The_Open_Door_deel1

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1 per cent export tax, plus $ 3,000 rental on 50,000 acres, a
total revenue of $ 43,320, which amount was reported to be not
even sufficient to pay the American officials appointed under the
Loan Agreement since their salaries amounted to $ 53,650. If
instead of this price of 20 cents per pound the rubber price of
the early 1930's would be used, which was only 5i cents per pound,
the Liberian Revenue would have been only | 13,188 (24). Even if
the $ 6,000 rental for the Mount Barclay Plantation were added
this would only reduce but not eliminate the unfavourable
difference between revenues and expenditures under the Loan and
Planting Agreement. The consideration that the U.S. officials
also had to be paid during the period before the rubber trees
would be productive (1927 - 1934) makes this picture look still
worse. Total expenditures under the Loan Agreement (salaries,
interest charges, sinking fund) were estimated at | 260,000 a year,
excluding the commissions due to the Fiscal Agent, the National
City Bank of New York, or about 40 per cent of the expenditures of
the Liberian Government in 1925, which had been $ 591,420 (25).
The 193O's
In 1926 - 1927 the Firestone Plantations Company started cutting
trees and clearing thousands of acres, after which tens of
thousands of young rubber trees were planted. As it takes seven
years for a rubber tree to mature and be ready for tapping, by the
time the first latex dripped from the trees the price of rubber
had fallen from its level of 48 cents per pound in 1926 to 5i
cents per pound in the early 1^930' s. The economic depression of
these years greatly affected Liberia's trade and subsequently the
intake of customs duties, the main source of revenue (see Chapter
10). The deteriorating financial situation of the country made it
impossible, among other things, to pay government officials and
employees a single cent for six to eight consecutive months (26).
Hence President Edwin Barclay refused to act in conformity with
the Financial Advisor's demands in 1931 and the following year
payments under the 1926 Loan were temporarily suspended. On December
23, 1932 President Barclay approved the "Moratorium Act (27),
The Financial Advisor withheld his approval of the nation's
budget then and the Loan officials refused to authorize the
withdrawal of Government funds in keeping with the Depository
Agreement then existing, thus making _it impossible for the
Government to maintain the barest minimum services. The Government
opposed stating that no one can be expected to commit suicide
because of the theoretical legal rights of another (28). Still in
the same year it opened a new depository with Messrs, West and
Company, an old trading firm, to bring some relief to the situation
of financial strangulation (29). In January 1933 President Barclay
dismissed the (American) Supervisor of Internal Revenue.
After the Liberian Government had thus violated the Loan Agreement
Harvey Firestone tried to persuade the U.S. Government to interfere
directly in Liberian affairs and to invade the country, but the
American Government refused because it had other priorities at the
time, notably in South America (30). However, diplomatic relations