the cacao plantations on the Spanish island of
Fernando Po. The Frontier Force and high Liberian officials "were cooperating in the enforcement of a system 1, which, by whatever name it was called, amounted to slavery. This was a pathetic course of action for a nation with Liberia's heritage of being established as
"a haven for freed slaves. The system operated in mockery of the national motto: "The Love of Liberty' Brought Us Here." This incident serves to reinforce the inescapable conclusion that there was at the time a vast social, economic, and political gap separating the Americo-
Liberians from the tribal majority.
The United States State. Department suggested the appointment by Liberia of a select committee to investigate the charges.^0 Liberia responded by asking the League of Nations to appoint a committee to investigate. The committee'appointed by the League included a League representative, British Dr. Guthbert Christy as its chairman; an
American, Dr. Charles S. Johnson; and a Liberian, former President m Arthur Barclay,
89 . Ibid., p. 146,
90. Bixler, eg. cit., p. 90.
91. Marinelli, op. cit,, p. 48. 50
In the Spring of 1929? shortly before the investigation of the Christy Committee began? Secretary of State Stimson said, in a note to Liberian Secretary of State Edwin Barclay that:
There have came to the attention of the Government of the United States from several sources' reports bearing reliable evidence of authenticity which definitely indicate that existing conditions incident to the so-called 'export8, of labor from Libbria to Fernando Po have resulted in. the de velopment of a system which seems hardly distinguishable from organized slave trade; and that in the enforcement of this sytem, the services of, the Liberian Frontier Force . and the services and influences of certain high Government officials are constantly and systematically used.92
Afthr five months of investigation the Christy Committee reported that slavery in the classic sense did not exist in Liberia, but that a system of forced labor scarcely distinguishable from : ; . - I . slavery did exist; and that various Liberian.officials, including
Vice-President Yaney were involved. The Committee further charged that the entire Liberian Cabinet knew about the shipment of slaves to , '93 ; Fernando Po, but did nothing to stop it.
The recommendations of:the. Committee were as follows:
...the abandonment of the policy of suppression of natives in the interior, complete reorganization•of the government ? re moval of the incumbent commissioners, the. rehabilitation of tribal authority in the interior, the elimination of domestic slavery, the cessation of shipment of laborers to Fernando Po, the temporary. curtailment of the roads program, and stricter -control of the Frontier Force. 9^
92. Quoted by Anderson, op;, cit., p. 102«
93. Bixler, op. cit., p. 98.
94. Ibid. . On November 17s Stimson said, in a note to Liberia:
Unless they (the labor abuses) are abolished, and unless there is instituted by . the Liberian.. Government a comprehensive system of reform,, loyally and sincerely put into effect, it will result in the final alienation of the friendly feelings which the American Government and people have entertained ’ for Liberia since its establishment nearly a century ago. „ ^
In December, 1930, President King urged the Legislature to
enact the reforms called for by the Christy Committee. However, there
was a great deal of vociferous opposition to this prospect on the part
of the Americo-Liberians, who felt that to relent would be to sacrifice / • ' '■ ■ I ' ■ . • v ; Liberia's sovereignty. Vice-President Yancy resigned on December 2,
1930, without waiting for impeachment. President King resigned the
next day , ..
The .Liberian Constitution did not provide for Presidential
succession beyond the Vice-President, but Secretary of State, Edwin
.Barclay assumed the Presidency. The U. S. took advantage of the
opportunity to demand the acceptance of the reforms in return for 96 recognition of the Barclay .Government. - However, the implementation
of the reforms proceeded slowly, over the next two years, and the
United States and Britain refused to recognize Barclay as more than
a de facto.President, and diplomatic representations were made on
the charge d' affaires, instead of ministerial level. ■
95, Quoted by Anderson, op. cit., p. 108.
96. Bixler, op, cit., p. 100. 52
Early in 1931 Barclay signed the reforms into law, despite heavy opposition. A few days afterward, Britain requested that
Liberia be placed under a Governing Commission controlled by the
League. Later in the same year there'was another outbreak of fighting with the Krus; and it was charged, probably with some validity, that the Frontier Force was being used to take reprisals on the Kras for ! j their cooperation with the Christy Committee, ihe American. Charge:.df
.affairesnoted that since no' visible evidence'of reform was1 forthcoming, the Government of Liberia should apply to the League for assistance 97 and.possible international control. .
By February of 1932, the British had the support of France and
Germany in the demand that Liberia, in effect cease to govern itself, fhis incident, like so many others in Liberia’s shaky history, defies categorization in certain terms. There is no question that the slaving incident was a disgrace. But the Liberians felt that a total sacrifice of the independence and sovereignty of their country was too high a penalty to pay for the crimes of some of their high officials. It is
.. ' - i quite possible, also, to suspect that something other than, pure- hearted concern for the well-being of the Liberian natives was the basis for the motivation of France and England, whose colonial possessions surrounded Liberia,
97= Azikiwe, Liberia in World Politics, op. cit., pp. 252-253= 53
President Barclay showed himself to he an ahle diplomat in the maneuvering that followed. He first informed the League that
Liberia accepted in principle the proposal that international control be imposed upon Liberia in order to enable the Republic to carry out the recommendations of the Christy Committee. He requested that a
'plan of assistance * be drawn up by the League for Liberia's con sideration.
The League.submitted its 'plan of assistance' shortly there- after., but Secretary of State Louis A. Crimes skillfully frustrated its implementation. He proposed one revision after another and caused delay after delay. The League finally withdrew the Plan of 98 ■ Assistance. - ,
In 1935 a new agreement was worked,out between Liberia and
Firestone. Under the terms of the new agreement, the sum-of $650,000 was advanced to the Government. In return. Firestone received an exemption for the remainder of the life of the ninety-nine year lease from all import and export taxes on plantation products, except the . . - " 1 ' documentary stamp taxes of general application; on automobile taxes
on the first 150 cars; and an exemption from income or other personal taxes for the American citizens on the pay-rolls of the Government, the Bank of Monrovia, and the Firestone Corporation. The new agree- - ment also gave to Firestone all sub-surface rights beneath the million
leased acres. The interest rate declined from seven per cent to five
98. Marinelli, op. cit., p. 51 per cent, and no interest had to be paid if in any year Government
receipts fell below $^50,000. ^
As the Republic of Liberia approached the end of its first
century of independence, it could look back upon a very difficult
era. There had been financial crises, internal revolts, border
disputes, and the international disapprobation deservingly received because of the slavery scandal. The Republic consistently came off the losers in their international financial dealings. The record of
the United States showed a curious ambivalence toward its fstep-child*
We had initially gone out of our way to avoid aiding the Republic and
later showed an ability nearly equal to that of Britain to take
advantage of her. Yet, as the tumult of the Second World War ap proached, Liberia? s independence and sovereignty was intact and its
financial status considerably improved.
99. Brown, op. cit., p. 211. CHAPTER 4
THE UHITED STATES AM) LIBERIA AS ALLIES
The Second World War brought about a profound change in the
American attitude toward Liberia as the Republic began to. have in
creasing strategic value. As the United States became aware of the
importance of Liberia, it began to take a really active interest in
the developmental prospects of the country for the first time. This
was not, of course, a case of unbridled altruism on the part of the
U. S. But even as the United States acted in its own interest in befriending and aiding Liberia, it could not help providing a tre mendous measure of assistance to Liberia and actually pushing the
Republic over the hump which separates an overriding concern with
survival from an overriding concern with development.
Liberia wanted to remain neutral as the war began and even
after the entry of the U. S. into the conflict. The Republic asked
the Germans residing there to leave, but this was not satisfactory
to the Allies. The United States pressed Liberia to declare herself ■ , ' : at war, and this step was finally taken on January 27, 1944, against
both Germany and Japan.
1. Henries, oj>. cit., p. 64. 56 As in the First World Wars this war seriously hampered
Liberia’s trading activities« Once more, in the immediate pre-war years, about half of Liberia’s trade had been carried on with Germany
During 19433 Liberia exported 25,000 tons of crude rubber to the Uo So, and as the fighting raged on this supply of rubber became vital to the United States war effort.3 President Roosevelt declared that Liberia was of strategic importance to the United States, and therefore eligible to participate in the Lend-Lease program.
One of the first and most important benefits which Liberia received by virtue of its wartime cooperation with the United States was the construction of Roberts Field.
In November, 1940, the U. S. made Pan-American Airways its agent in carrying out a national defense project known as the Airport
. . It. Development Program. In July of the following year, Pan-American con tracted to deliver twenty Lend-Lease planes to Britain via the South
Atlantic route, Harvey Firestone negotiated with the Liberian Govern ment on behalf of Pan-American to build an airport in the country.
When the negotiations had been worked out. Firestone forces began the construction work on the banks of the Farmington River and adjoining
Firestone’s! ‘ Harbel ' Plantation some - fifty miles from ' Monrovia. 5
2, Bixler, o]3, cit., p. 112,
3, Ibid., p. 121.
4. Anderson, op. cit., p. 144.
5. Ibid., p. 145. 57 The first plane landed at the new airfields named after
Liberia’s first President, on January 18, 19^2, six weeks after Pearl
Harbor. The financing, engineering and construction of Roberts Field, up to near completion were done by the Firestone corporation, acting theoretically as a sub-contractor of Pan-American, who in turn were the contractors with the United States Army Air Force for the con struction of the field under the terms of the Airport Development Act
The actual cost of construction of the field is hidden in Defense
Department records.
The Army Corps of Engineers’ 899th Engineering Co. made improvements on the field and lengthened the runways. During this work they were assisted by the neighboring Firestone plantation which provided current from its hydroelectric plant until the field had its I own generating facilities. In addition Firestone made its hospital ' ij arid recreational facilities available to the U. S. forces.'
Roberts Field became an important base in the ferrying service of Lend-Lease planes to Britain. The monthly average of planes in transit to use the field rose from 200 in early 19*2-3 to as high as 600,^ Later when another base became operational on Ascension
Island, Roberts Field was also used as a refueling station for tactical flights. Task Force 5889, a contingent of 5,000 Negro troops was
■ ' 9 stationed at Roberts Field for the duration of the war.
6 . Ibid. 7. Ibid., p. 152.
8 . Ibid., p. 153« 9. Ibid., p. 151. 58
After V-E Day, the military need for Roberts Field quickly
diminished. Still, it was used by one or two planes per day through
1946, But after the Army Air Forces withdrew, the base was largely
neglected, and required rehabilitation in 1948,10
Later Pan-American made Roberts a regular stop on its four
flight per week service between the United States and South Africa,
and set up a training program for Liberian ground personnel. Air
France stops at Roberts on its regular flights from Dakarto Abidjan
arid Doualla, A local Liberian service operates between Roberts Field
’ ii ■ and Cape Palmas and Sinqe, As R, Earle Anderson put it in summing
up the importance of the field to Liberia:
V , * I By bringing the boon of air communications to Liberia, the United States has, in part at least.,, repaid the Republic for the vitally important rights granted to our Army Air Force in time of war. It is a repayment that is a benefit to both countries in time of peace, for it is facilitating almost beyond Calculation the development of commercial relations between the United States and Liberia and making possible projects of mutual importance,12 . . • ,
.... Another boost in the development of an adequate network o f ,
communications in Liberia was provided by the United States road- : • . . ' < ' ' .i building activities during the War, ' The almost total lack of roads
in the country when the war began was probably the most important i 1 ' single physical factor accounting for Liberia's lack of development,.
10. Ibid., p. 153«
11. Ibid. - "
12. Ibid., p. 154. 59
President Roosevelt sent as his special representative to
Monrovia Colonel Harry A. McBride, who had earlier been the Collector of Customs after the 1911 loan. His task was to negotiate an agreement with the Siberian Government which would enable the U. S. to construct and use in that country whatever facilities were felt to be necessary 1R for the war effort. The agreement reached was called the Defense
Areas Agreement, and was signed on March 31, 19^2.
In this agreement Liberia granted the United States the right to construct, control, operate,and defend at our expense whatever military installations in Liberia were mutually considered necessary to assist in the protection and defense of Liberia. Included in the agreement was the right of the United States to construct access roads . ■ 1 ' . . . ■- from Monrovia to Roberts Field and to Fisherman's Lake northwest of
Monrovia where a seaplane base was to be operated pending the completion of Roberts Field. The United States agreed to' withdraw its forces six months after the war's end.^5
The provisions of the agreement in regard to road-building ' - ' ' ' . " ' ‘ were permissive. The United States was not strictly obligated to construct any roads. There was, however, a strongly implied obliga-
• ' tion to do so. At this point in time Liberia was still neutral, and V . \
13. Ibid., p. 1%9.
i k o Executive Agreement Series #275, Department of State Publication #1859. . 1
15. Anderson, op. cit., p. 149. 6o
President Barclay made it clear in the correspondence preceding the Agreement that he felt that Liberia should be compensated for
a liowing the United States to build a military base on Liberian soil.
Because Roberts Field was completed ahead of schedule, the con
struction of the access road to Fisherman8s Lake was discontinued, since the sea plane base was no longer used.
Firestone had constructed a road from Monrovia to Kakata, and part of the way on to Salala, a total distance of about seventy miles.^
But the need for an arterial highway stretching from Monrovia to the border with Guinea and the Ivory Coast was obvious. Beyond Salala there were road segments which had been started earlier by native . chiefs. These uncompleted and unconnected segments generally lined up with a proposed route that would extend all the way from Monrovia to
Ganta on the Liberian-Guinean border. In addition there was a road that ran part of the way between Ganta and Saniquellie. ^
The United States Army initially went to work on the Salala to Saniquellie road. There was no military reason for the construction of this road, but it was to prove to be of tremendous economic importance to Liberia. The road was completed from Kakata to Salala and from Ganta to Saniquellie. But when the war ended, the portion from Salala to
Ganta was only about half finished.
16 . Ibid., p. 158.
17. Ibid., p. l60. 6i
An American grant was made available to the Liberia Con- 18 struction Company to finish the road, which it did in November, 1947°
Since then an eastern branch road has been constructed from Gbanga to
I ‘ - - Tappita, and a western branch from Gbanga to Zorzor, Voinjoma, and
Kolahun, This road has enabled the agricultural products of the rich ■ ■ ' western region to be brought 'to Monrovia to port rather than to Freetown,
■ ; i - ' ’ Sierra Leone.
For. the first time in Liberian history, there was constructed
a network linking the coastal capital of Monrovia and the enclave of
Amefico-Liberians to the interior of the country. The U. S. played ! ; an important role in this road construction, an Important prerequisite
for further development and also a great aid in the mingling‘of the
indigenous tribal people with the Americo-Liberians. Population centers began to spring up along the roads and cash crop production began to i ■ ' ' replace the traditional village farms along it.
Another giant stride toward the acquisition of the requisite
physical facilities upon which to base a development program came with
the construction of the Free Port of Monrovia, The United States , > -• ■ 19 - , interest in a naval base at Monrovia goes back to 1909. Firestone
considered making improvements bn the harbor in 1926, but-gave up the
project as too expensive.20 Presidents Roosevelt and Barclay agreed
1 8. Russell V. McLaughlin, Foreign Investment and Development in Liberia, (New York: Praeger, 1966), p7 143, |
19. Ibid. . ■ ‘
20. James C. Young, Liberia Rediscovered, (New York: Doubleday, Doran, 1934), p. 36, in 19^3 to the construction of a deep water port. Technical responsi
bility was given to the Navy Department, but for practical and legal
reasons the Raymond Pile and Concrete Company, a private United States 21 firm, was hired by the Liberian Government to do the actual construction.
By 1948, nearly $18,000,000 had been spent on the project, but
the access bridge over the St. Paul River had not yet been started, and 22 Lend-Lease funds were to lapse on June 30, 1948. At the request of
the State Department, Congress passed the First Deficiency Appropriation
Act whereby construction funds up to $4,000,000 could remain available
until 1 9 5 0 The total cost of the port construction was $19 million.
The agreement under which the port was built specified that it
should be a Free Port at which merchandise could be landed, stored, processed, and re-shipped without payment of import duty and that it be
operated under American management. The Monrovia Port Management Company
was organized to administer the harbor and its facilities. The stock
of this company was issued to a group of concerns who were directly
interested in the efficient management of the harbor. Stock was issued
to Farrell Lines, the Mississippi Shipping Company, Firestone, Socony
Vacuum, the Texas Company, the Liberia Company, and the Liberia Mining 24 Company.
21. McLaughlin, loc. cat.
22, Ibid., p. 144.
23. Anderson, op. cat., p. 174,
24, McLaughlin, agu cat,, p. l44. 63
The Port Management Company could, not bring in unskilled
labor and was- required to train Liberians and employ them whenever
possible. As a fee for managing the port, the company got five per
cent of the port's gross revenues until January, 1953, and ten per
cent thereafter. In addition, after wages, salaries, and other
administrative expenses including the cost of acquiring equipment and
making necessary repairs are paid from gross revenues, a reserve fund ■ . ’ . 1 ’ • • * ' , S I may be set aside in an amount agreed upon by the American and Liberian
Governments. The balance, defined, as net revenue, may be used at the
discretion of the Management Company, in agreement with the Liberian
Government, for improvements, but only to the extent approved by the
U. S. Government. The rest of,the money is given to the Liberian
Government to use to repay the $19 million owed to the United States
for the construction of the port. The agreement provided for this
credit to be non-interest bearing, but the United States has always
considered this feature as a foreign assistance grant to Liberia and not an advantage to be passed on to the users of the: port in,the form
of lower rates,in 1965, the United States and Liberia reached an
agreement to transfer the port to Liberian ownership with a graduated rate of amortization of the outstanding debt through 1999» Annual payments will be placed in an educational foundation to be jointly of. administered by the United States and Liberia.
25. McLaughlin, op. cit., p. 145.
26. Ibid,' Another activity which involved Americans in aiding the
development of Liberia in the immediate post-war period was the so-
called Stettinius. Plan, In September, 194? 9 Edward E, Stettinius, Jr,
former Secretary of State, entered into an agreement on behalf of the
Stettinius Associates-Liberia Inc, with the Liberian Government, The
object of the agreement was to assist the development of the human and material resources of the Republic of Liberia.The Stettinius
company 'was divided into two parts— The Liberia Company, which was i to promote the development of Liberia's natural resources and the
Liberian Foundation, Inc. to accomplish the social aspects of the 28 program. The company was granted an 80 year concession to pursue
any line of business in the Republic which had not previously been
granted to another concession. The Liberian Government held twenty-
five per cent of the capital stock of the Liberia Company.
The Liberian Government had representatives appointed by the
President on the Board of Directors of the Liberia Company. The policy of Stettinius Associates of promoting the health and educa
tion of Liberians- was included in the Statement of Understanding as
a contractual obligation. It stated:
27. Anderson, ojs. cit., p. 255.
28.,., Ibid., p. 256.
29. McLaughlin, op. cit., p. 56, It shall be a primary concern of the Liberia Company to advance the welfare of the people of Liberia, and the inauguration of every project shall be accompanied by provision for the health and training of Liberians who are employees of the Liberia Company or any,subsidiary thereof.30 ' ;
There was a great emphasis placed on the construction of public works projects such as. water supply and sewerage systems for
Monrovia. The projects which were to be started by December, 1950, were as follows: (l) the introduction of machinery for collecting, grading, processing, and marketing agricultural products; (2) the organization of a national bank; (3) mining operations; (4) an import and export company; (5 ) lumbering operations; (6) fisheries; (7 ) trans 31 portation and public services.
Unfortunately, Mr. Stettinius died before most of these projects could come to fruition. He was able, however, to get a program of cacao growing under way, and the Liberia Trading Company was formed to provide an import -export service. With the aid of
Stettinius1Associates, a cold storage plant was built on Bushrod
Island allowing for the importation of frozen meats, etc. for the first time.
The death of Mr. Stettinius virtually brought to an end' the humanitarian and philanthropic activities of the Foundation. The
Liberia Company, however, continues to operate, and the benefits . % brought to the Republic by the efforts of Stettinius were numerous and important.
30. Anderson, op. eit., p. 258.
31. Ibid., p. 259. CHAPTER 5
THE STRUCTURE OF THE LIBERIAN ECONOMY
The Liherian economy consists essentially of three separate producing centers. These are subsistence agriculture, commercial
agriculture, and mining. It would be well, before looking at these
production centers individually, to review the natural and human
resources of the Republic,
The iron ore deposit at Bomi Hills is estimated at 300,000,000
tons of ore of .66 plus per cent purity. The extent of the deposit at
Nimba is not yet known, but some informed guesses run to one billion
tons. At Nimba, LAMC0 expects to be able to produce at least;7 million
... . i - ' tons of high grade ore per year for a minimum of thirty years. In .
addition, there are other iron ore deposits under development in the
Bong Mountains and in the Mano River area,
Both gold and diamond mining, are of economic significance.
Gold production reached its peak in 19^3 when 30,000 troy ounces were
exported. Since then production has declined, but some of the decline
must be accounted for by smuggling. In addition to gold and diamonds,
traces'of columbite, manganese, copper, zinc, tantalite, lead, < chromite
graphite, pyrite, and corrundum have been discovered.. None ,of these
1 . McLaughlin, op. cit., p. 3° 67
are yet being mined commercially, and the extent and value of these " 1 o various deposits has not yet been ascertained.
In Liberia, most of the soils are of low to medium fertility, suitable primarily for. tree crops. . There is extensive natural standing
forest. About nine million acres, over one-third of the total area
of. the country, is covered by high bush virgin forests. Approximately
five million more acres are covered by broken stands of trees of
salable type and size. Over 235 species have been identified in
these forests, at least 100 of which are marketable. There are pre- , sently eight National Forest Reserves, which aggregate 3-2 million
acres containing an estimated 140 billion.board feet of marketable
lumber, and a potential yield, at full production of 2 billion board
' o ■ , . feet per year.
The population of Liberia has long been far over-estimated.
Until 19d5.-i the population was generally thought to be around, two and
one-half million. The first complete census was not taken until 1962,
however, and those figures were not released .until September, 1965.
When they were released, they showed a surprisingly low total of . • ' ■ . .. Ij. ! ■ 1,016,443, less than half the previously accepted figure.
' 2. Ibid.
3- Ibid.
4. "A Second Look at Liberia,” by a Special Correspondent, Africa Report, II, No. 7 (October, 1966), p. 21. , , 68
The average population density is roughly only about 23«5
per square mile.5 In i960, the total Liberian labor force was •
estimated at 3505000, According to Glower, over 80,000 of these were
employed in the money sector of the economy on a full-time wage or
salary basis? McLaughlin uses a figure of 90,000 for 1963.' Thus ; ' ' . ' ' ' ' ' ' ' over two-thirds of the Liberian labor force is still centered in the
tribal economic system. '
There is a Liberian shortage of skilled workers in two senses.
First, in i960 more than half of all the salaried positions in private
enterprise were filled by non-Liberians.® And many 'firms offer posi- • ' ' | Q tions which remain unfilled for lack of qualified personnel.^ The
shortage of skilled labor is, of course,' a long-range problem which must be solved by far-sighted action to improve the educational system.
That sector of the economy, then,which engages by far the most
workers is the subsistence agriculture sector. There are at least
eight and one-half million acres devoted to subsistence agriculture
and being worked under the traditional bush-farming rotation system.-^
5. McLaughlin, op. cit., p. 4.
.6 . Glower, 033. cit., p. 259»
7.. McLaughlin, op. cit., p. 7- Based on estimates from the Office of national Planning, 1963-1964, Annual Report.
8 . Glower, op. cit,, p. 84.
9- Ibid,, p. 263.
10. McLaughlin, op. cit., p. 5= 69
This system is one. of extremely; severe land underemployment, "because for. each acre actually "being cultivated at a given time, about ten '
'. 11 ■ 1 • are lying fallow.
Tribal agriculture is primarily a form of the family plot pattern. The typical tribal family will Work from one to three acres,
:• ' . . ■, "i f ) l devoted principally to the production of rice and cassava. That portion of the tribal agricultural system which is engaged in cash- crop production, however, accounts for .most of the agricultural prod ucts exported, with the exception of-rubber.-*-3 These exports include palm kernels, coffee, cocoa, and piassava.
Improved seeds and equipment have been introduced along with ' ■ - ' ■ • i ■ new techniques. The fact that they have not been widely accepted, by the tribal people is more a sociological than a technological problem.
, • ' -I • . ■■ ' These native, farms, occupying a third of the total land area of the
Republic are operated at very low levels of efficiency. As the Glower team of economic researchers from Northwestern University put it: " ■ ■ ■ ' . v ' 'Low productivity is less a matter of inferior skill, knowledge, and physical resources than of ingrained cultural habits and political procedures and institu tions hostile to improved technical performance. . . As matters stand, there is simply no room in contemporary tribal society for knowledgeable and commercially-minded individuals.17
' ' T V 11. Ibid. i • 12. Glower, ojo. cit., p. 232,
13. Ibid.
± k . Ibid., p. 2 k k . This lack of receptivity to change and to adapt to a new way of thinking about old problems may be taken as a primary defining char acteristic of underdevelopment» This characteristic is at the same
■i ■ ■ time both the economic cause and effect of Liberia's low per capita income. As long as productivity in this principal sector of the econ omy remains low, it imposes a drag on the rest of the economy. At the same time, however, a slow rate of development in the other sectors retards the growth of income in agriculture.
The entire country depends upon the expenditure of governmental revenue to provide the basic economic infra-structure. Tribal.agricul ture contributes very little of the revenue needed for such capital investment. As a result, the subsistence sector of the economy absorbs resources far in excess of its contribution, and thus indirectly but substantively retards other lines of development.
Another problem which contributes to the low level of per capita income in the tribal sector is the rate of taxation. . Glower, et al found that, "Wholesale extortion is practiced in the hinterland by or in the name of government, with its implicit, if not explicit consent.The legal taxes in kind are very high— a minimum of about - ! - ' - " 100 pounds of rice per family per year in most areas.^ Labbr services are'also often requisitioned by the government.
1 5- Ibid., p. 246. . 71
Essentiallyg the problem is to bring more subsistence farmers into the area of cash crop production and to increase the productivity and efficiency of the commercial agriculture section.. In the.long run, the agricultural sector of the, Liberian,economy must be strengthened because it will be increasingly, relied .on,as,the. production.capability of the mining sector declines in the next fifty years.
In i960, the agricultural sector of the economy accounted for slightly more than one-third of gross domestic income and expenditures.
But between 1950 and i960 the shift in resources from subsistence to 1 commercial agriculture was shown by the growth in urban population,
' ' I ' ...... school enrollment, and the rising rate of rice importation.
The commercialization of Liberian agriculture has been slow in the past due primarily to a lack of explicit policy measures to improve agricultural technology. More recently, however, the rate of changeover has increased, as new opportunities for wage employment, rising wages, and improved transportation and communication facilities have clarified and heightened the appeal of commercial participation to the native population.
Nearly all of the large plantations in Liberia are owned by foreigners„^7 Rubber is the only agricultural commodity produced for export in significant quantity. There was a short-lived experiment in plantation banana growing, but it failed because of the incidence of disease.
IT. Ibid., p. 233.
18. Ibid. 72
The only commercial agricultural enterprise for which estimates of capital expenditure have been made is Firestone0 The figure is $32 million, including roads, housing, processing facilities, hospitals, schools, and other installationsThe current value figure of this enterprise can reasonably be set at $64.million. Based on the 1963 out put of 77 million pounds of. crude rubber valued at $20 million, the 20 capital-output ratio is over 3= Firestone has 7 0 ,000 acres in actual production, while the next largest rubber producer, B„ F. Goodrich has 8,600. The following table represents the productive acreage developed of various Liberian Rubber
Concessions. 1
TABLE 1
PRODUCTIVE ACREAGE DEVELOPED, ACREAGE IE PRODUCTION, AND EMPLOYMENT OF VARIOUS LIBERIAN RUBBER CONCESSIONS a Acreage i n . Production Output Employment Acreage Concession (1962) (i960) (1961) Developed
Firestone 70,000 81,000 21,000 102,000 Goodrich 8,600 «==*=» 740 58,000 Liberian Agric, Corp 5,000 — 1,000 53,000 Salala Rubber 500 960 15,000 Liberia Co. 3,000 1,100 15,000 African Fruit Co. 4,000 1,000 500 a Sourcet McLaughlin, op. eit., p. 25.
19„ McLaughlin, op. cit., p. 55,
20. Ibid., p. 56.
21, Ibid., p. 24. 73
The rubber concessions are currently paying about $4=5 million
in income taxes annually to the Liberian Government. Virtually all of 22 this comes from Firestone. It is difficult, to establish the total
income generation of the rubber industry because of. the fringe benefits provided. Firestone reports payments in wages and in kind for its
21,000 workers to be between $9 and $10 million annually. The other producers would add $2 to $2§- million more. . The actual money income earned by rubber workers and injected into the Liberian economy:'.is OO probably on the order of $8 million per year.
The iron mines in Liberia account for considerably less employ ment than the rubber plantations, but the average wage payment is much higher. There are only about 6 ,%00 people employed by the mining opera tions, but they receive wages amounting to between $7.5 and $8 million
annually. ^
The world market price for iron ore rose steadily until i960, when Liberia received a gross income per ton of $ 7 . 0 3 By 1962 iron
ore royalties had supplanted income taxes as the largest source of governmental revenue, and in 1963 these royalties amounted to $6.8 million.^
22. Ibid., p. 27.
23. Ibid., p. 19=
2%. Ibid., p. 31.
25. Ibid., p. 132. 7b
According to McLaughlin, "The future behavior of iron ore. royalty payments along with taxes paid by other concessions arid Liberian producers of export products .will hold the.key to the success of Liberia's 27 economic development effort," -Because, significant saving.is.necessary to finance development projects, and because the Government is the only source of substantial saving, it follows that the.governmental revenue derived from the profits of the concessions do hold the key to the future ability of the Government to undertake economic development projects.
In i960 Liberia had a gross domestic money income of $172,9 1 million less concession profits and reserves after taxes of $4$,7 million, 28 or an approximate per capita annual income of $127. At this low level of per capita income, it Is obvious that no significant degree of saving..
I . - . - can take place in the bulk of Liberian society. In fact, the average propensity to consume is 87=5 per cent. Of this 75%, or $62=5 million 29 is . spent on imported consumer goods, In 19U5, the income of the Republic was too low to finance more than debt service and the performance of essential government, functions,
Between 19^3 and 19^7 expenditures for health, education, public works, agriculture, and public enterprises averaged - about 23 per cent of total expenditures. Between 1948 and 1953 these rose to a range of 40 to 50 per cent. Since that time, they have remained at a fairly stable level c
27. Ibid,
28. Ibid., p. 114.
29. Ibid., p. 34. of about 50 per cent. Education and health, expenditures alone have ' 1 - 36 averaged between 10 and 12 per cent.
The budget of the Republic has consistently manifested the
conflicting desires to invest in developmental projects and to live
well and present a desirable image of affluence to the world. This
conflict must be resolved and the government must provide both the
savings and then the capital.investment in development programs if
Liberia is to begin to emerge from its underdevelopment. CHAPTER 6
PRIVATE AMERICAN INVESTMENTS IN LIBERIA
From 1870 m- 'both public and private capital flowed into the British and French colonies surrounding Liberia, but Liberia was never able to accumulate the capital needed for its own development.
Between 1870 and 1936 British public and private capital pouring into the colonies of former British West Africa amounted to l 116.7
1 " " million.
One undeniable benefit of colonial status thus accrued to
Liberia’s neighbors, while the independent Republic stood still.
The British private investment provided jobs, incomes, exports and profits for reinvestment, and the public capital provided the necessary economic infrastructure of roads, schools, hospitals, and communication and transportation facilities. Liberia’s economy, meanwhile languished from a lack of like investment. Not until 1926, with the coming of
Firestone, did Liberia experience the introduction of private capital.
' Since President Tubman first advocated his "Open-Door".in vestment policy in igWt,' however, the number, of foreign ihirestprs has
1, McLaughlin, op. cit., p. 4$. risen to twenty-five. A large proportion of this foreign invest
ment has been American. Liberia's ample natural resources have made
it relatively easy to attract American investment bn easy terms.
In addition, the use of United States currency, in effect since 19^3?
has been an important factor in fostering a favorable investment 3 - - ! : climate. Not the least attractive inducement Liberia offers td
American investors has been its political stability, a point made
candidly in a report•on investment opportunities in Liberia published k by the First National City Bank sof New York.
In I96I, the Liberian Bureau of Concessions listed more than
forty firms which had signed agreements with the Liberian Government.
In i960, only twenty-five of them were active.^ As of January, 1962,
the twenty-one major foreign businesses accounted for $437 million
in investments. . Rubber and other agricultural products comprised
$4-9 million; iron ore mining operations. $362 million, or 87 per cent;
timber $1.3 million; and others $4.3 million.. . The figures for the
total amount of foreign private business investment in Liberia is
$44$ million.6
2. "Tubmans Paradise," Tom Sterling, Reporter (Nov. 8 , 1962), vol. 27, p. 46. '' '
3. Glower, og. cit., p. 8l,
4. . "Tubman"s Paradise," oj>. cit., p. 40,
5. McLaughlin, op. cit., p. 64.
6 . Ibid, According to William C. Trimble, the Director of the Office of West African Affairs of the Uaitdd States State Department, "Our investments in Liberia today are estimated at more than $300 million, or twenty per cent of the total amount of American private investment 7 ' is all of Africa0" This figure includes the Liberian American Swedish
Minerals Company (iAm CO), which is only partially American owned; but, if included brings the percentage of private investments in Liberia by American firms to 7^%. If IAMCO is not included, the figures would
■ ' fi ■' ' ' be $106 million or 24%.
TABLE 2 . ••
PRIVATE FOREIGN INVESTMENT IN LIBERIA, 1962® Country Amount of (Millions of Origin U.S. Dollars) United States,' ' : <' • $ 106.7 Federal; Republic of Germany ■ 105,. 2 Switzerland 1 3.5 Italy 2.0 Netherlands 0.7 Spain 0.6 Erigland1 0.6 Sweden 0.5 U.S
Total 436.9
a McLaughlin, op. cit. , p. 6 6 .
7. William C. Trimble, "Economic Development in Liberia,1 •:U. S. Department of State Bulletin, (Dec. 28, 1964), p. 913•
8 . McLaughlin, op. cit., p. 46. 79
ai i of the agricultural concessions in the Republic charge a land rent of 6^ per acre annually on all the land in the concession, whether it is developed or not. The non-agricultural concessions charge 6^ per acre on all land that is .actually used except that used 9 for railroads, roads, port facilities, and airports.
The Firestone Company has been the only foreign enterprise in
Liberia to pay a corporate income tax. Its plantation at Harbel is the world’s largest, and it contains, the largest latex concentrating plant,
Most of the 21,000 employees of Firestone receive on the job training. But Firestone has made a more significant contribution than this to helping Liberia solve its training and educational problems.
As of 1955j Firestone had established fifteen divisional schools staffed by thirty-one teachers. In that year 2200 children and 300 10 adults were in attendance. The number of scholarships to American universities offered to Liberian students by Firestone stood at 27 11 in 1962.
Firestone offers other fringe benefits to its.employees. It provides free and subsidized food and supplies through its subsidiary,
9 .. Ibid., pp. 84-85.
10. Wayne 0. Taylor, The Firestone Operations in Liberia (Washington: Rational Planning Association, 1956),' p. 77«
11. Glower, op. cit., p. 166. 80
the United States Trading Company. By 1950? it had built in excess
12 ' of 105000 homes for its employees. And the company has constructed
a 100 bed hospital at Harbel and a smaller one at Cavalla.' These two
hospitals cost $500)000 to build) and Firestone’s medical budget has •' ' 13 surpassed $500,000 annually in recent years.
The United States Trading Company was originally established by Firestone to import goods for its employees, but it has since
expanded to the point where it is now the largest 'wholesale and
distribution company in the country. All materials and supplies are
imported duty free, so that labor is the only domestically purchased ■ : i h ‘ import in the Firestone operation, ' ,
It was another Firestone subsidiary, the Liberian Construc- • ■ ■ - ■ . ' tion Corporation, formed during World War II, which did most of the
construction; and engineering work on Roberts Field and later completed • ' - 15 the construction of the road from Gbahga to Ganta.
Firestone operates the United States-Liberia Radio Co-op,
which is a licensed public utility. The company also began ..Liberia’s banking system. In the mid 1930’s a bank was established by Fire
stone in Monrovia, In 1938, it became the Bank of Monrovia, the
official Government depository. The Government expressed some dis-
13. Ibid., p. 104.
14. Glower, op. pit., p. 156,
15. Ibid,.. - 81 satisfaction with the rates and services provided3 so in 1955 it was 16 sold to the First National City Bank of New York;
One of the most notable and praiseworthy of Firestone’s activities in Liberia has "been the assistance rendered by it to independent rubber growers. The company has distributed over 10 million rubber trees and provided advice, credit, and other assistance to a large number of independent rubber farms. The company has even conducted surveys, given advice on planting programs, and prepared management plans for,independent farms, based on the individual 17 characteristics' of. each.
The B. F» Goodrich Company was granted an 80 year concession in 195^ which.allows it to engage in agriculture, forestry, and especially rubber farming. The terms of the concession agreement obligate the Liberian Government to aid Goodrich in securing an
- . j j g ■ • _ ' ' ' adequate labor supply. rIts labor turnover is higher than that of any other company, partly because, up until recently, the company has been engaged primarily in the roughLwork of clearing the land for planting. The fringe benefits offered are similar to those of Fire- . 19 , stone. •
1 6 . Ibid., pp. 153-154.
17. Ibid., pp. 167-168.
18 . Ibid., p. 187.
19. Ibid., p. 186. 82
By 1961, Goodrich had M i l t 35 miles of service roads and an eight mile road between Monrovia and the Bomi Hills. It h#.s also constructed warehouses, shops9 a 180 kilowatt power plant, schools, houses, a hospital, and a rubber processing plant. Since the income from net sales will not be taxable until 1972, the only contribution made by Goodrich to LiberiaIs economic growth so far has been in the form of welfare contributions and wages paid,
. The Liberia Company has two main operations. It Operates a large plantation in the interior which grows coffee, cocoa, and rubber.
It also operates a commercial representation and agent service for a number of airlines and the Mississippi Shipping Company. The Pres ident of Pan American Airways is also the President of the Liberia
Company. This.company provides management services to the Liberian
Government in the Light and Power Division and the. Water and Sewers I : ' : . ^ 20 Division of the. Department of Public Works and Utilities. It has continued its philanthropic, mission by providing 10 per cent of its distributed profits to the Liberia Foundation, which distributes
- ' ■. 21 funds to charitable, social, and educational institutions.
The iron ore industry in Liberia is composed of four major firms. 1Their investments, production capacities, capital-output • ratios, and employment are shown in the table on the following page.
20. Glower, op. city, p. 173»
2 1 . 'ibid., TABLE 3
INVESTMENT,■PRODUCTION, CAPITAL-OUTPUT RATIO, AND EMPLOYMENT OF MAJOR LIBERIAN IRON PRODUCERSa
Estimated Capacity of Production Quantity Capital Investment . Millions Value Output . Company (Millions of Dollars) of Tons ($8 per ton) Ratio . Employment
• LMC 37 ' ' 3.0 24.0 1.5 1400
LAMCO 220 7.0 56.0 3.9 4000
DELBiCO ' 100 4.5 28.0 3.6 4000 '
HOC 26 3.0 24.0 1.1 1000
L Totals 383 17.5 140.0 2.7 6400
a Scare®: Metiaaghlim, op. cit.9 p. 30. 84
DELIMCO is a (Semsm Gompainy which, signed a seventy year concession agreement with the Liberian Government in 1958« The agreement enabled the company to explore and work 300 square miles
22 '■ 1 , in the Bong Range near Salala. The ore in this deposit is not nearly as pure as that in the others, ' . •
The IAMQ0 project started in 1953 when the United African-
American Co-op was granted a seventy year concession to explore and work an area of 900 square miles. In 1958, Swedish interests became involved and the name was changed to the Liberian American
Swedish Minerals Company,
In April, i960, the Bethlehem Steel Company acquired a 25 per cent interest in LAMCO; and on the same day, IAMC0 entered, into a new agreement with the Liberian Government„ A 50/50 partnership was established between LAMCO and Liberia,. The Liberian Government : ' - .... ' 1 holds title to 50 per cent of LAMCO*s capital stock. As a co-owner, the Liberian Government will always receive half of the net profits 2 k of LAMCO*s 75 per cent ownership of the Joint Venture, The Govern ment’s reception of these dividends is in lieu of any royalties, 1 duties, or income taxes, i: ______• 1
22. Clowef, op. cit,, p. 224.
23. Ibid., p. 210,
24. Ibid., p. 211, LAMCO’s large operation is in the Himba Ranges a source of
very rich ore. The company has excavated huge open pit mines, and
constructed a market place, a 90 bed hospital, a library and schools, 2 5 and other structures with a community function.
In the process of developing and operating its concession,
LAMCO has made some.significant long-term contributions to the de
velopment of Liberia's economy. In order to haul its ore to the
hafbor at Buchanan, LAMCO contracted with the same American company
that built the Free Port, Raymond International, to construct a 165 ; , , ~ 26 mile railroad at a cost of over $60 million.
Since the facilities at the port were entirely inadequate for
the efficient loading of iron ore, LAMCO completely renovated the . 1 v ‘ ' Buchanan harbor at a :cost of $35 million, making it the second largest 27 port in the country. :
An exceptionally large proportion of LAMCO's, staff personnel
are Liberians. In addition, LAMCO plans a progressive Liberianization
of its labor force which is to replace up to one-half of its foreign 28 employees with Liberians within ten years.
In 1938 at the suggestion of the United States State Depart
ment, U. S. Steel was given a six month exclusive right to explore
25. Ibid., p. 215-216.
26 . Ibid., p. 216.
27. Ibid., p. 217.
28. Ibid., p. 217. 86 for iron ore in the Bond Hills region. Iron ore was founds hut U, S.
Steel felt that it would he much too expensive to ship, and abandoned 29 the idea of starting mining'operations.
After an American geological survey team had been sent to
Liberia by President loosevelt in response to a request by President
Barclay in 1943, Colonel Lansdell Christie, an American, organized the Liberia Mining Company. Liberia Mining Company signed a concession agreement with the Liberian Government in 1946 which gave the company exclusive mining rights within a radius of forty miles of the Bcmi
Hills. The agreement also specified that Liberia was to receive 5 $ 30 . per ton of ore exported. .
The Free Port of Monrovia, together with the bridge over the
St. Paul Biver made it feasible for Liberia Mining Company to begin operations, since before these facilities were constructed, shipping the ore presented an insurmountable obstacle, as U. S. Steel had reported. Christie was able to interest Republic Steel in the project, and thus secured a $4,000,000 loan from the Export - Import Bank to ' ' " ■ • 31 assist in its development.
The railway and roads constructed between the Free Port and the
Bomi Hills contributed substantially to other economic as well as " ' • ' ' . . . social projects extending far beyond the utility of such a trans portation network to Liberia Mining Company.
29 . Anderson, og. cit., p. 182.
30. Ibid., p. 183.
31. Ibid., p. 184. 8? In 1951s EMC began producing iron ore at an average value , . 32 per ton of$10,6$. Like Firestone, IMG set,up a subsidiary, the
Tropical Trading Company, to sell merchandise to its employees. Its fringe benefit plan is relatively generous and the. wages paid by 3 3 EMC are in line with others in the iron industry in Liberia, _
The Liberia Mining dampany did some exploration work in the
Mano River area also., However,1 the Liberian Government persuaded
EMC to forego its right to exploit the; Mano River deposit in return for a 15% equity in a new corporation. This arrangement was formalized in a 1957 Statement of Understanding,- which created the National
Iron Ore Company as a partnership between EMC, the Liberian Government, > 1 ■ ; 34 and a group of private investors, headed again by Colonel Christie.
The original .$10 million of equity capital Was composed of
$5 million from Liberia, $1,5 Mllion from EMC, and $3.5 million from
Liberian Enterprises, Inc, Under the terms of the NIOC concession of 80 years duration, the Liberian Government will receive dividends only on its 50% of capital stock since" all profits of the corporation 35 ' : ' • • , are exempt from taxes. The company paid an exploration fee of $100 per month, and will pay a land rent of 6^ per acre for the first ten
32. Glower, op. cit., p. 201,
33. Ibid., p. 203. ;
34. Ibid., p. 204,
35. Ibid. 88 years, 1C$ per acre for the next ten years, and 20^ per acre for the 36 remaining sixty years of the concession’s, tennre,,
So not until 1951 with the opening of Liberia’s first iron mine and a substantial upward revision of the government’s share of
Firestone’s profits did the Liberian process of growth really gather
impetus„ This impetus was, of course, provided by foreign invest ments , yet the economic .specialists in the United nations and the
International Bank for Reconstruction and Development have repeatedly
.warned that ."the role of. foreign finance in economic development can • 37 only be of a subordinate character." -
Before the end of World War II,:Liberia did not have sufficient revenue for the provision of essential governmental services, and there, were very few Liberians who were technically equipped to conduct effective research and planning activities. Liberia’s economy was greatly1 stimulated during the war years, however, as was shown in
Chapter III. .1
Today, expert advice from IBRD to the contrary notwithstanding, foreign concessions occupy a very dominant position in the Liberian
economy. These large foreign investments have brought more than jobs
to Liberia. They ..have played a very substantial role in the provision
36. Ibid., p. 205.
37. . United Wat ions, .Department of Economic Affairs, Methods of Financing Economic Development in Underdeveloped Areas (Hew York: 1949), P. 94. " : “ — — of the essential infrastructure for further economic development.
They have provided roads9 railroads, port facilities, schools, hospitals, power plants, and communication capability.
Liberia presents a nearly classic representation of an under developed economy. The direct foreign investment has been concentrated in the production of rubber, iron ore, and timber--all extractive industries producing for export. It is undeniable that foreign investment has provided the stimulus for the development of natural resources which otherwise would have lain dormant for some time. But the benefit which the country as a whole receives from this type of investment is marginal because of its extractive nature. Rubber, iron, and timber have really very few links to the rest of the Liberian economy. The only significant connection is the domestic purchase of labor, since all other things needed by the foreign firms are imported duty free, and the products are exported 'with virtually no manufacturing done in the country.
In 1962 Firestone paid unskilled laborers 45^ per day. In dependent rubber farmers and the concessions pay only 370 per day.
Firestone has apparently been amenable to raising wages, but has been discouraged from doing so by the Liberian Government because the in dependent rubber farmers, who are for the most part wealthy and influential governmental officials and politicians, do not want to 38 pay higher wages.
38. Glower, op. cit., p. 150. 90
From 1956 to i960 Firestone and the Liberia Mining Company declared profits before taxes at over $160 million.Together they accounted for virtually the entire amount lof. royalties and concession ’ taxes and bOPfo of the total revenues collected by the government in the 40 decade of the 1950’s. In 1962 both Firestone and LMC voluntarily agreed to a renegotiation of the tax provisions of their original concession agreements. Formerly^ both were subject to rather low royalty taxes based upon gross output. As a result of the renegotiation i. 41 they now pay 35% of their net profits to the government.
As Glower<, et al state, "Few aspects of government operations are of greater significance to Liberia’s development prospects than the regulation and control qf foreign concessions, particularly in ' ; 42 iron ore mining and rubber., The foreign.concessions in Liberia ■ ' ' ' . " ' " i now operate virtually outside any effective control of the Liberian
Government. They are not required to file statistics and reports with the government. Liberia would probably be very well advised to scrutinize and analyze much more closely than at present the performance of the foreign concessions. Such short-sighted measures as the NIOC
39. Ibid., p. 134.
40. Ibid.
41. Ibid., p. 121.
42. Ibid., p. 81. agreement, fey which the Liberian Government sacrificed its taxing power have resulted in the Republic paying a very high price for investment in foregone revenues and other benefits which could accrue to Liberia at a significantly stepped up pace. CHAPTER ?
UNITED STATES FOREIGN AID PROGRAMS H LIBERIA
The United States has historically been the principal source of foreign economic assistance to Liberia and continues to occupy this position in the face of the absolute expansion of the flow of aid from other countries and from the United Nations <, Various motivations have been attributed to the United States to explain the pre-eminence (i of this country in the offering of aid to Liberia, Undoubtedly3 each of them, taken singly, present a superficial and inadequate explana- - tion. The most frequently ascribed motivation concerns the special obligation which the U, S„ has felt toward Liberia based on the U, 8 , role in Liberia’s founding. However, this special concern about our
"step-child8 did not manifest itself in the generation of a particularly active participation by the United States in Liberia8s economic develop ment during the first century of Liberian history. United States foreign economic assistance to Liberia has also been attributed to the humanitarian spirit of this country. But this motive did not appear overtly until after 1951, United States aid to Liberia has.been seen by some observers as an instrument designed to promote U, 8 , private investment in that country. The construction of the Free Port of Monrovia and the 1948
Export-Import Bank loan to the Liberia Mining Company may be viewed as examples of.this motivation. Still other ■writers have suggested that in a continent surging with newly-won independence and for the most part intrigued by various strains of African Socialism, the U„ S„ has a great stake in the success of the Liberian model of development through free enterprise.
At any rate, aid from the United States may be divided quite neatly into two periods. All aid to Liberia before 1951 came from the
United States, was given without a formal program, and was received into
, 1 _ ( the Liberian economy without the assistance either of an economic develop
ment plan or even a planning agency. Since 1951? all of these charac teristics have changed,
l. The eventual appearance of a United States economic aid mission . . ' . , ' in Liberia was an outgrowth,of the selectiomzof Liberia as the site for a World War II airfield. With U, 8 , troops assigned to Liberia were health officers whose primary duty was the maintenance of sanitary conditions for U, S, military personnel. However, the efforts made to combat malaria and other diseases were expanded to include the treatment of afflicted Liberians and later to the establishment of a working relationship between the United States .Army and the.Liberian National i, <>! ■ 1 Pdblic Health Service, The United States Public Health Mission in
Liberia was operative from 1 9 % to „ 1950,
■ (She P6rt Agreement of 1 9 % provided for a United1 States Economic -i ■ ' ■' : Mission to survey the economic potential of Liberia, Its purposes were: 94 (l) To study and screen Liberia’s import requirements as prepared by the Liberian Government and subsequently advise the United States on the country’s relative need for various items; (2) To survey Liberia’s resources and evaluate their potential for future development; (3) To prepare proposals to both the Liberian.and .American Governments for specific lines of endeavor, to, further economic development»
The United-States Economic Mission Sf the Foreign Economic
Administration and the United.States Public Health Mission were admin-
. istratively separate organizations, both being ad hoc bodies controlled by different agencies of the United States Government. They were: not■to be integrated, as will be seen, until 1950 by the establishment of the
Joint United States-Liberian Economic Commission.authorized in the 1950
Act for International Development„
Health hazards existing in:Liberia in 1944 were appalling.
Malaria was rampant in the Monrovia area. President Tubman formally requested the establishment of the.Health Mission in Liberia with the
1 ' proviso that Major John B, West of the United States Public Health .
Service be named to head the mission.' West .was appointed.and the
Mission was established in 1944,^
Shortly after the establishment of the Mission, Dr. Smith, a member of the United States team, conducted a survey of conditions in
1 . McLaughlin, og, cit., p. 147°
2. Ibid. j p. 148. ' the Monrovia area. .His conclusions were startling. H e 'found that 93% of the buildings in Monrovia were breeding places for mosquitoes and that 94% of the mosquitoes were carriers of malaria. This was at a time when there were only six doctors and two nurses in the entire country.4. 4
The first project undertaken by the Public Health Mission was naturally an attack on malaria in the Monrovia area. Spraying with DDT was done with the help of Liberian personnel trained at Roberts Field.
The immediate result was a decline in the incidence of malaria of 95% ' ' 5 . in one year. However dramatic this initial result was, it was of little permanent significance. The control of malaria requires continuous effort and substantial capital outlays in order to permanently drain the swamps and marshes. Of equal importance in the long run is the training of doctors and nurses and properly equipping them.
Gradually the Public Health Mission began to assume as its goal the establishment of an effective preventative program. This involves the training of a sufficient number of professional and sub professional medical personnel, establishing treatment clinics through out the country, improving the diet of the hinterland people, and breaking down their traditional resistance to modern medical techniques.
As E. Earle Anderson said:
3= Bixler, op. cit., p. 96.
4. Anderson, op. cit., p. 168.
5. McLaughlin, op. cit., p. 151. 96
While the elimination of malaria takes first place in any health program in the tropics, that disease was only one., of the many medical .problems, in Liberia. The' work pf the American 'Medical 'Mission in;Liberia. is. directed toward the prevention of disease by the removal of:causes' rather than tokard its pure,° : i ' A reduction in the size of the United ^States Public Health
Mission in Liberia' began in late 1948 in anticipation of its dissolution
on June 30, 1949® From that time until the creation,of the Joint Com-'
mission in 1951, the U„ S„ provided-Liberia with no' formal technological „ : ' ' V '• ■ ■ ' ■ assistance in the field of public health,, During its tenure only a very
small dent was made in the. drastic health problems of Liberia, but the way began to be paved for a later, more comprehensive health program.
The activities of the Mission .during-these years stimulated the Liberian
Government to increase its - expenditures for public.: health activities
from. $72,000. in 1944 to $442,000 in 1950, In addition, the Government
-initiated a public' health,information service .in the schools and estab- .
-lished a curriculum for nursing, and medical•.technician training -which
formed the basis for the Tubman National Institute of Medical Arts which - . •' 7 . • ■ ■ ' ' '' ■ ■ ‘ , opened in 1952®
The activities of the Economic Mission during.these same years
were quite varied. In the field of civil, engineering surveys ..were con-
ducted to determine the inadequacies and possible corrective programs in
the transportation, communication, and power 1 systems, For the first
6 , Anderson, op, erb,, p, 269®
■ 1 ■ . ■ • 7® McLaughlin, op, eit®, p, 150, 97 time the entire country •was aerially photographed resulting in the ' ' ' first authoritative maps, . The engineers of .the Economic Mission also I * ‘ V ' carried on reconnaissance surveys for.railroads and road networks and for coastal and inland, shipping, A. team of specialists from the United
States Department of Interior did a study of the possible hydroelectric ' 8 projects in the Republic,
From 1947 to 19^9 the Economic Mission made the first attempt to completely suivey Liberia5s timber resources,. :fhe.report of the forestry survey team included a recommended:forest exploitation plan . involving a $3,2 .million investment-in.saw mills. This proposal was 9 - 1 ' ' I " never implemented.
In the field of agriculture the members of the Economic Mission enjoyed a great deal of direct.contact with .the indigenous Liberians in the field. As a result, ihere -was. an opportunity,for the.agricultural specialists of the Mission to impart practical advice and render.assistance.
. . . on the specific day to day problems of the ..farmers, An. effort .was made to strengthen the Liberian Department of Agriculture, . Field surveys of
« , , soil conditions were conducted, and a number of demonstration centers were established to give the Liberians a first-hand acquaintance with the techniques of modern farming. The,fertilizers, seeds, and other supplies which were used at the demonstration centers were sold to the farmers at cost to encourage their use, and the nucleus of an extension program was inaugurated. The most intensive program was the Dimeh-Amino
------I 8 , . Ibid,, p, 149,
'9 , Ibid,, p, 149, - . 98
Project, isbieh was. directed toward, modifying the total traditional culture pattern, of the area by inducing .the people to participate in cash crop production. This.program was only moderately successful, .
"but it set the stage for the later. Bural Area Development program at 10 Gbanga.
As the work of these two missions progressed, there .occurred a steady shift-of emphasis toward a.second function.'• ‘ - ' As McLaughlin i says:
This new purpose was the drafting, through the coordinated efforts of the two missions and the Liberian Government, of a long-range plan for Liberia's economic development. This activity represented a subtle shift in the purpose and con cept of these missions. Gradually^ the role of technical assistance missions in planning and executing economic develop ment programs became accepted as a permanent part of Liberian economic life,3-1 1 . . ' . .
In 1944 Liberian, officials viewed the two Missions as supple menting Liberia's development, plan, -but the ohly development plan jit existence at that time was a set of thirteen very vague and general ■ 1 1 ' 1 . ■ ' ‘ - ' 1 1 - development objectives. However, in 1946 a development plan was drafted in aeeordan'ce with a provision of the l $ b h Sort Agreement,
, The Plan called, for the expenditure of $25.million, which was to be financed by a fifty year loan with amortization to begin after five years,-^ This was a very bold step in view of the fact that Liberia's national budget had never before exceeded $1,8 million.
10, Ibid,
-11, Ibid,, p, 148,
12, Ibid,, p, 153, 99
This 1946 Plan was rife, with obvious weaknesses. It.completely
failed, to indicate oh the part of the planners,an awareness of the.polit
ical and social impediments to economic development,. The Plan simply
evaded the issue of political reform. The only means it devised for measuring the accomplishments of the Plan,jgas the. number of physical projects completed. Furthermore no financial plan was formulated to supplement the project proposals. The financial and administrative
specialists essential to the formulation of a workable development plan were not included in the formulation of this one. This 1946 Development
Plan, the first real effort made by Liberia to systematically attack the
. i problem of allocation of resources and establishment of priorities, never became operative, but was superceded by another in 1991,
The six year period from 1944 to 1990 laid the groundwork for the implementation of the Point Four Program,in .Liberia. , Road mileage,
in the country increased from 200 in 1938,to.1000. in 1990.^ The . .
Economic Mission introduced the cultivation of soybeans and other legumes together with improved methods of rice production. Poultry
and livestock were imported, and the Republic began to take on some of
i the trappings of a nation determined to emerge from economic stagnation
and make some real efforts-toward modernization. The most notable accom plishment of the Public Health Mission was its .role in .the construction
13, "United States and Liberia Sign Point Four Agreement," U. 8 . Department of State Bulletin, XXIV, (January 1, 1991), P« 27. 100
of a large general clinic and specialized clinics for maternal.and
infant care and for tropical and venereal diseases. Together they
admitted over 2000 patients per month by the end of 1950,
Thus was the. stage set for .the.promulgation of the Point Four
Program in Liberia, The agreement between the United States and .
Liberian Governments was signed on December 21, 1950,"*"5 It called
for a cooperative program for Liberia’s economic development to.be i ' ' jointly undertaken. Under the terms of the ‘memo of understanding‘ provided for the establishment of a Joint Commission for Economic
Development to survey the'economic resources of Liberia and to plan
and advise on the Point Four Program,
The Liberian Government was.pledged to contribute 20%. of its . l6 total national revenues to the cost of this program. According.to
Technical Cooperation Administrator, Henry. G, Bennett, the United
States was to supply the services.of sixty-seven technicians and all
'the equipment they needed to adequately perform their duties. The
.expected annual rate of United States expenditures on the Liberian. program was $850,000,^
14, Ibid,, p. 28.,
15, The. text of the Agreement may be found in United States Department of State Press ..Release ,#1254. dated December 22, 1950,
■ ' . . . 16, "United States and Liberia Sign Point Four Agreement," op. eit., p. 28. ' ,
- 17. Ibid, 101
The total revenue collected by the Liberian Government had
risen from $885,000 in 1938 to about $4 million in 1950» During the
same period the value of the .trade conducted between the U„ So and
Liberia had risen from .million, to $21»5 million. Yet even in
the face of such growth, as this, the,Five Year Plan set up byihe Point
Four Agreement seems somewhat overly.optimistic. It. called for a.
series of development, projects in five, major fields. They were:
Governmental Administration, $1,193,000; Agriculture, $4,226,430;.
Education, $7,120,040; Public Health, $8,773,000; and Engineering, ■ i ' ’■ Vo 1 1 ■ ■ 1, , $11,267,260. y
At the request of the Liberian Government, the United Hations was also asked to cooperate in the field of health and education
through WHO and UNESCO respectively.^ ’
By far the most important, innovation contained in the 1951,
Five Year Plan was the establishment of the Joint Commission for
Economic Development. It was composed of seven Liberian Cabinet
Ministers and six W. S. AID representatives. Its Chairman was a
■ , ' 1 ' ' Liberian, and it had a Liberian administrative secretary and clerical
staff. Its functions were: , -
18.. Ibid.
19. McLaughlin, eg. cit., p. 154.
20. "United States and Liberia Sign Point. Four Agreement," op. cit., p. 28. , , .; 102
1= To allocate funds and technical personnel to various agencies to carry.out assigned.projects5 .
2o To draft specifications and construction or operational contracts and to provide contractors;
3« To make progress inspections of construction work on other . operations carried out .with.development program funds;
h o To determine the timing and completion date of each project;
5= To prepare loan applications for submission to the. Liberian Government, where loans are deemed necessary to finance particular projects; ,
' ' ■ . ; . 6 , To give- specific consideration to the. interests of private investors in order to enqoiirage their participation in the national development plan,?-*- ^ - '•
Russell Uo McLaughlin has summarized the strengths and weaknesses of the 1951 Plan as follows» On the positive side, it provided for a permanent and responsible administrative body. It incorporated a fi nancing program based on internal revenues which would be generated by economic development. It established a .target date. And it utilized experts to draft the plan. Its weaknesses were that the projects called for were not coordinated within a framework of a* total set of objectives and.an all-encompassing.development.strategy. It failed to provide effective guidelines for the setting of either inter or intra sectoral priorities with the result that the projects which received
, . , ' , r , approval were mostly those which were considered first. And despite I the fact that the United Nations and other public and private sources
21, McLaughlin, o£, cit,, pp, 154-155, of assistance were to play an important role in.the implementation of ■ - . the development program, they were not represented at all on the 22 Joint Commission.
In 19559 the plan was revised and extended until 1959= The
Extended Five Year Development Plan was. an amplification of the 1951
Plan, and had a projected cost of. $71=8 million. . There were minor
intra-sectoral shifts in emphasis made, but the major change was the
alteration in the allotment to the public works sector from 35% to 71% 23 - ' - ' of the total.
Probably the most serious drawback to. both of these plans was the nature-and composition of the. Joint Commission. Since the Liberian
r- members were Cabinet.Ministers, the criterion for success for each of them was the advancement of the. program vis -a vis ..his own Department.
Independent and impartial evaluations, of the total program became very
' ' ' ' , difficult to make.
From early i960 until May, 1962, Liberia once more had no
formal development plan. ' During this period aid continued to be
administered nominally by-the Joint Commission, but the. projects.were planned and implemented on an ad hoc basis. During this period also,
the fact that the United Nations. was not represented on the Joint Com mission led to the pattern of making informal, bilateral agreements between various Departments of the Liberian Government and the United
22. Ibid., pp. 155-156.
23. Ibid., p. 156. 1 0k
Nations„ These agreements all required the approval of President
Tubmano This arrangement led inevitably to s6me duplication and to
some.unfilled, gaps since there,was neither a master plan by which to
measure the relative value of individual projects nor was there proyi-
I'Sibni made for a professional and independent evaluation of alterna
tives.
To rectify this situation, the United States suggested a
process which included the participation of all segments of the.Govern ed ment and all facets of the private economy. In response to this pro
posal, a National Planning Agency was set up on May. 8 , 1962. It consists
of two branches, the National-Planning,Council with the President as
Chairman and six Cabinet Ministers. as: members, and the Office , of National
Planning under a Director-General who has,cabinet..rank.and also serves
as the Executive-Seeretary of the NPA.. The NPC is the policy-making
branch, while the ONP provides the professional and technical staff support.
The National Planning Agency is to coordinate all government
programs. which involve the production, of goods and services, foreign .
assistance programs, and foreign.private investment projects. Each
operating Department of the Liberian Government appointed' a Program
24. "President Tubman of Liberia Visits the United States," U. S. Department of State Bulletin, (November 13, 1961), p. 809.
25. Ibid., p. 158. 105
Planning Officer to coordinate the development projects in his Depart ment and to serve, as liaison between the Department and the staff of 26 - ■ the OlPo
The establishment of.the HPA was the.cornerstone of an effective planning process. The.,first step .taken was.to generate a continuous . flow of facts about the Liberian economy, -In.1962. the. first nation-wide census was carried out, and an" economic survey was conducted with.the 27 aid of a team of experts . from Northwestern .University, Another team from- Klein and Saks and a team from Harvard began working on the actual oft development plan. The Liberian political and social system still presented impedi ments to the proper functioning - of the HPA-to maximize development.pros pects. By law the basic.policy decisions, and in practice most of the operating decisions as well, are made by the HPG. This means, that in . actuality they are made by the President. It is axiomatic that once a basic economic policy has been formulated, the setting of criteria and priorities within the broad outlines of established policy should 1 be made by-planning experts who are not hindered; by, inter-departmental rivalries. 'But in this ease, many of.the,people sitting on the HPG are the same ones who were members of the old Joint Commission, and became
26. Ibid,
27. This was the team composed of Eobert W. Glower, George Dalton, Mitchell Harwitz, and-A. A. Walter, authors of Growth Without Development.
28. McLaughlin, op. cit., p. 158. 106 accustomed to a pattern of decision-making in .which the success of their individual department's programs became the ultimate test of the progress of economic development». It is.possible, perhaps even likelys that the contribution of. the MPA.to economic development in
Liberia will be no more than the presentation of a facade of planning activity to provide a cover, for the. same kind of ad hoc decision making that has occurred in the past.
The total of United States grants and loans to Liberia from . ; ■ 29 , "■ • * ’ • l $ k h to the end of 1950 was approximately $28 million. ‘ During the f ,, ' ' ' decade of the 1950’s5 the United States Government, obligated $36.4 ' -, ■ 30 million'in grants and another $51 million in development loans.
From 1948 to 1961 an additional $4l.,3 million was loaned to private ' . . businesses in Liberia by .the Export-Import -Bank and the Development
Loan Fund.3^- In April, 1962, Liberia, became eligible to receive food stuffs under the provisions, of Title I? .of ..Public Law. 480. From 1962 to 1946 Liberia received wheat, flour, rice, and fodder valued at
$18.6 million.32
Altogether, from the time the Point Four Agreement was signed in late 1950 until June, 1964,.United States loan assistance aggregated to $ll6»8 million.In 1965 an additional $9.9 million was committed
29. Glower, erg. cit,, p. 360.
30. Ibid.
31. Ibid. 32. Ibid.; pp. 364-365=
33= McLaughlin, ag. cit., p. l6l. 10? for the construction of a sewerage plant in Monrovia,, Loans from
other public sources received by Liberia since 1955 total $24»4 : ■ • . - million. This brings the total.of foreign public_loans to,$151 ! ■ .1 ■■- ■ ■ , ■: , . . millipn. This money has been distributed among, the Various sectors
as follows: Electric power, $40.5 million; iron ore. mining, $36.4
million; roads and airports., $34.6 million; water and sewer, $l8„3
million; monetary stability, $8.4 million; general development,
$5.5 million; medical facilities, $5.3 million; and educational
facilities, $2.1 million.^
This $151 million figure does not provide an accurate repre
sentation of the expenditures made in the Liberian development effort.
About 40$ of these funds have been extended or committed since 1963, ) V , ' . and much of these have not yet been spent. . Also, $40.5 million of the / ' . ■ United States loans were to private iron ore companies. So as of 1966,
the total of these loans actually spent on government projects was in
the neighborhood of $50 million.
The principal sources.and forms of foreign economic assistance
to Liberia are summarized in the following table.
34. Ibid., pp. 161-162.
35« Ibid., p. 162. TABLE 4
SOURCES AID FORMS OF FOREIGN ECONOMIC ASSISTANCE TO LIBERIA, 1942-1964% ,-(Millions of Dollars) Technical Donor or Lender Total Assistance Loans
United States' ■ 1942-1950 . 27-5 3-5 24-0 1951-1964° 166.2 49-4 116.8
United Nations 5-7 5-7
West Germany 13-5 1.0 12-5
IBRD 3-25 3-25
IMF 8-4 8-4 a " Sources McLaughlin, og, cite, ,• p. l60»
10 Includes Military Assistance of $5»1 million and Public Law 480 loans of $2,4 million, but excludes Peace Corps. c Includes loans committed but unsigned as of June 30, 1964, of $38-7 million- ■ TABLE 5
UNITED STATES TECHNICAL ASSISTANCE TO LIBERIA "BY FIELD OF ACTIVITY, SELECTED YEARS8,
1 “ ' ■' ' ’ : | ' ’ L - x (Thousands of Ue S, Dollars) Activity 1951 1956 i960 1961 1962 1963 1964
Agriculture. 44 304 . 420 48o 640 250
Industry, Mining, aid Labor 112 10 50 480
Health and Sanitation 192 324 120 110 630 270 170.
Education 43 558 670 370 4ooo 3470 1680
Transportation and Communication 255 280 370 • 240 66 — Public Administration 25 490 550 3100 2330 2130
General and Community Development 395 ; 30 780 890 850 1870 940 Public Safety 270 150 550 370
Other 153 l6l T
Total 827 1782 2760 3050 10660 8550 6020
a Sources McLaughlin; op. cit., p, l63« 110
Peace Oorps volunteers have teem In .service in Liberia since 1 ' ' . ■ i ■ ■ . ; late 1962. In addition, aid was provided by various private American organizations- such as the nearly two dozen active mission groups in the country, and business firms providing:substantial fringe benefits, and private service groups_like.CAREo
Since 1951, the United States has provided military assistance to Liberia under the Mutual Security Program, United States military officers have served as advisors to the Liberian Army and Coast Guard; and since October, i960, the United States has provided military material and arranged for Liberia to purchase United States military equipment and supplies. CHAPTER 8
CONCLUSIONS
The United States has experienced a long and unique relation ship with the Republic of Liberia. The U. S. was principally re sponsible for the foundation of Liberia, and has always been the primary agent of assistance to the African Republic. It remains how to survey the distance traveled on the road to development and, so far as possible, assess what remains to be done.
During the 1950’s the rate of expansion of the Liberian economy exceeded that of almost any other country in the world. But at the end of this decade and still Liberia was by any measure a severely underdeveloped country. However, unlike most other African countries, Liberia possesses the physical resources necessary to finance an extremely ambitious program of economic development. It is a very small country, sparsely populated, has fertile soil and plentiful rainfall, and vast reserves of rich iron ore deposits.
Glower, et al maintain that: "The economic development of Liberia is not likely to be inhibited by relative scarcities of land or other 1 natural resources for at least the next half century."
1. Glower, op. cit., p. 3- 1
111 But very few meaningful advances have been made in.trans forming the subsistence sector of the Liberian economy. About two-thirds of the population still live in tribal communities and participate little or not at all in the money sector. Less than ten 2 per cent of the total Liberian population is literate.
The slow pace of the Liberian development effort is attributable to a number of congenital maladies. The research and statistical activities carried on by the Government are wholly inadequate for effective planning. The tedious process of record-keeping has been 3 a shambles. There has been, in spite of the planning efforts:of the
Joint Commission and the HPA, a sometimes obvious misallocation of ' . resources, for example the construction of a sumptions new Presidential
Mansion wken there•are still very few farm to market roads in the interior. - I t " / Perhaps the outstanding impediment to development in Liberia is the existence of a two-part social system. Despite some thirty years of effort under President Tubman’s Unification Policy, there remains a virtual aristocracy composed of the descendants of the.
Americo-Liberians. The tribal majority are still subject to a different socio-legal system which restricts than from becoming progressively
2. Ibid., p. 4.
3- Ibid., p.. 98. 113 involved in new economic activities and acquiring modern values.
If they were to emerge from their tribal backwardness significantly, it would probably result in their vehement demands for an effective voice in the political management of the Republic,
But this situation is precisely what the Americo-Liberians wish to avoid. Accordingly, only those changes in the economic and social structure of the country which will not seriously threaten the political hegemony of the settlers are allowed to occur; and these changes have simply been insufficient to transform Liberia economically, and will undoubtedly remain so. The over-riding goal of the minority has been to retain political control and to share the benefits among themselves. Thus the primary obstacle, to constructive change and progressive adaptation has been the weakness of reform forces working within the Government and the virtual absence of these forces else where,
McLaughlin has contended that:
The conflicting tugs of the traditional culture on the one hand, and the fascination of modern technology and the attraction of rising real incomes on the other have caused all facets of Liberian society to be afflicted with the frustrations and conflicts caused by these antagonistic pulls, .
The available evidence indicates, however, that at least for the
Americo-Liberians, the choice has not been unmanageable.
4, McLaughlin, op, cit,, p, 179, lllf
The Liberian economic structure9 as it existed in 1940, was profoundly shocked by the activities of the United States in that country during the Second World War. The injection of massive U. S. involvement was a tremendous boost to Liberian development. This activity assumes its real importance when it is viewed in conjunction with the investment activities of American industries. Several factors contributed to the American investment boom in the immediate post war era. There began to be accumulated a substantial knowledge, previously lacking, of the natural resources of Liberia, together with an increasing concern for the; development prospects of underdeveloped countries. In addition, a number of technological developments occurred in this period which made life in West Africa tolerable for
Americans and Europeans for the first time.
In 1940, the number of Liberians in the wage sector of the economy was around 20,000, and 18,000 of these worked for Firestone.
Thus only about 13% of the population were involved, compared to i 5 ' • ■ . some 35% in 1966. There is still, however, a severe shortage of skilled and semi-skilled labor in Liberia, indicating that a high priority in development planning must be attached to the development of the country’s human resources.
5. Ibid., p. 183. 115
The importance of foreign trade to the Liherian economy
can be seen in the ratio of trade to national income. In i960, exports were nearly 5^% of the gross domestic money income and
.. . 6 , imports 45%« This high dependence on trade places the economy at the mercy of market fluctuations in the prices of its two principal export commodities, iron ore and rubber, which together accounted for 88% of Liberian exports in i960.
In i960 both iron ore and rubber prices fell, forcing the government into the renegotiation of ah International Monetary Fund loan and into a sort of economic retrenchment in the form of an austerity program. This instance provided a rather vivid example of the way in which economic dependence upon foreign concessions engaged; in extractive indtistry can be deterimental to economic growth. ,
Foreign business concerns can stimulate the domestic economy of a country in a number of ways,1 First,, foreign concessions can provide incentives to private domestic investment by purchasing from 1 local firms. In this regard, the foreign businesses have contributed little, since the only domestically purchased commodity is labor.
Another way is by the concessions extending external economies to local businesses. This has -been done to some extent by the construction
6 . Ibid., p. 186, ; u6 of roads, bridges, etc., and the aid rendered by Firestone to in- dependent rubber growers. A third form, of contribution is the alteration of economic institutions in a way favorable to private investment activity, .such as the sale of the Bank of Monrovia to the First National City Bank of New York and the emphasis in the schools set up by the various concessions on a functional curriculum.
The most important way in which foreign businesses stimulate .the
Liberian economy is by the gradual but pervasive influence which . they exercise in the ste.ady erosion of the traditional culture in favor of the adoption of- the. institutional and mental trappings of modernity. '. .
In regard to the direct economic assistance provided by the
United States in the form of grants and loans a number of general conclusions may be seen to emerge from this study. The most obvious one is that the U. S.. has been the principal supplier ,of aid to
Liberia and will continue to be. This may be taken as general sub stantiation of the proposition that Liberia has occupied a special position vis a vis the U. S. !This proposition is lent further credence by the fact that the other suppliers of aid to Liberia have generally conceded the existence of this special relationship, and have been content to follow the example of the United States in their own patterns of assistance. 117
Secondly9 a failure to adapt adequately to local conditions has been responsible for a number of projects achieving only sub-
optinram. success. As Slower says:
United States aid officials are becoming aware of the problems which stem from their country's dominance of Liberian external aid.' Since 1962 there has been an effort by the U. S. to separate itself from aid administration, eyen-thdugh it may continue to finance a il or most of a project. The increased •, use of contract rather than direct-hire personnel is one result of this awareness;;the channeling of funds, through. U. N. agencies is another.?
Foreign aid has not attacked all existing barriers to economic development because not all of them are fully understood.; and some are plainly unassailable by the weapon of aid. It cannot, alter the attitudes of the tribal majority toward modernization nor those of the Americo-Liberians toward real democracy. External assistance may serve as the catalyst for bringing projects to com pletion and plans to fruition3 but only. .Liberians3 in the last analysiss, can define national goals and choose between alternative development strategies.
. United States advisers have been guilty at times in the past of harboring a kind of Marshall Plan mentality which incorrectly dictates that the problems of Liberia and other underdeveloped countries are closely akin to those of post war Europe. But Liberia, with its largely illiterate and unskilled people and its lack of a
7.' Glower, op. eit., p. 175» ll8 viable eeoiaomie infrastrmct-ares. most meeds not simply money but
improved institutional procedures and labor skills.
American experience in Liberia should also have taught that
aid which is extended and received on an ad hoc basis in the absence
of a •national plan formulated on reliable data and a reasonably
defined development strategy cannot succeed at anything like an
optimum level in achieving development. In addition, unless the habits
of.consumption and saving, and the institutions for accumulating,' lending, and investing, money can be adapted to the building and maintenance of domestic capital, foreign aid can be of only moderate benefit. "A permanent basis for higher living standards must be created within the society; indeed, this is the very meaning of
I' ' ' economic development." Unless the chief nurture of growth is in-
... 8 digenous, the society is constantly exposed to retrogression." It remains to be seen whether this can be done in Liberia.
According to Glower, et al, a set of conditions emerges from aid activities in Liberia to explain why some succeeded and:otherb
failed. Projects which exhibited a high degree of sudcess possessed
at least jone and usually several of the following characteristics:
I- '' ' ■ ' (l) The project centered about skills which were.relatively . easy to transfer, either because the techniques them- . selves were simple or because the necessary educated manpower to absorb them was available;
8 . H. S. Buchanan and Ellis, Approaches to Economic Develop ment, (New York: 20th Century Fund, 1955)? P* 301. r ~~ : 119
(2) The project was administratively some distance from a major policy making center;
(3) The project had a clearly:defined and finite objective;
(4)' The project received enthusiastic support from the. Liberian Government.9
The decline of prices of the principal export commodities and consequent decline in the taxable revenues of the concessions and
Liberian share of royalties produced1a budgetary crisis in Liberia which was at its high point in 1965. The nature of the crisis was the excess o f :fixed expenditures plus the cost of development projects over total revenue. The difference has been called the ’development gap.' - ' ~-
McLaughlin has provided two useful tables for understanding the extent of this problem.
9« Glower, opi cit., p. 176. 120
TABLE 6
PLANNED PUBLIC CAPITAL PROJECTS BY SECTOR IN LIBERIA, 1 9 6 b - 1 9 6 Q &
(thousand of dollars) First Priority „ Second Priority Sector Total Cost Total Cost \ Education . 5689 6327
Agriculture 969 4000
Public Health 6924 1550
Highways 36216 14021
University of Liberia l4l6 --
Interior . • “ * * “ i 300
Post Office ' 4968 •
Commerce (airfields) 6093
Liberian Information Service . 40
Monrovia Sanitation 133 —
Defense 436
Public Utilities 35000 9000
Total ' 91791 ■ ..... 41291 a Source: McLaughlin, op. cit., p. 134-135.
In 1964, of the! $92 million in capital projects receiving first priority, $15.9 had already been spent. Of the remainder,. • ' 1 $57 million was■covered by foreign credits, leaving $19 million for this period to be.provided by current revenues. The completion 121 of these projects will.eamse the regular operating hudget to increase by million in 1968 over 1964. ^ The estimated * development gap".based on revenue forecasts made in 1964 is shorn in the following table: • , TABLE 7
ESTIMATION OF TEE DEVELOPMENT GAP IN LIBERIA 1965-1968^ > - . ' < -
- (millions of dollars) Increase in NonT-Developmegt Capital Costs Governmental Year _____ Budget Base for Projects______Operating Cost
1965 39.9 .! 7.3 ' 1.1 .1966 40.5 7.7 2.0
1967 40.9 1.7 2.7 1968 40.9 1.0 3.0
Revenue Estimate Surplus or Deficit
1965. 41.0 -7.3
1966 43.0 , : -7.2
1967 . 46.0 t o .7 1968 50.0 t 5 .l a Source: McLaughlin, op. cit„, p. 135: b 1964 non-development budget of $29,6 million, plus projected debt service, •
10 . Ibid., p. 135 This table shows a halance appearing im 1967# hut this outcome is predicated upon the completion of high priority projects undertaken as of 1964 with no additional projects being undertaken.
It is highly unlikely that none of the |4l million worth of second priority projects in 1964 have been begun.
■ With all its difficulties, economic and fiscal as well as the more serious long fun social and political problems, Liberia. has begun the inexorable trek to modernization. The Americo-Liberians may yet be unaware that there is no retreat from this course once it has been chosen. Nor can they be assured of the permanent ability to guide their country’s progress at their own rate in accordance with their own whims. The United States has played a very important role in the choosing of this.course and provided the impetus for its beginning and the constant prodding and encouragement for its con tinuation. The Rostovian take-off point for Liberia may not yet be in sight, but there will be no turning back.
It is, of course,"a hazardous undertaking to attempt to formulate general conclusions on the basis of a case study.. This is especially true when the case in point is unique in as many ways as is the Liberian experience. Yet, Liberia shares with other under developed countries a number of common characteristics. In addition, the United States may be assumed to have substantially the same objectives based On substantially the same,motivations for aiding the
Liberian development effort as we do in other countries. Therefore, 123 there are some lessons that cam he learned from the Liberian experience.
These. general conclusions must be prefaced, however, with the caveat that they are to be interpreted not as established facts, but rather as general propositions which may be largely substantiated or sig nificantly modified by additional research.
The first such proposition is that, while in- one sense economic development may be a prerequisite for political development, the inverse, of this relationship is also valid. The Americo-Liberian dominance of the political system in Liberia and their concomitant desire to retain control have combined to effectively cut off the tribal majority from contact with the forces that undermine traditionalism and inculcate the new habits, techniques,; and modes of thinking that are essential to modernization.
Secondly, the process of development in Liberia demonstrates that modernization cannot be imported nor can it be purchased solely with the currency of foreign economic assistance. There must be an internal leadership capable of stimulating the will to progress.
Foreign aid must be viewed as essentially complementary. It cannot be optimally effective without the domestic leadership necessary to transform external assistance into internal growth. In the final analysis, modernization can proceed in Liberia only at the behest of
Liberians. The United States can provide assistance, but we cannot make the basic decisions about development in Liberia for the Liberians. Our role in the development,efforts of underdeveloped, countries must he to advise and to assist. It cannot he to determine or to decide.
If our attempts to stimulate and assist development are to he successful; they, must he based not' only ,on the political hut also on the. economic realities of recipient countries. Whatever aid we render must be based on an- objective assessment of the stage of development. and of. the real needs of the recipient. $© be effective, our assistance must be keyed to the existing situation. A country in which nine of every ten people are illiterate and two of every three are still engaged in tribal subsistence farming has a. set of develop- meat needs significantly different from those of Europe in 1945. s e l e c t e d bibliography
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"U. S.— Liberian Agreement Provides Radio Communications." State Depart ment Bulletin. Vol. XXIV (April 9 , 1951)» p. 588.
"U. S. Lends Liberia $3 Million for Telecommunications Facilities." State Department Bulletin. Vol. XL (February 16, 1959)9 P« 247. 139 "Uo So Negro Troops Are Based in Liberia,,1 Life. Vol. XIII (December 21, W ) , pp. 36-37. .
Vamdereook, J. W. "High Hats In Liberia." World Today, Vol. XLIX (December, 1926), pp. 51-57.
Villard, H, S, "American Relations with Africa," Vital Speeches. Vol. IX (September 15, 19^3), pp. 722-725. . >
_ . "Liberia: Link- in Democracy1* Lifeline." Christian Science i. Monitor Magazine. (October 4,. 194-1), p. 3.
. . . '. ___. "Rubber-Cushioned Liberia." National Geographic. Vol. XCIII (February, 1948), pp. 201-228. : i ' . -
, "War Comes to the. Negro Republic." Travel. Vol. IXXX (Bferch, 1943), pp. 16-19. ’
Walker, W. F. "Why Liberia Wants America8s Help." Independent. Vol. LXVII;(January 1, 1908), pp. 70-72, ' , ,
Walton, L. A, "Liberia’s New Industrial Development»" Current History, Vol. XXX (April, 1929), pp. 108-114.
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"Why We Lend Liberia $5,000,000." Literary Digest, Vol. LXXIII (June 3, 1922), p. 17. ; _
Wood, S. "Uncle Sam’s African Understudy." World Outlook. Vol. IV (February, 1918), p. 15. ■ ■
Woodson, C. G-. "Liberia’s Century of Survival," Journal of Negro History. Vol. XXXII (April, 1947), pp. 252-2547" ! '
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MISCELLANEOUS'
Republic of Liberia, Department of State, ‘ The Liberian Yearbook. London: Diplomatic Press and Publishing Company, annually. Republic of Liberia, Department of State= Invest, Trade, and Prosper with Liberia* London: Diplomatic Press and Publishing Coi 1957.o
United Rations„ Department of Economic Affairs« Methods of Financing Economic Development in Underdeveloped Areas, Hew York: 1949*
Unitqd Rations« Department of Economic and Social Affairs * Economic - iSurvey of Africa since 1950° New York: 1959°
• ' ' . ' . ' United States Army, Area Handbook for Liberia, Washington, D, C,: Government Printing Office, July, 1964,
United States Congress, Senate, Committee on Foreign Relations, Develop ment Programs in Africa South of the Sahara, 84th Congress, 2nd Session, Staff Study No, 8 , Washington, D, C,; Government Print ing Office, 1956°
United Stated Department of State„ Executive Agreement Series #275. ' Department of State Publication #1859. ' ~