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with Germany and hence affected the Liberian economy and Public
Finance significantly. Exports fell from $ 1.3 million to $ 0.6
million between 1913 and 1917. Particularly the exports of palm
kernels, palm oil, piassava, coffee and calabar beans fell. The
intake from customs revenues in the same period fell from $ 0.5
million to $ 0.1 million (3).
After the war Liberia gradually recovered from its effects. International
trade increased as did customs receipts. In 1925 exports
had risen to | 1.9 million, the highest level in the 1922
- 1932 period (4), and total internal revenues had almost reached
the I 1 million mark (see chapter 3). The following year the
Government signed the Planting and Loan Agreements with Firestone.
The Firestone Era
The arrival of Firestone changed the volume, value, composition,
and direction of Liberia's international trade. Imports, which
since 1922 had exceeded the value of exports, continued to increase
at an even higher rate and reached a maximum in 1928,
with a recorded value of over $ 4 million (5). Firestone's investments
and the imports by local trading houses which anticipated
the expected increase in purchasing power of the labour
force employed by the rubber company were the main causes of
this increase. But before the Firestone Plantation could go into
production Liberia was again hit by a crisis which was also
caused by economic conditions abroad. The Depression of the early
1930's reduced both international trade and government revenues
(see chapter 10). Exports, which before the World Economic Crisis
had amounted to $ 1.5 million, in 1934 were at their lowest level:
as low as $ 0.5 million. But the following year exports had gone
up by 35.8 percent to $ 0.7 million, whereas imports had increased
from $ 0.9 million to $ 1.3 million, or a 51.3 percent increase,
The major reason for this was that in 1934 Firestone had started
the tapping of its rubber trees, which after about seven years
were now maturing. On the other hand, the increased activities on
the rubber plantation were also the major factor in the increase
of imports of machinery, vehicles, gasoline, kerosine etc.
The impact of Firestone on Liberia's foreign trade is further
demonstrated by the fact that in 1935, for the first time in Liberia's
history, rubber exports ranked first. Rubber exports had
risen from an insignificant $ 31,300 in 1934 to a relatively impressive
$ 223,183 in 1935, while coffee exports had fallen from
$242,043 (1934) to $141,655 (1935) and cocoa from $ 27,492 (1934)
to $ 16,325 (1935). Also, the U.S.A. had become Liberia's main
trading partner in that year (1935), a position it was to occupy
for nearly forty years. Germany, however, remained the major buyer
of Liberian products and Great Britain retained first place as a
source of imports (6),,
The increase in the economic and trading activities made an increase
of financial means imperative. Since the local money supply,
was insufficient to finance the growing number of financial
transactions, the Firestone Rubber Plantation resorted to the importation
of money to pay its labourers. Given the country of