Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-09-01
BACKGROUND OF EVENTS
BY PAUL Y. COLLINS.

roads through wild territory. SO Mr..
Firfstcns agreed 10 loCn the govern
ment $4,000 600, under the E ipulstlon
that it must devote the first $1,000 600
to clearing off the old Indebtedness, At
par. and the balance to public improve
ments, II might have been possible 10
b,iv up the old bonds at SIS cents. but
they were paid of at par, including &C
crued interest. So was all outstanding
floating Indebtedness, as rapidly as the
claims could be authenticated; some are
yet awaiting proof of claim, but the
cash is in bank to pay them. Up IN
date. Mr.. Firestone's actual loan
amounts to less than s2000,000. but
the other S3.000000 mot drawing any
interest in the meantime) Is pledged to
be produced as soon as the government
shows It has use for II. the use being
stipulated for public improvements. not
current expenses
In short, the bankrupt country mas
been capitalized. at th2 current rate OF
interest. in place Of remaining credit
less end with no hope OF development
What differences did IL make as tc
whether the old interest was TO be per
cent or per cent. SO lorg as nothing st
all could be paid? But II makes
huge difference when the worthless
bonds we're paid of at 100 per cent ana
credit fully restored.
- + y
The Firestone agreement covering the
rubber lease provides for arbitration IN
case Of dispute. after Libsrian courts
have tried the legal questions involved
For that arbitration. the Libsrlan gov
eminent will name one arbitrator, the
Firestone interests will nominate an
other and the Supreme Court of Liberia
the third.
In case Of any dispute connected with
the loan. the Liberian government ana
the FireStone interests will each ncnll-
nate an arbitrator. and the Department
of State of the United States viii name
the third.
The loan Is secured by the cuStcrS
revenue. which is collected by an AMIR
.can financial adviser, who deductS tn"
cost Of collecting. and pays the accrued
interest on the loan and hands the ball
ance over to the Liberian government.
He has nothing to do with the internal
revenue. Prof Buell. to the contrary not
withstanding. The adviser approves
or disapproves the general budget, has-
ing his action on whether proposed cX-
penditures. including road building and
other public improvements. are juStited
BY the visible resources. He cannot dc
tate details OF what improvements are
to he made. nor any other details OF
government
Every observer at all familiar with
statecraft knows that tho Department
Of Commerce has had nothing whatever
tn do with the FireStons deals; they
were private business. The Department
of State is the only branch of our Gov
eminent having relations with foreign
governments. and all that II has had 20
do with the matter Is tn agree 70 ap-
point one OF three arbitrstcrS IN case
Of dispute over the loan. The bonds
representing this loan will he sold to
many Americans This feet that Her.
bert Hoover, then Secretary of Com
merce. is now nominee for the preSl-
dency makes il quite desirable in some
quarters TO throw a smoke screen over
the matter in which ho might be made
TO be hiding Scmsthlng.
y
Yes, Secretary Hoover did have
something to Go. not with the Lihsrian
deal but with ths rubber situation Of
two or three years ago, This British
government had undertaken 20 create
national monopoly on rubber by re-
stricting the exports from Malaga md
Ceylon II would arbitrarily Ak prices
around 30 cents 4 pound. letting out
exports above q certain percentage ac-
ccrdlnC 10 the fluctuations CT world
markets So rubber rose from rs cents
un to $50 r pound. and tbs United
States uses more than rs per cent Of
the world OUTPUT OF rubber That Sri
sh monopoly was bearing hard ups,
nsers Of automobile tires snd everv
American owuer was payine Into the
Golfers c5 Great Britain about 50 "a
every 81 worth Of rubber tires ne "a.
using or wha. good would oas Sec.
Rotary Of Commerce be II he slept
upon such an intolerahle squeeze
Secretary Hoover reGomm eneAd 10
CouGresS an appropriation Of 100000
for Investigations Ct the possibilities Of
growing rubber unau other territory
outside Of British control Congress
appropriated accordingly, and SO Mr.
Firestone found the soil OF Liberia
promising and he made his investment
Henry Ford got concession from Brazil
nearly four times as large as that Of
700, 600 acres In the ANA
son valley II win take seven years
for rubber trees 20 eome into b~srins,
but the British have discoveries thgt
restrictive monnpolv IL eaocmed, and
after an Investigation begun last Feb
ruarv they announced in April that all
Of exports will be Cancelled
next November Nes, Herbert Hoover
,earS lust thar responsibility nf break
ne the British extortinM, which vas
sene nc An,"ren~s NJ making tires end
~ ether rsNbh,r goods cost fnuf times
.heR e~orNrsis sslue. Nav make the
mes OF o."
tCansrt&ht lts'S ~ raul Calltasl