One of the most serious dangers of Liberia lies in its isolation; it needs contact; everything that tends toward an increase of contact with the outside world is good. Liberia needs ideas, friends, interchange; otherwise stagnation is inevitable—and death. She must receive these aids either from Europe or from America; she will of course receive them from both; but the source of the greater part of her inspiration and ideals must be on this side of the Atlantic and from our people of color. Immigration from America, whether small or great, must necessarily be helpful. If great and constant, difficulties will be lightened and helpful bonds strengthened.
If the temporary management in the hands of others of a part of our governmental machinery will result in actual and permanent independence and international respect, which I firmly believe will be the outcome, then it becomes our imperative duty as patriotic citizens to make such a necessary and noble sacrifice.—Daniel E. Howard.
THE FOREIGN DEBT OF THE REPUBLIC.
THE LOAN OF 1870.
On January 26, 1870, the Legislature authorized President Edward J. Roye to negotiate a loan not exceeding £100,000, at not more than 7 per cent interest; the bonds were to run for fifteen years, and three years’ interest advanced might be deducted. Of the sum to be received upon this loan £20,000 was to be used in buying up all the checks, scripts, currency debentures, and government paper of whatever kind then afloat; £20,000 more was to be deposited securely as a basis for the issue of a paper currency in what were to be known as Treasury Notes; the balance of the proceeds of the loan was to be deposited in some reliable bank as an emergency fund to be drawn upon at need by special act of the Legislature.
At the time when this action of the Legislature was taken, President Roye was about to go to England; it was supposed that he would attend to the business while in London, and that considerable expense would be saved to the nation by his personal attention to the details of the arrangement; for some reason or other, he did not take up the matter while he was absent. On his return to Monrovia, however, he proceeded to secure the loan. He appointed David Chinery, at that time consul for Liberia in London, Henry V. Johnson, Sr., and W. S. Anderson, commissioners—the two latter being sent to London for the purpose—to negotiate the loan. President Roye should of course have submitted this whole matter to the Legislature; there was considerable objection to the loan, and no serious steps should have been taken regarding it without the authorization of the legislative body. The commissioners succeeded in negotiating the loan for £100,000 at 7 per cent interest, at 30 per cent below par; three years’ interest were deducted from the £70,000, leaving a balance of £49,000 to be placed to the credit of the commissioners. “Then followed,” to quote the words of President Roberts, “a system of charges, speculations, and frauds unparalleled, I presume, in any public loan transactions of modern times.” No sooner had the news of the negotiation reached President Roye, than he commenced to draw against it for himself and others, not waiting for any part of it to be paid into the treasury of the Republic for the purposes specified in the act, and before the Legislature had accepted the loan or taken any action in regard to it. More than that, without legislative authority, he sent an order drawn by the Secretary of the Treasury—a member of his own family—approved by himself for £10,000 value of merchandise, alleging that this was on account of the government. Mr. Chinery, in filling this order, sent merchandise invoiced at more than £14,000, including transportation, shipping-charges, freight, insurance, etc., most of the articles being charged at amounts in excess of their market value, many of them inferior in quality, and some nearly, and others entirely, useless in Liberia. How much was actually realized of this loan no one knows; Sir Harry Johnston says £27,000; Ferguson (from whom we draw most of the particulars regarding this transaction) says £17,903. In return for it, at least £80,000 in bonds were issued—Sir Harry Johnston says perhaps the whole £100,000.
The moment was one of political disturbance. In 1869 there had been an effort to amend the constitution so as to extend the office of President from a term of two years to one of four; the effort failed. In May, 1871, when his two years had elapsed, Roye attempted to continue himself in power for two years longer; a shadow of an excuse for this usurpation was found in this attempted passing of an amendment. This bold coup, together with the dissatisfaction regarding the loan, led to his being hurled from power. Notice of the disturbed condition of the Republic was at once sent to the representative of Liberia in London, and to the bondholders; the newly established government ordered all drafts, etc., for money received on account of the loan to be stopped, countermanded the orders for goods, and demanded a statu quo until the Legislature should have a chance to act; legal proceedings were taken against Commissioners Johnson and Anderson; Chinery was discharged from his office as Liberian Consul in London; Mr. John Jackson was appointed Consul-General in his place and took charge of matters. So palpable was the mismanagement of this whole transaction in London, and so extravagant had been the charges and other outlays connected with it, that Consul Jackson took legal proceedings to protect the interests of the Republic.
Through a period of almost thirty years, the matter of this loan was constantly agitated, and it was only in 1898 that the Liberian Consul, Henry Hayman, was able to bring about a final arrangement of the unhappy affair. At that time the Liberian Government recognized its responsibility to the amount of £80,000; it agreed to begin payment at once upon the bonds—paying interest at the rate of 3 per cent the first three years, 4 per cent for the following three years, and 5 per cent thereafter until both the principal and interest be fully paid; after that, the back interests would be assumed at 5 per cent. Since this adjustment, the Liberian Government has regularly and honorably met its interest payments. Sir Harry Johnston, in his great work on Liberia, speaks vigorously and frankly regarding this loan of 1870, which was a disgraceful operation for British financiers.