The_Open_Door_deel1

-39-
Therefore President Howard of Liberia (1912 - 1920) declared war
on Germany in 1917 (following the example set by the U.S.
Government in the same year) Monrovia was shelled by a German
gun-boat, in September 1917, as a retaliation for the Liberian
decision. There was no possibility for Liberia to defend itself
against this attack. (One of the results of this attack was a
Legislative decision, in 1920, to build as soon as possible a new
capital in the interior (127). Like many other decisions of the
Liberian Legislature, this Act was never implemented (128).
Following these events President Howard signed a Loan Agreement
in 1917-with the Bank for British West Africa, the only bank in
the country (after a German Bank had ceased its operations
following the Liberian war declaration). Thus an amount of
$ 100,000 was obtained. But even the new loan did not change much.
For a second time contacted for a loan, the British Bank
introduced several conditions which were unacceptable to the
Liberian Government. Among others, it demanded the appointment of
Bank officials to Government positions (129). Shortly thereafter,
President Howard was successful in securing a commitment of the
U.S. Government for a $ 5 million Loan.
At the end of the decade the arrears of interest on the 1912 Loan
amounted to $ 189,000, the debt to the Bank for British West
Africa had exceeded the $ 100,000 ceiling established by the 1917
Loan Agreement and amounted to $ 100,646.35, the Government owed
the U.S. Government $ 35,000, the arrears of salaries to the
Frontier Force had increased to $ 118,544 while there existed an
internal floating debt of $ 600,000 (130).
In 1920 a Liberian mission which included the country's new
President, Charles King (born in Monrovia, but from Sierra
Leonean parents)(131), agreed with the U.S. Government to place
the control over Liberia's expenditures and native affairs in the
hands of 13 Americans, The Frontier Force would also be placed
under U.S. control. In 1921 the number of Americans was increased
from 13 to 22. The Liberian Legislature ratified the Agreement in
1922 although many protests were heard against these conditions
(132). However, later the U.S. Senate refused to ratify the Loan
Agreement, thereby paving the way for Firestone to enter Liberia.
When Harvey Firestone, supported by U.S. Government officials,
showed interest in establishing a rubber plantation in Liberia,
President King was very enthousiastic and, after some years of
negotiations, Firestone was granted its famous concession (see
Chapter 3 for details). However, the nature of the Firestone
investment, a reaction to the restrictive British Stevenson Plan,
made it imperative for the rubber company to have some political
control over the Liberian Government. This explains why the 1926
Planting Agreement was tied to a Loan Agreement through which
Liberia lost complete control over its Public Finance and part
of its national sovereignty. Its Public Debt which stood at some
$ 2 million during the negotiations and which for almost 90%
carried an interest rate of 5 per cent (or less) per year was
thus replaced by a 7 per cent interest loan with a maturity of 40