Ambassador Reid to the Secretary of State.

No. 1213.]

Sir: With reference to my dispatch No. 1205 of the 9th instant, transmitting a copy of my note to the foreign office for the maintenance of the status quo in Liberia, I have the honor to inclose herewith a copy of the foreign office reply, dated the 14th instant, in which it is stated that the British Government had already decided not to press their boundary negotiations with Liberia until the Government of the United States had announced the fine of action they proposed to adopt as a result of the recent visit of the American commissioners to Liberia.

In inviting the attention of the United States Government to the serious condition of affairs within the Republic of Liberia Sir Edward Grey expressed the opinion that it is extremely desirable that arrangements be made at an early date for a general settlement of the financial [Page 704] difficulties in which the country is involved, and states that His Majesty’s Government is prepared to give their cordial support to any scheme which the United States Government might put forward for granting a loan to the Liberian Government, provided that the preferential rights and privileges of the British bondholders of the present customs loan were maintained and that provision be made in the scheme for the payment of outstanding British claims.

Furthermore he is of opinion that the conditions of any future loan should be such as to place complete control of revenue and expenditure in the hands of European or American commissioners.

In conclusion Sir Edward Grey expressed his desire to know the views of the United States Government with regard to the foregoing suggestions and accordingly I cabled you yesterday the substance of the note.

I have, etc.,

Whitelaw Held.
[Inclosure.]

The Minister for Foreign Affairs to Ambassador Reid.

Your Excellency: I have the honor to acknowledge the receipt of your excellency’s note of the 7th instant, relative to the situation in Liberia, and to inform your excellency in reply that His Majesty’s Government had already decided not to press their boundary negotiations with Liberia, until the Government of the United States had announced the line of action they proposed to adopt as a result of the recent visit of the American commission to Liberia.

I would, however, invite the attention of your excellency’s Government to the fact that, according to the information which had reached His Majesty’s Government, the Republic of Liberia in on the verge of bankruptcy and remedial measures are urgently required.

His Majesty’s Government feel that it is extremely desirable that arrangements should be made at an early date for a general settlement of the financial difficulties in which the country is involved, and that the Liberian Government should be prevented from increasing their debt. His Majesty’s Government would be prepared to give their cordial support to any scheme which the United States Government might put forward for granting a loan to the Liberian Government for the purpose of putting the finances of Liberia upon a sound basis, provided that the preferential rights and privileges of the British bondholders of the present customs loan were maintained, and that provision were made in the scheme for the payment of outstanding British claims. His Majesty’s Government are further of opinion that the conditions of any future loan should be such as to place complete control of revenue and expenditure in the hands of European or American Commissioners.

His Majesty’s Government would be glad to know the views of the United States Government with regard to the foregoing suggestions.

I have, etc.,

W. Langley
.
(For
Sir Edward Grey
.)