The_Open_Door_deel1

CHAPTER 13
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THE CHANGE FROM A SUBSISTENCE ECONOMY
INTO A DEVELOPING ECONOMY 1900 - 1979
THE INCREASE IN INTERNATIONAL TRADE
. In the preceding chapter the developments were discussed which
took place in the transportation and communication sectors. The
major object all of these infrastructural facilities aimed at
was the export of the country's produce which was largely made
up of agricultural and mineral products. This explains their
development concurrently with the growth of international trade.
The Early 20th Century
In the beginning of the present century there were hardly any
facilities furthering international trade; hence, export as well
as import activities were strictly limited. At that time most of
the inland produce was raised by the tribal people and formed
part of their subsistence economy. In the coastal areas, and
notably in and around the Americo-Liberian settlements, production
for the market took place - on a very limited scale.
The main characteristic of Liberia's monetary economy then was
its being virtually limited to export oriented agricultural activities.
At the turn of the century it was at its lowest point.
The two main export commodities, sugar cane and coffee, were no
longer cultivated. The most important causes for this decline
were (1) the economic recession of the late 1890's which reduced
the demand for these products, (2) the increased competition of
new producers, and (3) Liberia's internal labour problem.
The fall in exports in turn reduced the intake of customs revenues
of the Liberian Treasury and aggravated its already precarious
financial situation.
The early part of the 1910's, however, brought some improvements.
In 1905 total exports had amounted to a mere $ 567,000 but by
the end of the decade they had already risen to | 1.1 million
(1). Unfortunately, this favourable tendency was halted by international
developments. At the outbreak of the First World War
the Liberian Government had officially adopted a neutral policy
since it did not want to get involved in this inter-European conflict:
one of the belligerent nations, Germany, was its main
trading partner. This Liberian position caused the British Government
to impose a blockade of Liberia which made all trade
with Germany impossible. Consequently, the export of coffee
which in 1913 had reached the same level as before the economic
crisis of the late 1890's (2) suffered a more than 50 percent
drop and in 1917 amounted to only 760,000 pounds (see Annex 40).
The English blockade of Liberia virtually eliminated all trade