LETTER TO C.J. SYMINGTON FROM (Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R001100080002-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 148
• Document Creation Date: December 14, 2016
• Document Release Date: November 12, 2002
• Sequence Number: 2
• Publication Date: December 31, 1956
• Content Type: LETTER

Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
FA -8-9324/a
Mr. C.
National P1ani th Association
1606 New Hampshire Avenue, N. W.
Washington 9, D. C.
Dear Mr. Symington:
In the absence of Mr. Dulles, may I
acknowledge and Uma you for your letter of
December 28 and the copy of the NPA case study.
I will be happy to bring these to
. attention upon his return shortly
Sincerely,
s16NEU
STAT
1 - ER
1 - Reading
DCI -r~
- JAS
A- - ip~ d For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 pAoyep 6p lpse ft2/A1'1k:IC.jA-RDP8A0S O CIA 0 10 N -2
1606 NEW HAMPSHIRE AVE., N. W., WASHINGTON 9, D. C. COlumbia 5-7685
NATPLAN
9.ia~
December 28th 1956
Mr. Allen W. Dulles, Director
Central Intelligence Agency
Washington 25, D.C.
Dear Allen:
The case study of Firestone's operations
in Liberia has just been published by the
National Planning Association.
It effectively demonstrates what private
capital and competent management can accomplish
in less developed countries. A copy of this
report and a recorded statement from President
Tubman about Firestone's contribution to the
welfare of the Liberian people are enclosed.
Sincerely yours,
r. J. Symington
enclosures/
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release- 2002/11/13 : CIA-RDP80B0l676R001100080002-2
FROM o FR D SMITH & CO . , INTC .
533 Fifth Avenue
New York 3L, New York
FOR: NATIONAL PLANNING ASSOCIATION FOR RELEASE
Washington, D. C. Monday, December 1J, lS
RECORDED STATEMENT
by
His ;excellency, William V. S. Tubman, President of Liberia
for the
National Planning Association Luncheon
Tire Waldorf Astoria, New York, N. Y. RECORD D AT:
December 5th, 1S5:, The Executive Massie
Monrovia, Liberia
November 27th, 1;5',
The beginning of the Firestone investment in Liberia represented one of
the first examples of large scale investment in Liberia by foreign capital.
Even though at the time the agreements were reached Liberia accepted them
primarily for political reasons, it has been demonstrated that with good will
on both sides, foreign capital can contribute substantially to the development
of underdeveloped countries and also reap satisfactory profits.
The Firestone venture in Liberia has been successful because it has brought
beneficial results to both the Firestone organization and to Liberia.
Over the past few years we have pursued an Open Door Policy where foreign
capital has been encouraged to invest in Liberia on the basis of mutual benefits
for the capital and for the country.
In r oii~g - this Liberia offers a.--goverritlerat that has been stable:- fdr over a
century. It grants exemptions to investors for a limited period of years. It
has a fair and equitable tax structure and does not believe in confiscatory
taxes. There are no restrictions on the transfer of capital or earnings.
Many American and European companies have taken advantage of these con-
ditions to invest in Liberia also on the basis of mutual benefits for the
companies and for Liberia. Among them are the Liberia Mining Company, B. F.
Goodrich, Inc., African Fruit Company, Liberian-American-Swedish Minerals
Company, and others.
The Government of Liberia has been pleased to confer on the leaders of
these and other companies high distinctions because of the part which their
companies have played, are playing and are expected to play in the continued
development of the country.
Let me say that Liberia believes firmly in the majesty of the law and
feels that law should be applied, fairly to all alike regardless of race or
origin.
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
The Government of Liberia feels that treaties and agreements should be
considered sacred, binding and inviolable. They should not be unilaterally
abrogated since mutual trust, respect and confidence are foundation stones
in mutual relationships.
Liberia offers a good example of how these principles have been adhered
to. At no time has she unilaterally abrogated any agreement. Whenever
differences have arisen between investors and Government, these differences
have been resolved by negotiations and agreements have been reached, modified
only upon mutual consent of the parties.
Notwithstanding foreign capital is playing a part in the development of
Liberia, the Government of Liberia has planned, instituted and operated a
large scale development program of its own in public works, communications,
sanitation, health, education, agriculture and commerce. These programs have
been of inestimable value to both the Government and the foreign companies
with investments here.
We are also aware of the part that enlightened private capital can play
in the development of underdeveloped countries and will continue to encourage
Sach investment on the basis of mutual benefits. The Liberian Government and
people will also continue to pursue their own programs and development of the
country with all the energy, zeal, and resources at their command.
It is to be hoped that private capital seeking to invest in foreign areas
will pursue an enlightened policy and invest in a manner that benefits may
accrue to both sides.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 or~ed'For Re1ease`2002/11/13 : CIA-RDP80B01676R001100080002-2
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 02/11/13 :. CIA-RDP80 B0167f 8001100080002-2
LIBERIA
LEGEND
TOWNS
ROADS
+ly been made
pos,aible by two major factors-the building of the airfield, the Free
Port, and the road system; and the so-called "open door" policy of
President Tubman, adopted when he assumed office in i944 and con-
tinued ever since.
From the outset of his administration, President Tubr.Ean recognized
three ways by which the economic development of Liberia could be
unc.ertaken. The first was the authoritarian way, un fer which the
Liberian people would be forced to save from their own limited produc-
tion the resources needed for capital investments. But this way was
unthinkable for a country devoted since its birth to do !nocratic prin-
cip. es and whose production barely exceeded the needs of a subsistence
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
standard of living. The second method was to obtain the necessary
investment capital from other governments-in this case the United
States-and from international organizations. However, President Tub-
man and his advisers recognized that the many higher priority claims
from Europe and Asia upon U.S. grant funds and Liberia's own limited
capacity for servicing and repaying intergovernmental loans restricted
the amounts of capital which could be expected from these sources.
The third method was to encourage the inflow of private foreign capital.
In the end, the Tubman administration decided upon a combination
of the second and third ways.
This decision was not easy, and it is a tribute to the maturity of
thinking and the self-confidence of the Liberians. Despite occasional
official protestations to the contrary, many underdeveloped countries
are fundamentally suspicious of, if not hostile to, private foreign capi-
tal-either for doctrinaire socialistic or nationalistic reasons or because
they have had unhappy experiences in the past with irresponsible and
rapacious foreign investors. For their part, private investors-par-
ticularly Americans-have been reluctant to entrust their funds abroad
in the postwar period owing both to the profitable opportunities for
investment at home and to the uncertainties of investment in under-
developed countries. This has meant that, to attract private foreign
capital, the Liberian government has not merely had to be willing to
receive it, but also has had to provide explicit assurances of reasonable
security and such positive incentives as liberal incorporation and
patent laws, equitable tax treatment, and freedom to remit earnings
and repatriate capital.
Thus, the open door to private foreign investment in Liberia has
involved risks on both sides. For the Liberian government, it entails
the risk that some irresponsible private investors may inadvertently
be admitted. There is also the danger that foreign capital, however
well intentioned, may eventually control too large a proportion of the
national wealth, though some protection against this possibility is pro-
vided by the fact that foreigners and foreign companies cannot own
land. For private investors, there is the risk that nationalistic opposi-
tion to private foreign capital may one day become so strong as to
endanger their investments. These risks have been minimized through
vigilance and mutual trust, which so far have been the keys to the
success of Liberia's open door policy.
The Liberians' own efforts, combined with financial resources pro-
vided by the U.S. government and private foreign investors and the tech-
nical and managerial skills available through the various assistance
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80BOl676RO01100080002-2
programs, have brought Liberia well into the first stage of the long
and difficult transition from a predominantly subsistence tribal society
to a modern democratic state with rising productivity and living
stand ards.
THE .LIBERIAN PEOPLE AND THEIR WAY OF LIFE
No CENSUS has ever been taken of r he Liberian
people, but the Liberian government estimates the total population
of the country to be in the neighborhood of two million However,
on the basis of the recent aerial mapping of the country and sample
hut counts it is believed that the total population might well be less.
In the past, it has been customary to divide the population into two
groups-the so-called "Americo-Liberians," descended frorr the original
settlers and numbering between 15,000 and 20,000, and th,~ indigenous
tribal people, constituting the rest, of the inhabitants. H,:wever, this
distinction is becoming less valid as the impact of mod, rn ways of
living and working makes itself increasingly felt in the country.
For the future, a more meaningful distinction would bo based less
upon ancestry than upon manner of life. Today, about 150,000 people
-incl iding the old Americo-Liberians-are more or less fu'ly involved
in the money economy of the country and participate in its political
life. Most are tribal people, or descendants of tribal people, the bulk
of whom have permanently left their tribal villages or reti rn only for
relatively brief intervals. The rest of the population is Mill mainly
dependent upon the traditional subsistence economy, is Mill largely
outside the national political life, with social and cultural character-
istics predominantly those of the primitive tribal society. however, no
sharp line can be drawn between the two groups, which tefd to shade
imperceptibly into one another. For the purposes of this chapter, the
smaller, but rapidly growing, group will be called "Liberian, s" and the
rest w:11 be referred to as the tribal people-though all arc citizens of
Liberia.
Participation in the Money Economy and PolitictJ Life
"Though most "Liberians" still speak tribal dialects of the. ndigeneous
West African languages, the common tongue and the offici 7.l language
is English. Most Liberians live in the coastal plain, on the foreign
concessions, and in the larger towns and villages in the Hinterland,
particL larly along the main road to the French Guinea :,order. As
Approved For Release 2002/11/13 : CIA-RDP80BOl676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
roads are built, increasing numbers are moving inland, where new
recruits from the tribal society are also constantly swelling their ranks.
Except for the category of casual unskilled labor, all of the wage-
earning occupations are filled by these Liberians. Most of the semi-
skilled and skilled workers on the foreign concessions and the native-
owned commercial farms and plantations are Liberians. They carry
on the service industries in the large towns, drive the growing numbers
of trucks and buses, and furnish the manpower for the police and the
Liberian Frontier Force, the national army. Many operate small farms
of their own. Others, particularly the Americo-Liberians, own commer-
cial plantations and farms; staff the administrative and judicial posts
in the government; engage in politics, the legal profession, and reli-
gious activities; teach in the schools; and work in hospitals, clinics, and
mission stations.
There is one occupation, however, in which the Liberians have not
yet shown much interest. This is what may broadly be called entre-
preneurship. For complex reasons, there are, as yet, very few Liberian
businessmen. In part, the lag is caused by the particular stage of
Liberia's economic and social development. Business opportunities and
knowledge are still limited; capital accumulated in the hands of pri-
vate individuals is relatively scarce; economic risk taking is an un-
familiar experience; and mutual confidence in one another's business
judgment and financial integrity is largely lacking. In part, too, it
results from persisting quasi-aristocratic attitudes and standards char-
acteristic of the preceding generations of Americo-Liberians. Politics,
government service, and the legal and teaching professions still tend to
be regarded as the most worthwhile occupations and conspicuous con-
sumption continues to absorb the largest portion of accumulated in-
comes. To the extent that private Liberian investment occurs, it is
still mainly in agriculture, in housing, and in foreign-principally
American-securities. However, recently some of the younger Libe-
rians, mostly foreign-educated, have begun to invest in commerical
ventures-fishing, banking, and small manufacturing. Vice President
William R. Tolbert, Jr. is credited with stimulating this development.
In consequence of this situation, the commercial life of the country
is almost completely in the hands of the Lebanese, in whose small
retail shops-located in every town and village-the Liberians work as
clerks. Lebanese have largely displaced the Mandingos, traditional
West African traders, although the latter continue some trading activi-
ties in Liberia. There are about 2,000 Lebanese in Liberia, and virtu-
ally every village-no matter how remote-has at least one Lebanese
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
shopkeeper. In the larger hinterland villages and towns, rheY are also
the local produce merchants for rice and other salabh. agricultural
commodities, and most of Liberia's export trade in oeoa, coffee,
piaserava fiber, palm oil, and palm kernels is in their 4 rids. In most
case:i, the Lebanese do not become permanent residents o Liberia, but
return to their native land after accumulating enough n:+iney to pur-
chas. a farm or business at home. Many of the skilled Negro artisans
-woodworkers, metalworkers, masons, etc.-who operate their own
independent workshops are from the Gold Coast and cr her parts of
West Africa. All active plantation, mining, manufacturing, banking,
and Shipping enterprises of any significant size have been started and
are cwned and managed either by U.S. and European cori,panies or by
the Liberian government itself.
Nevertheless, many Liberians, particularly those with some educa-
tion, are intensely interested in economic advancement L,nd are eager
to see their country benefit from development of its nati.ral resources
and improvement of its productivity. They are proud of heir country
--of its origins, its history, and its present plans and futi re prospects.
They take great satisfaction in pointing out that Liberia as been and
,still is the only independent Negro republic in Africa. Hence, they
regard their country as living proof of the capacity of Africans for
self-government and self-improvement and they think c f themselves
as leaders in the movement for African independence :tnd progress.
For these reasons, they are also highly sensitive to c: ticism from
foreigners.
The Tribal Society
In contrast to the national consciousness of the Liberiai.s is the local
orientation of the tribal peoples. Anthropologists have listinguished
abou~ 20 separate tribes. Although there are cultural differ: ences among
these tribal people, their social organization, economic a tivities, and
religious beliefs and practices are similar. The basic unit of tribal
socie-;y is the household, consisting of a husband, his w",fe or wives,
their children, and dependent relatives. Individual households of
brotl ers and married sons are grouped into families, us tally headed
by the father, if still vigorous, or the eldest brother. Th, families, in
turn, are grouped into clans of collateral relatives, and tl.e clans into
tribe.; speaking a common language or dialect and presumed to be
descended from some legendary common ancestor.
The tribal people live in villages, the smallest of which may consist
only of the two or three households belonging to a single family.
Larger villages-called towns-may contain a hundred or more fami-
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
lies, all members of the same clan. The clan usually embraces several
towns, large and small.
Authority is vested in the head of the family, who is in turn subordi-
nate to the town chief. The clans are presided over by clan chiefs, who
are usually the town chiefs of the largest town within the clan area.
The heads of the tribes are called paramount chiefs. After the Liberian
government began to exercise active and continuous control over the
tribal people, the hinterland was divided into three provinces, which
were in turn subdivided into administrative districts. In each district,
there are one or more paramount chiefs, usually selected by the local
clan chiefs and elders and approved by Monrovia. They are the point
of contact between the Liberian government and the tribal people and
they exercise a general administrative and judicial authority over the
tribes and clans subordinate to them. The paramount chiefs are super-
vised by Liberian district superintendents appointed by the president
of Liberia.
The economic life of the tribal people centers around agriculture
and, following age-old customs, agriculture is still organized on a
family basis. Men, women, and children all take part in the still
primitive methods of planting, harvesting, and storing crops. By far
the most important crop produced by the tribal people is upland, or
dry, rice; next is cassava (manioc). These provide the main staples of
the country's diet. The tribal people also raise supplementary crops,
including such tubers and vegetables as eddo, sweet potatoes, okra,
peppers, tomatoes, cucumbers, eggplant, cabbage, squash, and certain
types of beans. Also, every village and town has its oil palm trees
which, along with peanuts, supply the fats and oils in the native diet.
Coconuts and kola nuts are raised; banana, plantain, papaya, and
avocado trees abound; and most villages and towns also have a few
mango, citrus, and other tropical fruit trees.
The wide gap which remains to be bridged between modern agricul-
tural methods on commercial farms in Liberia and those of the tribal
family is illustrated by prevailing methods for raising rice and cassava
in the hinterlands.
The men of the family will cut down and burn low bush on a plot
large enough to supply the family's rice needs but not too large to be
worked with the available family labor supply. The resulting wood
ash provides the only fertilizer. On bare patches of soil, amid half-
burned logs and stumps, the women and older children drop the rice
grains in shallow furrows scratched with hoes or wooden sticks. No
weeding or cultivating is done.
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
The rice usually grows rapidly after the onset of the rains, fending
for itself until the rice heads begin to form and the resulting onslaught
of rice birds. Although the children and old people con? inuously beat
drums, shake rattles, and wave branches to frighten away the rice
birds, a substantial portion of the crop disappears do,,- ,n the gullets
of t..iese numerous and voracious feeders or is consumed by the multi-
Ludes of insects infesting the country.
The rice is cut and threshed by women and children, then stored in
baskets under the roofs of the native huts, where it is protected from
hurr..idity by smoke from the household fire and frog , insects and
rodents. If there is more rice than the family's anticipat,~d needs until
the next harvest, the surplus is usually sold or barterc 1 to the local
Lebanese shopkeeper.
After the rice is harvested, cassava is generally sown n the cleared
iielc.. It requires no care, and, after harvest, the field is allowed to re-
vert to jungle. Although land is plentiful, this practice:: of returning
lane. to natural growth for seven or eight years sometim{?s necessitates
the use of land at considerable walking distance from th?- larger towns
and villages. And in some cases, as population has inercased, families
have moved into the fringes of the tall rain forest and undertaken the
labcrious task of clearing rice plots in the high bush. Recently, how-
ever, the Liberian government has taken steps to prr4ect the still
extensive stands of virgin forest.
Except in occasional bad years, the ground and tree ;props provide
enough calories for a reasonable subsistence diet for the- country, and
starvation or endemic hunger caused by a general shortage of food is
unknown. However, there is serious malnutrition amor,. both tribal
people and Liberians in consequence of a severe proton deficiency.
Domestic animals in Liberia fend for themselves, which severely re-
stricts both their numbers and their size. Dwarf varic ties of goats,
sheep, and pigs, found in limited numbers in most villas-s and towns,
scavenge in dump heaps and browse on wild vegetation, and chickens
and guinea hens scratch for insects in the streets. These ;mall and ill-
fed creatures provide the bulk of the very inadequate neat supply of
the country. The forests have been overhunted for deca4es and game
aninials are now very scarce. The same is true of freshwater fish.
Thoagh all manner of rodents, reptiles, and insects are a--idly eaten by
the tribal people, this protein source is too small and uncc.-tain to make
up much of the deficiency.
Formerly, the tribal people made the few simple tools and utensils
which they required and wove their own cloth from home-crown cotton.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
Now, they are more inclined to fill their few needs at the local
Lebanese shops which stock a variety of imports from Europe or
America, including pots, pans, knives, machetes, garden tools, lanterns,
blankets, cotton goods, and T-shirts and tennis shorts-the latter
rapidly displacing the traditional loin cloth and singlet as the preferred
style of male attire among both Liberians and tribal people. These
purchases are made either on credit against future delivery of market-
able agricultural surpluses or for cash which the men earn for casual,
unskilled labor on the roads, the foreign concessions, and the Liberian
f arms.
Though native handicrafts never attained the technical or artistic
proficiency of other parts of West Africa, the tribal people have always
been skillful house builders. The typical native hut is a round or square
structure made of tightly packed, dried mud supported by a wattle
frame and covered by a steep, overhanging, conical thatched roof. The
outside and inside walls are periodically wetted and rubbed smooth
and are sometimes covered with white clay or painted in geometric or
crude figured designs. These graceful houses are built with incredible
rapidity, last for years if properly maintained, and provide excellent
protection against rain and heat.
The way of life of the tribal people is still largely uncomplicated by
the pressures and tensions now affecting the inhabitants of many other
underdeveloped countries at later stages of the transitional process.
Indeed, some of the fears and anxieties that plagued the traditional
tribal society have been substantially mitigated during the past quarter
century. Through the Liberian government's efforts, tribal warfare has
been suppressed for many years; various indigenous forms of forced
labor and debtor servitude have been greatly reduced, though not com-
pletely extinguished; widespread famines have been prevented by im-
ports of food and improved inland transportation; hospitals, clinics,
and schools are being built in tribal areas; and the worst cruelties and
terrors of the old native religion have been legally prohibited and are
slowly dying out.
Nonetheless, custom and tradition still largely rule the tribal life,
and remain stronger sources of authority than the personal power of
the town and clan chiefs or the legal power of the paramount chiefs
and the Liberian government. The "zo" or native witch doctor-a com-
bination of priest and dispenser of "bush medicine"-is still greatly
feared and respected. The Liberian forms of the pervasive West
African secret societies are still strong and are widely feared. Though
the dread Leopard Society-with its bloody human sacrifices--has
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
beer. suppressed by the government, other secret societitts (the Snake
People, the Water People, etc.) have adherents not on!y among the
tribal people but among educated and highly-placed Lib,:^rians as well,
and unaccountable disappearances of men and boys ever, in Monrovia
and the coastal towns are occasionally attributed to their gruesome
rituals.
Integration of the Tribal People
Relations between the two parts of the population an changing. In
he early days, the tribal people were viewed by the Liberians with a
mixture of contempt for their primitive way of life and cl' fear of their
numbers and potential power. They were not really rec~ ~gnized in the
organization of government. Economically, they were regarded as no
more than a source of cheap or unpaid labor and of =uch taxes as
could be levied against those within reach of the govrnment's au-
thority. No provision was made for their education, iii provement of
their health conditions, or economic advancement. Fom all practical
purposes, they were treated as a subject people and nct as members
of the Liberian nation with the rights and privileges perLlining thereto.
T ris attitude began to change at the beginning of the 20th century.
Various administrative arrangements were tried from 1910 until 1932,
whe:i the main outlines of the present system were adopt- 1. The great-
est progress, however, has been made since the electioi of President
Tubman in 1944. He has consistently followed what he , alls the "uni-
'ication policy"-that is, the gradual integration of the tribal people
,into the political, economic, and social life of the country and their
ever.tual participation as full and equal citizens.
Tie unification policy is based upon recognition of tl e fact that it
would be neither desirable nor practicable to attempt t dissolve the
tribal society rapidly and to expect the tribal people to a sume quickly
the :?ights and obligations of the Liberians. There is still much vitality
and much that is beneficial in the tribal way of life. It provides an
orderly set of personal and institutional relationships which are famil-
tar, calculable, and reassuring. To dissolve these too rapidly or too
brutally would expose the whole country to the social disorders and
mast; irrationalities arising from a widespread sense of ro?:tlessness and
aimlessness and the lack of a feeling of belonging. M~ ireover, as a
practical matter, Liberia has neither the economic n,eans nor the
political and social experience required to provide quicl_ly the neces-
sary new frameworks of order and meaning for larg.= numbers of
tribal people.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
The aim of the unification policy is to overcome the serious defi-
ciencies of the existing tribal society and to provide its members with
the minimum qualifications necessary to participate effectively in the
economic and political life of the country. Acceptance of these limited
objectives means that, for the time being, the government has had to
reconcile itself to continuation of many tenacious tribal customs of
which it theoretically disapproves-for example, polygamy, the indige-
nous animistic religion, the secret societies, debtor servitude, local
government by the hierarchy of chiefs, etc. Over the longer term, these
and other tribal institutions and customs will inevitably die out as the
unification policy produces results and as Liberian economic and poli-
tical development progresses.
NATIONAL GOVERNMENT AND POLITICS
LIBERIA IS A REPUBLIC and has been since its
founding. Its written constitution provides for separation of the exec-
utive, legislative, and judicial powers; for a system of checks and
balances; for fundamental civil rights; and for an orderly process of
amendment. There have been no successful political revolutions in
Liberia, though as late as 1955 political assassination was seriously
attempted.
Though the Liberian constitution is closely patterned on that of the
United States, it differs in one important respect: Liberia does not
have a federal form of government. The country is divided into five
counties and two territories located along the coastal plain, and three
provinces embracing the whole of the interior. None of these local
units has its own administration; all are arms of the central govern-
ment in Monrovia, and the local officials are responsible to the presi-
dent of the Republic.
The president and vice president are elected by popular votes (there
is no electoral college) for initial terms of eight years and may now
be re-elected for any number of additional terms, each of four years.
The legislature is bicameral: two senators from each county are
elected for six-year terms; of 35 representatives, elected for four-year
terms, 12 represent the provinces and the remainder are elected by the
counties and territories on the basis of population. The president is
assisted by a cabinet, each member of which heads a major executive
department: State, Treasury, Justice, National Defense, Post Office,
Interior, Public Instruction (education), Public Works, Agriculture
and Commerce, and Public Health. In addition, a number of permanent
and special commissions and boards are responsible for administrative
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
area:: not covered by the departments. The government oE:erates on an
annual budget which is prepared by the president and revised and
tpproved by the legislature.
Citizenship is restricted to Negroes or descendants of Vegroes and
may be acquired by birth or naturalization. All citize male and
emale, may vote in national elections if they are at leas 21. years of
age and own a hut, house, or other property in fee sim le on which
taxes are paid. Varying residence and property qualifies ions restrict
t hose eligible for election to public office.
The dominant political party in Liberia today is tha True Whig
,'arty, headed by President Tubman. The True Whigs h: ve governed
the country since 1870, when they displaced the forme; v dominant
i epublican Party, which is now extinct. However, other olitical par-
ties usually have contested elections. Recent elections l:, the all been
won )y the True Whig Party by overwhelming majoriti s. The poor
slow:.ng of the opposition parties does not mean that no najor issues
()lt principles and personalities exist in Liberian politic life. Both
within the country as a whole and within the True Whig Party itself,
there are groups opposed to the policies and personnel of .he Tubman
administration.
Co: siderable opposition exists to two of President Tu man's most
irnpo:.tant policies: the unification policy under which th tribal peo-
ple a:?e gradually being integrated into the national life; ,,.nd the open
door policy under which responsible private foreign cal ! ral is being
encouraged to participate in the economic development of he country.
Opposition to the first comes principally from groups ai ong the old
Americo-Liberian element-who prefer the old relations' p of domi-
oance and subordination. And a few Liberians and tribal )eople criti-
cize the unification policy because it seems too slow. Tlo opposition
to the open door policy comes from groups among be (h the older
Arnerico-Liberians and the newer Liberians. These ar the ultra-
natio:ialists, suspicious of foreigners, particularly whites and afraid
that Liberia will lose the substance, if not the form, of i dependence
houtl the foreign companies become too powerful in he country.
While such fears exist generally in Liberia, they are only strong
enough among a relatively small percentage of articulate `.iberians to
crystallize into political opposition to the open door policy
Opposition to the Tubman administration on persons grounds is
-more widespread and more formidable. In a country when politics has
traditionally been regarded as one of the few worthwhile ;ccupations,
competition for elective or appointive office is keen, and isappointed
Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
office seekers are prone to resentment and hostility. Since both types
of offices are at the disposal of the President either as chief executive
or as head of the majority party, it is only natural that resentment
should be focused on him and his top assistants and advisers. There
are always individuals who for one reason or another are out of favor
with the administration and are therefore out of office, and who coalesce
into the nucleus of an opposition party in election years. This situa-
tion also generates a small but dedicated reform movement which
condemns the "spoils system" generally and seeks to raise Liberian
standards of public service and political morality.
Despite the existence of different opposition groups, there can be
no question of the overwhelming popular approval and support en-
joyed by President Tubman. In largest part, this is owed to general
recognition of his high qualities of statesmanship, his mature under-
standing of the country's real needs and problems, and his compre-
hensive and practicable program for fostering Liberian political and
economic development. In part, too, it is the result of his personal
prestige and political skill-his ability to steer a middle course be-
tween extreme viewpoints and factions, and to unite a large majority
of the old Americo-Liberians, the newer Liberians, and the tribal peo-
ple in support of mutually beneficial policies and programs. To some
extent also, the administration's power is bolstered by the influence
which the government wields through official and unofficial supervision
of the press, the radio, and political activities generally.
At this stage of Liberia's political and social evolution, the country
is fortunate in possessing a leader of President Tubman's stature and
abilities. True, there are aspects of his administration which are re-
garded abroad and at home as too authoritarian. But even in these
respects, the Tubman administration is a decided improvement over
all of its predecessors, and its defects are far outweighed by the bene-
fits which the country is deriving from its forward-looking policies and
programs. Moreover, the standards of political morality and demo-
cratic freedom, which can legitimately be expected in the United States
and Western Europe, cannot in all fairness be applied to a country
with the bulk of its population still living in a tribal society and its
most advanced groups still largely characterized by pre-industrial and
quasi-aristocratic attitudes and values.
THE LIBERIAN ECONOMY
IT IS NOT YET POSSIBLE to present a comprehensive
and detailed picture of the Liberian economy, because much of the
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
necessary statistical data has never been collected and a large and
indeterminate portion of the nation's production and consumption still
occu.- outside the market. However, during the past decEAe, the Libe-
rian government has made considerable progress in estab ishing a sys-
tem )f statistical reporting for its market economy. This iescription of
the Liberian economy necessarily is based upon these s- atistics, and,
there fore, relates primarily to the market portion of he country's
production and use of economic resources.
Agriculture
Agriculture has been the basis of Liberia's economic We. The over-
whel:ring bulk of the inhabitants is engaged in the prodi -tion of food
or commercial crops, and agricultural commodities are tte most valu-
able portion of the nation's exports. Although rice is tY chief crop,
Owing; to primitive methods and the withdrawal from ric - cultivation
of growing numbers of people, the country has not be n producing
enough rice to meet the internal demand since World W _r II. Except
also for the meat and dairy products imported by weal.t >iy Liberians
and r,he foreign concessions, the country raises enough otl cr foodstuffs
to meet its needs.
Tree products constitute the principal commercial cr ps. Rubber,
Coffee, and cocoa are raised for export to Europe or the t sited States;
palm oil, bananas, and kola nuts, primarily for domestic consumption
and petty trade with neighboring parts of West Africa --although a
start has been made in producing bananas for shipmen to Western
Europe. In addition, piassava fiber is grown for export.
The most important production of tree crops occurs on the foreign.-
operated plantations. By far the largest of these are Fires` one's rubber
plantations. The Liberia Company, originally started by the late Ed-
ward R. Stettinius, Jr., has a cocoa and coffee plantation i: the interior
which still is being planted and is only beginning to hap Best commer-
cial quantities of beans. A large and growing banana lantation is
being developed in Sinoe by the African Fruit Compan a German
firm. The B. F. Goodrich Company has started a rubb+ r plantation
northwest of Monrovia which will not be in producti n until the
7.960'3. To date, about 1,400 acres have been cleared. Fint 11y, LeTour-
neau has a dormant plantation on the coast near Harpe
Ov3r the past decade, increasing numbers of Liberia:; have also
begun to produce rubber, and to a lesser extent cocoa ai I coffee, for
export. The palm oil, banana, and kola nuts which enter he domestic
market or are exported to neighboring British and Fret th areas are
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
largely the output of the tribal people. The export of Liberian-raised
commercial crops is mainly in the hands of Firestone, the large Euro-
pean trading companies (Dutch, German, and French), and the
Lebanese.
So far, no serious problems of land tenure have arisen in Liberia.
The country is a long way from experiencing any pressure of popula-
tion upon the arable land, which is readily available to all who wish
to cultivate it. Only citizens may own land, and only Negroes are
eligible for citizenship. In consequence, the foreign plantations are
held on leases from the Liberian government. Most agricultural credit
is extended by Lebanese on the security of the crop. Lebanese profits
are undoubtedly high, and there have been complaints of credit short-
age, usury, and exploitation of the tribal people.
In recent years, a number of the more enterprising Liberian farmers
have been turning to truck gardening and production of chickens and
eggs for markets in Monrovia and the larger towns. A promising start
has also been made in commercial fishing. A company organized in
1955 by Swiss, German, and Liberian interests operates a deep-sea
trawler which is able to exploit the fishing banks off the coast of Sierra
Leone. A second company, controlled by Americans and Liberians,
employs two smaller Sicilian trawlers which operate in local Liberian
waters. As a result of these activities, the retail price of fish in ]Mon-
rovia dropped from 25? a pound to 15? during 1955. Traditionally,
Monrovia and the coastal towns have been supplied by local Kru and
Bassa fishermen and by Fanti migrants from the Gold Coast. However,
using indigenous methods, their catch was always small and their costs
high, and the introduction of modern fishing equipment is threatening
to force the tribal and Fanti fishermen out of a market. Commercial
fishing has great possibilities for future expansion, as current opera-
tions cannot satisfy the demand for fish in Monrovia, much less in
the country as a whole.
Mining
Next to agriculture, mining makes the largest contribution to Libe-
ria's gross national product. The overwhelming proportion of the min-
ing output comes from the rich Bomi Hills iron ore mines. This con-
cession is operated by the Liberia Mining Company, whose largest
stockholder is the Republic Steel Corporation. It is estimated that the
deposit contains about 50 million tons of ore of 68 to 70 percent pure
iron, and more than 100 million tons of ore of 35 to 50 percent iron.
At present, the annual rate of production is 1.75 million tons of high
grade ore.
Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
Aride from iron ore, the only active mining operations ow occurring
in the country are the production of gold and diamonds. The reported
value of this output is relatively small. However, actual production is
probably larger than that reported, since it is believed ? fiat unknown
amounts of gold and diamonds are smuggled out of t.(., country in
order to evade the government's gold purchase monopol and the ex-
port tax. Although operations will not begin for some ti.Ae, the Pitts-
burgh Plate Glass Company has negotiated a conces-ion to mine
titanium.
Industry and Manufacturing
Semiprocessing of agricultural products and crude iror. ore accounts
mainly for Liberia's industrial activity. Firestone operai the largest
and most modern latex concentrating and coagulating plant in the
worli on its Harbel plantation. The Liberia Company is presently
installing the plant and equipment for fermenting, clearing, and dry-
ing its forthcoming cocoa and coffee crops. The Liberia Mining Com-
pany operates mammoth equipment for crushing, sorting; and loading
ore, and is now building a concentration plant to util. re profitably
the ] ower grade ores, which have hitherto been stockpil Fig. In addi-
tion, both Firestone and the Liberia Mining Company operate saw-
mills. About half of the latter's production is sold col mercially in
Monrovia; the rest of the sawmills' output is reserved or the com-
panies' own use. Several other small sawmills operate els where in the
country to meet local construction and mission needs.
Manufacturing industry is still very limited. A nun.'oer of small
brick and tile factories exist, including one on the Firestc ie plantation
at Harbel. Several Spanish and Italian firms operate si all factories
inak.ng bricks and tiles, soap, cotton textiles, and a cold storage plant
in Monrovia. One of them is now building a brewery.'I'fae inevitable
Coca -Cola and other soft drinks are bottled locally. ' ooden furni-
ture; doors, window frames, and-shutters; rush mats and screens; and
other light construction materials and home furnishings ; re made in a
number of small workshops in Monrovia and the larger ' owns. These
activities have been stimulated by the public works con truction and
the private housing boom which have been occurring in rf l ent years in
Monrovia and, to a lesser extent, elsewhere in the country.
Public Utilities and Transportation
Public utilities are only beginning to be provided in Liberia. Mon-
rovia, has a public water supply and sewerage system arid intra-city
Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
telephone service. Electric power is supplied by a diesel station at-
tached to the Free Port. However, the city has grown so fast that
both water and electricity are already in short supply and these
facilities will soon have to be expanded. Firestone and the Liberia
Mining Company have their own power, telephone, and water installa-
tions. Elsewhere, there are a number of small diesel electric generators,
principally at the other foreign concessions, the mission stations, and
hospitals.
Transportation is a serious limiting factor in the economic growth
of the country. The only hard surfaced roads are in Monrovia and its
immediate environs and on the Firestone plantations. The main
trunk road from Monrovia to Sanniquellie and its two branch roads
(one from Gbarnga north to the St. Paul River and the other from
Ganta south to Tappita) are unpaved but are continuously being
widened and improved and better bridges and culverts are being
built. In addition, there are relatively short stretches of improved
roads which can be used even in the rainy season. Aside from these,
however, there are only footpaths and a few motor tracks which are
passable only in dry weather. In total, there are about 850 miles of
improved and unimproved roads in Liberia. The only railroad in the
country is a single-track, ore-carrying line, about 45 miles long, which
was built and is operated by the Liberia Mining Company.
This lack of adequate inland transportation is the principal problem
in marketing agricultural products, since-because rivers are navigable
for only a few miles-most must be hauled by truck. Transport along
the existing roads has so far been adequate to serve the needs of the
contiguous farms now in production. But on the many farms not
located on or near a road, produce must still be moved by head-loading,
traditional throughout West Africa. Moreover, rapidly growing num-
bers of rubber, cocoa, and coffee farms along the new roads and those
under construction will be coming into production in the next few
years and will severely strain the existing motor transport capacity.
Modern air transportation supplements the deficient highway sys-
tem as far as passenger traffic and high priority freight are concerned.
The Liberian National Airways, owned by the Liberian government
and operated by American flight personnel, flies two DC-3's on regu-
larly scheduled routes linking Monrovia with the principal coastal and
inland towns. Air taxi service is available on hire to and from the
dozen or so small air strips throughout the country. Several of the
foreign companies operate their own air service between Monrovia and
their inland concessions. Both Pan American World Airways and Air
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
France operate scheduled international flights which slop regularly
at R)berts Field.
Liberia is fortunate in now possessing one of the larg :,st and most
modern ports for ocean-going vessels on the West Africsn coast. The
Free Port of Monrovia has docking space for four r tedium-sized
freighters and several smaller vessels at the same time. In the Free
Port area, there is storage space for two million gallons -wf petroleum
products; numerous warehouses; and the railroad terminal - ore storage
piles, and loading equipment of the Liberia Mining Company. Regu-
larly scheduled sailings from Monrovia to the other West kfriean ports
and to the United States are made by the Delta and the Farrell Lines,
and to Europe by Dutch and German shipping companies. The Liberia
Mining Company operates its own ore carriers, and Firest~,ne uses four
small tankers which carry concentrated liquid latex and ';coaled coagu-
lated rubber from its two plantations to the Free Port.
No other harbors for ocean-going vessels exist on the Liberian coast.
Freig.t and passengers are moved from Monrovia to the :,rher coastal
towns in lighters and small craft which can cross the shall,;w sandbars
that :lock the mouths of all the rivers and bays. However, a Sinoe
River harbor is being constructed in cooperation with the African Fruit
Company to accommodate its ocean-going banana boats, and there are
plans for constructing another harbor at Harper near C tpe Palmas.
Balance of Payments and the National Budget
In Berms of volume, Liberia's principal export is iron ore; in terms
of va. ue, its main export is rubber. Next in order of iml3ortance, by
value, are palm kernels and oil, gold and diamonds, coc~;a, piassava
fiber, coffee, kola nuts, and tropical fruits. Total exports in 1955
amounted to nearly $43 million.
The United States took nearly 87 percent of Liberia's c-xports, or a
total of more than $37 million in 1955. Nearly all of Libe -ia's rubber,
about half of its iron ore, and about two-thirds of its co-oa account
for virtually all of these Liberian exports to the United Cates. Libe-
ria's next largest export market was the Netherlands, amounting to
nearly $2.3 million; West Germany came third, with over 31.5 million,
and then came the United Kingdom, Belgium, Canada, Switzerland,
and Lebanon, which all together took an additional $1.6 if Liberian
exports.
In 1955, Liberian imports totalled nearly $26 million, of which more
than $18 million, or almost 71 percent, were manufactured goods; $4.3
were foodstuffs; $1.4 million were beverages and tobacc(,. and $1.4
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
was fuel, principally petroleum products. The United States supplied
$16 million, or 62 percent, of Liberia's imports; West Germany, nearly
$3 million, or almost 12 percent; and the United Kingdom, over $2.8
million, or 11 percent. Next in order of importance were imports from
the Netherlands, Japan, and Belgium.
Since the beginning of World War II, Liberia's merchandise exports
have exceeded its merchandise imports by an annual average of almost
$10 million. In 1955, the excess of merchandise exports over imports was
$16.8 million. The other substantial surplus items in the current account
balance of payments have been the donations received by Liberian indi-
viduals and institutions and by the Liberian government from private,
governmental, and international sources abroad, mainly American, and
vessel registration fees and tonnage taxes. Recently, the net income from
these sources has been more than $3 million a year. These net earnings
from merchandise trade, donations, and use of the Liberian flag by
foreign ships have financed most of the Liberian deficit with respect to
the other items in the current account balance of payments-freight
and insurance charges, foreign travel, payment of earnings on private
foreign investment in Liberia, interest on foreign loans, the Liberian
government's expenses abroad, etc. The remaining deficit in the current
account balance of payments has been considerably more than offset
since World War II by the influx of private long-term foreign capital
and by the payments received under successive Export-Import Bank
loans. For example, new private capital inflow in 1954 has been esti-
mated at more than $9.8 million, which was alone more than sufficient
to finance the net current account deficit of $4.4 million in that year.
Since 1943, when the pound sterling was superseded, Liberia's na-
tional currency has been the U.S. dollar, the country having only a
fractional coinage of its own. There are no restrictions on the importa-
tion of goods which must be paid for in dollars. Nor, owing to the
easing of the world dollar shortage in recent years, has Liberia had
much difficulty in marketing the less than 15 percent of its exports
which go to nondollar countries.
Until 1950, the Liberian government's major source of income was
its tariff on imports and its export taxes. In 1951, a graduated income
tax was enacted, retroactive for 1950, with a maximum rate of 25 per-
cent. Largely in consequence of this new source of revenue, and of the
growing income received from iron ore exports, the government was able
to triple its expenditures from $4 million in 1949 to over $15 million in
1955. Other revenues of lesser importance include customs duties,
a tax on luxuries, and the traditional hut tax. Liberia has no internal
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
debt and the national budget has been in reasonable balance since the
the late 1930's.
In 1955, nearly half of the national budget was allotte I to expendi-
tures for education, health, public works, and economic development.
Slightly more than six percent was earmarked for nati anal defense.
The remainder of the budget covered the ordinary expens4 s of national
and local government and of diplomatic representation ebroad. How-
ever, the Liberian government has no post-auditing pros ss and there
is no way of ascertaining the purposes for which funds v ere actually
spent.
In the absence of its own national currency and cent::al bank, the
Liberian government relies mainly upon fiscal rather th in monetary
policy to maintain the stability of internal economic cone tions and to
stimi; late economic growth. There is no general bankin :- law in the
country, and the credit facilities are rudimentary except f r those pro-
vided by the small private banking system. The oldest, Largest, and
most active bank is the Bank of Monrovia, formerly ow ed by Fire-
stone but acquired in September 1955 by the First Nation, t City Bank
of New York. The official depository of the Liberian go ernment, it
does i general banking business. A new Bank of Liberia ias recently
been started by Swiss, German, and Liberian investors bi:t its activi-
ties are still very limited. In addition, the International "Trust Com-
pany of Liberia, owned by American interests, handles he growing
vessel and corporation registry business of the country. )ther bank-
ing ventures are being organized by Italian and Spanish i ivestors.
The stability of economic conditions in Liberia is, hoever, more
dependent upon the influence of external factors than ul nn such in-
ternal determinants as the fiscal policies of the Liberian overnment
and the operations of the private banking system. A substaitial decline
in the quantities or prices of rubber and iron ore exports w(c old severely
strain both the balance of payments and the national )udget and
would result in drastic curtailment of the development pr( ram and a
drop in employment and real income. As the principal mar :et for both
commodities is the United States, maintenance of a high evel of de-
mand in the American economy is essential for continue( prosperity
and economic growth in Liberia.
Economic conditions have been generally favorable in Liberia since
the early 1940's. With neither a budgetary deficit nor a bal? ace of pay-
ments deficit and with no restrictions on imports, the count y has been
able to maintain reasonable monetary stability despite th4 worldwide
inflation and the demands of its own development program. ''rue, prices
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
have risen substantially since the prewar period, but so too have pro-
ductivity, production, and real income. Though there are as yet no
national accounts statistics for Liberia, it is apparent from the growth
of Liberian exports and the absence of serious economic complaints
that gross national product and real personal income must have in-
creased appreciably over the past decade despite the rise in prices.
The growth of commercial agriculture, mining, and the service trades
since the late 1930's has resulted in a manyfold increase in total wage
payments and in a rise in the minimum daily wage for unskilled labor,
which is now about 30?. At the same time, the subsistence economy of
the tribal people has not been seriously impaired by the spread of the
wage economy. In the main, the latter still supplements the former and
thereby serves to raise the total real income available for personal
consumption. This situation would also cushion the shock of any sub-
stantial decline in export earnings.. Such unemployment as might be
generated among the tribal people at the plantations and mines would
not leave them destitute since they could always be reabsorbed into
the still functioning subsistence economy. The principal hardship of a
depression would fall upon those Liberians who have broken all ties
with the tribal areas.
Labor Conditions
There can be no question that labor conditions have very substan-
tially improved since the early 1930's when contract labor, debtor servi-
tude, and various forms of forced labor prevailed in the country. Ex-
cept for survivals of these practices among the tribal people, labor's
freedom and minimum standards are protected by basic legislation
adopted in 1943. Though workers engaged in producing or processing
agricultural and forestry products are exempted from its provisions,
this law nevertheless influences their wages, hours of work, sickness
benefits, compensation for permanent injuries, dismissal rights, etc.
The workers' right to strike is also recognized conditional upon ex-
hausting the arbitration machinery of the Labor Court established un-
der the act.
Small-scale strikes among skilled workers have occasionally oc-
curred in recent years, principally on some of the foreign concessions.
However, Liberia cannot yet be said to have a genuine trade union
movement. A Liberian Congress of Labor, organized a few years ago
with the encouragement of the government, is said to have several
hundred members among skilled workers in Monrovia. Its principal
activity has been at election time, when it supported the True Whig
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
candidates. In general, the workers of the country-particularly those
from the tribal areas-are neither interested in trade unions nor do
they possess the skill and experience needed for organizing them. A
.ignificant development of trade unions in Liberia must await the
;growth of a true industrial or agricultural wage-ear: Ling class. It will
)e some years yet before this stage is reached. Meant' itie, such sporadic
.interest in trade unionism as occurs in Liberia ' mainly among
workers from economically more advanced parts of West Africa and
among certain Liberian intellectuals and officials, who would like to
have a trade union as a sign of the country's modeniity and progress,
regardless of whether the social basis exists for sustaining it.
Another factor which tends to militate against the _levelopment of a
genuine trade union movement is the comparative tightness of labor.
Many of the foreign enterprises and some of the young industries and
service trades in the larger towns report a chronic shc,r?tage of workers.
The exceptions are operations like the Liberia Complic investment
until 1960.
The three Export-Import Bank loans are financing: more than 25
percent of the total program. The remainder is being financed through
the regular budget of the Liberian government, approximately 20 per-
cent of which is earmarked each year for these purpor~es. If Liberia's
Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
export earnings continue at the levels of recent years, it would be rea-
sonable to expect that funds adequate to service all or most of the
development program could continue to be made available from the
ordinary national budget.
This public capital investment program will not only directly im-
prove the living standards of the Liberian people but it will also help
to stimulate additional private foreign investment by providing more
of the basic utilities and services required for agricultural improvement
and for the growth of manufacturing industry. The Liberian economy
is now well into the first phase of the transition from a largely stagnant
subsistence economy into a more modern form characterized by rising
and more diversified productivity and living standards. How rapidly
and efficiently the Liberian economy progresses seems likely to depend
primarily upon four factors-substantial fulfillment of the public in-
vestment program, a continued favorable climate for private foreign.
investment, an adequate supply of labor, and the development of
entrepreneurial attitudes and interests on the part of the Liberians
themselves.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
IL
Why and How Firestone Came to Liberia
THE FIRESTONE TIRE AND RUBBER COMPANY bears in one
r aspect a striking resemblance to the country in whc-ze transformation
it has played so important a part. Liberia has always been character-
ized by a pronounced independence of spirit-a spirit reflected not only
it its devotion to its political liberty but also in its willingness to take
J.sks and to withstand outside pressures in the pursuit of goals it be-
ieves worthwhile. So, too, has Firestone. Like a number of other suc-
cessful American corporations, Firestone owes its existence and pros-
Perity largely to the imagination, energy, and judgment of one family
---of its founder Harvey S. Firestone and his sons. For the same reason,
1 he Company has always been a vigorous, independent pioneer in the
development of new products and manufacturing anr! marketing tech-
niques. And it refused to join in, or be intimidate' by, any of the
patent monopolies and restrictive agreements that d,haracterized the
tubber industry during the first three decades of the ct ntury.
HIGHLIGHTS OF COMPANY HISTORY
THE COMPANY WAS FOUNDED in t 900 by a 32-year
cld Ohioan, Harvey S. Firestone, who had recently returned to his
native state after achieving a moderate success in the rubber business
i i Chicago. Located in Akron, the rubber capital of the nation, the
Company began its operations by marketing bicycle tires, solid rubber
tires for carriages and wagons, and rubber horseshoe rinds, which were
produced for it by one of the local manufacturing c iacerns. In 1902,
tie Company acquired its own factory and within t,~ o years became
t. e largest producer of solid rubber tires in the world. From its incep-
t:.on, Firestone was interested in the newly developing automobile
market, and began to make pneumatic tires in 1905. In that year, it
received its first tire contract from the Ford Motor (ompany, a mu-
tually advantageous relationship which has persist&f to the present
diy.
Henry Ford and Harvey Firestone became close friends and, as busi-
n,,~ssmen, they faced similar problems. Both were early advocates of
rrass production for mass consumption; they believed in supplying as
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
large a market as possible with the most efficient product sold at the
cheapest price. In pursuit of this objective, both men improved and
standardized products based on earlier or related models which were
protected by restrictive licensing and marketing agreements of various
kinds. In consequence, they were often involved in law suits with their
competitors. Harvey Firestone was never intimidated by the threat of
litigation, and always fought these law suits with determination and
persistence, generally to a successful conclusion.
One consequence of restrictive conditions in the rubber industry was
the incentive they provided to the Firestone Company to manufacture
its own components and related products. Thus, in 1909, the Company
began to make its own steel rims for the new pneumatic tires. This
activity eventually expanded into a subsidiary steel products business,
separately incorporated as the Firestone Steel Products Company. In
later years, the Company founded or acquired subsidiaries for process-
ing reclaimed rubber and for manufacturing cotton, rayon, and nylon
tire cords and fabrics; high quality rubber goods; automobile acces-
sories; consumer durable goods and household supplies; synthetic rub-
ber, chemicals, and plastics; industrial supplies; and many other fin-
ished products using rubber or components needed in rubber manufac-
turing.
During the first three decades of the century, Firestone grew not only
through diversification but also through the enormous expansion of the
market for its primary product, rubber tires. Entry into World War I
brought large-scale government contracts to Firestone, both for vehicle
tires and for the many rubber, steel, and textile products which its sub-
sidiary corporations could make. During and after World War I,
Firestone was one of the leaders in stimulating the use of trucks
for freight movements over short and medium distances. The Com-
pany soon achieved-and has never lost-a commanding position
in the manufacture of truck and other heavy duty tires, such as tires
for tractors and airplanes. The Company shared in the boom of the
1920's, pioneering in the development and introduction of cord and low
pressure balloon tires and expanding the variety and output of its
products in other fields. Aggressive sales and pricing policies enabled
it to survive the worst years of the 1929-33 depression without major
damage and, by 1935, production and profits were again increasing.
Under the stimulus of World War II and the postwar prosperity, this
growth has continued with only minor interruptions.
For the first time in 1953, and again in 1955, net sales exceeded
$1 billion a year, while net income after taxes grew to more than
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
$50 million in the latter year. In 1955, total wage, salt ry, and employee
benefit payments were nearly $300 million and thp~ Company paid
taxes of over $128 million. The eight million odd a area of common
dock outstanding in that year earned $6.81 a shar x and received a
dividend of $2.50, the remaining profits being reinvc sted in the busi-
ness. Despite capital expansion, the Company's long-term indebtedness
has been reduced in recent years, amounting to $11( million in 1955,
less than one-sixth of total assets.
Today, the Firestone Tire and Rubber Company i second only (in
terms of sales and assets) to the Goodyear Tire and Rubber Company
in the rubber industry. A July 1956 supplement to fortune magazine
tanked Firestone 24th among all American industri;_ corporations in
terms of sales and 33rd in terms of assets in 1955. The Company, or
its wholly owned subsidiaries, has factories throughout the United
States and in Canada, England, Switzerland, Spain, S, Guth Africa, New
Zealand, India, Argentina, Brazil, and Venezuela. It has natural rub-
ber processing plants in Singapore and Liberia. In ad tition, it operates
number of synthetic rubber factories.
FAR MORE THAN MOST GIANT CO~tPORATIONS, Fire-
stone has retained a "family" quality. Harvey S. Fir4 stone apparently
considered that his sons, practically from birth, were part of the man-
t,gement, and that the management was part of th- family. He ex-
posed them to every aspect of corporate operations, ind one can only
say that this somewhat unusual type of "executive c.evelopment" has
justified his approach and his confidence. The indepeidence and busi-
ness aggressiveness which have characterized Firestone's operations in
large part grew out of the characters of its founder and his sons. So,
too, have its general attitudes as expressed in othe - aspects of cor-
porate performance.
From the beginning, Firestone policies reflected a d o . p interest in the
welfare of the Company's employees, of the deale s who marketed
raany of its products, of the city of Akron in whic i the Company's
t eadquarters and chief plants were located, and of t ire United States
and the American people generally. This benevolent in` erest was mainly
t ersonal-an aspect of Harvey S. Firestone's indivi-lualistic person-
ality and awareness of the importance of human relations and values.
This general attitude may be illustrated by a brie outline of Fire-
stone's relationship with its workers-a pattern that R as also to appear
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
later in its Liberian operations. From the beginning, it was Harvey S.
Firestone's natural impulse to treat his employees as human beings
and not as mere instruments of production. At an early stage, the Com-
pany instituted a free life insurance plan for employees, established
a savings bank for them near the main factory, arranged for an em-
ployees' stock purchase plan, built a clubhouse, financed a 1,000-acre
housing and community development project for employees' families,
and undertook other employee benefit activities long before these be-
came general practices among American corporations.
Firestone's wage scales have always been among the highest in the
industry and have on occasion led new advances. The Company was
one of the first in Akron to adopt the eight-hour day in 1916. From the
beginning, the Company has had regular grievance machinery through
which workers could discuss problems of pay rates, hours, and working
conditions. However, Firestone was not among the small group of
American business firms that pioneered in recognizing trade unionism
and in developing mutually beneficial relationships with organized
labor. Like many American companies, Firestone neither encouraged
nor fought against the growth of the organized trade union movement.
In the mid-1930's, the Company became reconciled to the unionization
of the rubber industry, and has enjoyed comparative industrial peace
under collective bargaining ever since.
Firestone has had only two significant strikes in its history of almost
60 years. The first was in 1913 after the initial introduction of auto-
matic tire-making machinery and accompanying revised pay scales in
the rubber industry. Led by the Industrial Workers of the World
(I.W.W.), strikes occurred at Firestone, Goodrich, and Goodyear and
at many of the smaller rubber companies in Akron. At the peak of the
industry-wide strike, 15,000 of Akron's 22,500 rubber workers were out.
Within two months the strike was over, the companies agreeing to take
back all workers without discrimination and to make minor adjust-
ments in the new pay scales. However, the strike did not result in the
unionization of the industry and the I.W.W. locals soon disappeared.
The second strike was part of the general movement for union recog-
nition and collective bargaining in the mid-1930's. In 1936, the CIO
United Rubber Workers began a strong drive to win union recognition
and exclusive collective bargaining rights in the rubber industry. After
an inconclusive five-week strike at Goodyear, the Rubber Workers
called a strike at Firestone early in 1937. From the start, Firestone
indicated its willingness to recognize the union but refused to recog-
nize it as sole bargaining agent. After eight weeks, the strike was set-
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
tied on the Company's terms, but with the additional Ci,mpany pledge
tha-, it would not finance or otherwise aid any other lal Jr group. And
Firestone dissolved a short-lived company union, tl Employees'
Cor.ference Plan. Next year, the Rubber Workers won -xclusive bar-
gaining rights at Firestone in an election conducted bt the National
Lal. or Relations Board.
Firestone was the first major rubber company willin ; to recognize
the Rubber Workers, though not the first to grant the t~iion sole bar-
gaining rights. The Company has operated under a con'.ract with this
union since 1937 which at some renegotiations has set . new pattern
for the industry as a whole. In 1948, Firestone and the 'tubber Work-
ers signed a corporation-wide agreement covering all p ants operated
in the United States by the Company, and granting a wage increase
Thai served as the standard for the union's subsequent _ontracts with
the other rubber producers. This agreement was describ, 1 by the U.S.
Department of Labor as a "major step forward for industrial stability
in tie industry." Once it was clear that unionization hac come to stay,
the Company has dealt responsibly and constructively w -h the Rubber
Workers to the mutual advantage of both.
At the executive level, the Company's policies have :dso borne the
imprint of Harvey S. Firestone's distinctive personality. For top man-
agement positions, he preferred men like himself-mei who, though
they may have had technical or specialized training a:,.d experience,
also possessed the flexibility, resourcefulness, and self-c mfidence nec-
essary to operate in many different and unrelated field-. Thus, when
Harvey S. Firestone relinquished his post as president of he Company,
to become chairman of the board in 1932, his successor was John W.
Thomas, an industrial chemist who had joined the Con pany in 1908
as Firestone's first testing and research technician. An ther example
is Byron H. Larabee, for many years a lawyer in privy:-.e practice in
Akron, who has been operating head in Akron of the Fire stone Planta-
tion) Company for the past two decades. This predilect Lon for choos-
ing men who were capable of being both "generalists" an! specialists-
jacks of all trades-proved to be one of the decisive e ments in the
successful establishment of the Firestone operation in L heria.
JUST AS FIRESTONE refused to be 'found by do-
mes,ic monopolies and restrictive agreements, so its d--cision to be-
come a producer of natural rubber resulted largely from a- L : antipathy to
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
a foreign restrictive arrangement-the notorious Stevenson Plan of
1922-28. This was an effort on the part of the British to maintain the
price of natural rubber at a level sufficient to ensure the profitability
of their rubber plantations in Malaya and Ceylon.
Natural rubber is a complex hydrocarbon molecule which forms the
solid component of latex, a milky white fluid secreted by a large num-
ber of related trees, shrubs, vines, and plants growing in many parts
of the world. Of all the sources of latex, Hevea Brasiliensis, a tree
which grows wild in the Amazon Basin, has been preferred since rub-
ber became commercially important early in the 19th century. Seed-
lings from Hevea seeds were planted on a number of rubber estates
established in Southeastern Asia in the late 1890's and small quantities
of plantation rubber appeared on the market in competition with wild
rubber. Demand for rubber, which had been growing steadily despite
uncertain production and speculative prices, skyrocketed after the turn
of the century with the rise of the automobile, the truck, and the air-
plane.
Unilateral Efforts to Control the Rubber Market
Two abortive efforts to control the rubber market preceded Fire-
stone's decision to produce natural rubber. Brazil tried, first in 1905-06
and later in 1909-10, to corner the market. It succeeded in driving
prices to $1.50 a pound on the first try, and to $3.00 a pound on the
second, but in doing so it lost a large part of its market. High prices
and the growing demand for rubber had so stimulated the rapid de-
velopment of rubber plantations in Malaya, Ceylon, the Netherlands
East Indies, and other Southeast Asian areas that, by 1914, plantation
rubber had captured over 60 percent of the market. Prices continued
high and more acres were planted to rubber until the depression of
1920-21, when demand rapidly declined and prices dropped precipi-
tously to a disastrous low of 11..5? a pound.
It was the turn of the British rubber producers, who then supplied
about 70 percent of world production, to attempt control of production
and prices. They claimed that they could not operate profitably when
rubber sold below 30? a pound, and set out to assure this minimum
price.
In October 1921, a British Parliamentary Committee of Inquiry,
headed by Sir James Stevenson, was appointed to investigate the rub-
ber situation and to propose appropriate remedies. At first the Com-
mittee invited the Dutch, who had increasing rubber interests in South-
east Asia, to cooperate in a restrictive arrangement to stabilize prices,
Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
but the Dutch refused. The Committee then propose. a unilateral
scheme to be enforced by the colonial governments of Malaya and
Ceylon. This was endorsed by Winston Churchill, then tiEe Secretary of
State for the Colonies-never his brilliant best whei. dealing with
financial matters. Churchill was motivated apparently rot only by the
need to help the rubber growers but also-since the United States con-
sumed over 70 percent of the world's rubber supply- )y a desire to
improve the dollar earnings of the British Treasury. The Stevenson
Plan was approved by the Cabinet in October 1922 and was imme-
diai:ely put into effect.
The Stevenson Plan established a complex sliding scale of produc-
tion. and export controls, which worked automatically on the basis of
specific prices-whether up or down-in each precedi,ig quarter. A
"standard production" was calculated for each rubber estate and a
pro.aibitive export tax levied on shipments in excess of the permitted
expert quota. The pre-established formula could not be altered by
administering authorities, but only by the Colonial Office in London
aided by an Advisory Committee, of which Stevenson became chair-
man.
By 1925, the demand for rubber was again booming; l,ut the inflexi-
bility of the Stevenson Plan militated against any cor 11.sponding ex-
pansion of rubber supply, and prices shot up to over $1.20 a pound.
Protests mounted from rubber consumers all over the wa:rid, especially
in the United States, where the government added its o1icial voice. In
resx onse to outside pressure, the British reluctantly agreed to make
cha:zges in the Plan at the end of 1926, but by then th- damage was
done and the Stevenson Plan was past saving.
Dutch rubber production in Java, Sumatra, and &. rneo had ex-
panded rapidly after 1922, and production also increases in Siam and
French Indo-China. The Dutch plantation companies generally were
operated more efficiently and at lower cost than the British. They not
only planted additional acreage, but also developed higher and higher
yielding trees through selective breeding and bud-graftin experiments,
and undertook other research and experimentation. Whir n the Steven-
son Plan went into effect, the Dutch produced only 16 .,ercent of the
wor d's rubber supply; but in 1927, they were supplying 38 percent of
the world market while the British share had dropped t only 52 per-
rent. In these circumstances, unilateral control was ineffective, and
the British terminated the Plan at the end of 1928.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
Firestone's Quest for New Sources
Initially, the reaction in the United States to the Stevenson Plan,
surprisingly, was mixed. A majority of the leaders of the Rubber Asso-
ciation of America (RAA)-the trade association of rubber manufac-
turers-who had long been plagued by widely fluctuating prices,
thought that the British Plan would stabilize prices and would protect
the interests of rubber consumers as well as rubber producers.
Only Harvey S. Firestone, among the leaders of the American rub-
ber industry, was from the beginning an active and uncompromising
opponent of the Stevenson Plan. Firestone believed that, however
undesirable widely fluctuating rubber prices might be, the manufac-
turers and the consuming public generally would be better served by
a low crude rubber price which would stimulate increased use of
rubber. He had little faith that a restrictive arrangement managed
by the leading rubber producing country would fix rubber prices at a
level equitable from the consumers' point of view. Moreover, he was
opposed on principle to restrictive arrangements of any kind, and he
feared that the Stevenson Plan would injure the national security and
interest of the United States owing to its complete dependence on
imported rubber.
Harvey S. Firestone sought to enlist the rubber companies, the U. S.
government, and the consuming public in an attack on the Stevenson
Plan. However, in the winter of 1922-23, he pleaded in vain with the
RAA leaders. Far from agreeing actively to oppose the Stevenson
Plan, they wrote instead to members of the Association urging them
not to attend a meeting in Washington which Firestone had arranged
with government officials. Firestone subsequently resigned his Com-
pany's membership in the Association. It was not until the great up-
surge of rubber prices in 1925 that the American rubber industry was
united in active opposition to the Stevenson Plan.
Meantime, Harvey S. Firestone was more successful in Washington.
In February 1923, while the Washington meeting was still in session,
the Congress passed a joint resolution appropriating $500,000 for a
survey of the possible areas in which Americans might be able to grow
rubber economically. Also, Herbert Hoover-then Secretary of Com-
merce-began to investigate the possibility and legality of pooled
buying of natural rubber by American manufacturers. When rubber
prices began to climb toward their 1925 peak, Hoover and Firestone
organized a nationwide campaign to collect and use reclaimed rubber.
New facilities were built to process this material and reclaimed rubber
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
was permanently established as an important source of supply for the
Arr..erican industry. In late 1925, Hoover urged the American people
to conserve their use of rubber articles in the hope th, , the prospect
of declining American consumption would induce rubiJer growers to
sell additional supplies immediately while the market ,vas still firm.
This tactic was influential in bringing about a price decline during
1926. In addition, the succession of official protests to the British had
hel;jed to produce the minor 1926 modifications in the Stevenson Plan.
These governmental efforts were paralleled by private activities
which were ultimately to bear permanently successful -suit. Early in
1.923, even before the government study authorized by the Congress
got under way, Firestone organized and sent out ur icr Company
auspices several survey parties to investigate the feasi -ility of grow-
ing rubber in the Philippines, the Netherlands East Ir des, Sarawak,
Malaya, Ceylon, Mexico, Central America, and Africa. His son,
Harvey S. Firestone, Jr., entrusted with responsibility for this work,
headed several of the survey and negotiating parties during the next
few years. It is well worth noting that these unusual pry blems carried
great responsibilities, responsibilities which were new t+~ Firestone; in
faci,, new to Americans. It has taken time, patience, .nd originality
to solve them. Harvey S. Firestone, Jr. accepted these responsibilities
anc. his deep interest in the Plantations Company has continued
unabated.
In addition to these activities, Firestone enlisted his tv o good friends,
Thomas A. Edison and Henry Ford, in the effort to devc;lop American-
grown rubber. After testing 2,300 different plants on hif estate at Fort
Myers, Florida, Edison decided that a variety of goldccirod would be
the best producer of latex that could be grown witl::in the United
States. But the cost of production was several times hi,. her than that
of Hevea rubber, and Edison's experiment ended wit'. his death in
1931. In 1927, Henry Ford established a rubber planta.ion in Brazil.
However, labor shortages and the ravages of the Sc;uth American
rubber blight presented major difficulties and the p:,?operties were
finally sold to the Brazilian government in 1943.
Only Harvey Firestone's efforts were eventually successful. His pre-
liminary survey parties resulted in the selection of four ireas for more
car.ful exploration and possible development-Mexico, Sarawak, the
Philippines, and Liberia. A rubber estate in Mexico was leased by
Firestone in 1925, but was abandoned after one year owing to un-
settled political conditions and an inadequate labor force In the spring
of '1926, a concession to plant 500,000 acres of rubber trees in Sarawak
Approved For Release 2002/11/13 : CIA-RDP80B0l676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
was offered Firestone, but withdrawn under pressure from the British
government. A more ambitious plan for large-scale rubber planting in
the Philippines fell through when a bill to change legal obstacles
severely limiting land ownership by foreign companies never emerged
from a succession of hearings in the Philippine Legislature. Thus, only
the Liberian possibility materialized.
As early as December 1923, a Firestone expert-Donald A. Ross, a
Scotsman with years of rubber-growing experience in Southeast Asia-
visited Liberia. His preliminary report on climate, soil, rainfall, and
labor supply was encouraging. In April 1924, he returned to Liberia
with Harvey S. Firestone's representative, William D. Hines. A two-
fold plan was soon under negotiation for the development of rubber
production in Liberia.
The first and easiest phase of the plan was the rental by the Fire-
stone Company on a 99-year lease of an abandoned 2,000-acre rubber
plantation at Mt. Barclay, about 20 miles east of Monrovia. The lease
on this estate, originally planted in 1910 by a British company, had
been dropped during the 1920-21 depression. A new lease with Fire-
stone was quickly signed in June 1924, and tapping operations began
at Mt. Barclay after the jungle growth had been cleared and the estate
rehabilitated. The Mt. Barclay plantation was a useful pilot-plant
in which to learn about the possibilities and problems of large-scale
rubber production in Liberia. It also provided space for starting a
large nursery in which millions of seedlings could immediately be
grown for eventual use in the far more ambitious second phase of
Firestone's plan.
This involved a concession from the Liberian government under
which the Company would have the right to rent up to one million
acres for 99 years. Negotiations with the Liberian government over
this major undertaking were supervised by Harvey Firestone, Jr., who
visited the country for the final negotiations. A tentative agreement
on the basic concession was ready by January 1925, but its ratification
by the Liberian Legislature was delayed until November 1926 owing
to the difficult financial situation confronting Liberia at the time and
the need to negotiate supplementary agreements with the Firestone
Company on other matters.
WHY LIBERIA DECIDED TO ADMIT FIRESTONE
IF, DURING THE 1920's, the situation of rubber
growers and consumers was difficult and perplexing, that of Liberia
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
was even more so. The immediate symptom of its troubles was a
deepening financial crisis which had been maturing for several decades.
After a disheartening experience with its first foreign loan, arranged
with a group of London bankers in 1871, the Liberian government
managed to avoid having to borrow abroad until 1906. This loan also
was obtained in London, but difficulties soon developed and the British
government intervened, sending a gun-boat to Monrovia to back up
its demand for adoption of extensive reform measures by the Liberian
government. It was at this point that Liberia's request for U. S. gov-
ernment help resulted in President Taft's appointment of the 1909
Commission. The Commission not only recommended that the United
Sta bes guarantee Liberian independence and arbitrate future disputes
wit:a other countries, but, among other measures, recommended an
American loan, and American supervision of Liberia's cu.-toms receipts,
which would serve as security for the loan.
The U. S. government met with determined protestr. from Europe
when it endeavored to arrange with American bankers for an exclu-
sively American loan to Liberia. Accordingly, in late 1911, a loan of
$I.i' million was negotiated, in which American, British, French, and
German bankers all participated. Part of the proceeds was used to
pay the principal and interest arrears of the 1906 loan and other out-
standing obligations. A new customsreceivership was esrablished, and
the chief official, nominated by the President of the United States, also
served as financial adviser to the Liberian government. Three subor-
dinate receivers, designated by the governments of Britain;, France, and
Germany, remained in Liberia until the outbreak of World War I
when they were withdrawn, leaving the customs recei-, ership exclu-
sively in American hands.
World War I brought new difficulties to Liberia. The disruption of
foreign trade caused customs revenues to fall so drastically that the
Liberian government could not meet its ordinary dome stic expenses,
much less continue service on the 1911 loan. Local ret ''lions among
soma of the native tribes in 1915 necessitated a new appeal for Ameri-
can help, to which the U. S. government responded by sending arms
and ammunition to Monrovia. For several years thereafter, the U. S.
government endeavored to induce the Liberians to institute sweeping
domestic reforms as a condition of receiving additional American
financial assistance. In 1918, the U. S. Treasury earmarked $5 million
for Liberia under the authority of the Liberty Loan Act., withdrawals
to b-3 contingent upon the adoption of a major reform and development
program by the Liberian government. This was accepted by the
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
Liberian Legislature in 1919, but difficulties with Britain and France
over changing the 1911 loan contract and customs receivership pre-
vented immediate implementation of the agreement.
Both European powers were reluctant to see exclusive arrangements
made between the United States and Liberia. Instead, they proposed
international assistance and supervision and suggested that solution of
Liberia's problems be placed on the agenda of the World War I Peace
Conference. The U. S. government vigorously and successfully opposed
this latter suggestion. It also induced the British to withdraw their
request for participation in the Liberian assistance program and to
content themselves with a pledge of equality of treatment for British
interests in Liberia. Greater difficulties were encountered with the
French, but ultimately these, too, were overcome.
By this time, however, opposition had arisen in Liberia to American
supervision of the far-reaching internal reforms required under the
proposed American loan agreement. Unfortunately, before these fears
and objections were mitigated, the U. S. Congress declared that a state
of war no longer existed with Germany, and the President's authority
to use Liberty Loan funds automatically expired. This meant that
the loan agreement with Liberia would not be valid without a two-
thirds vote of approval in the Senate. Considering the strongly isola-
tionist sentiment of the Congress during the early 1920's, it was not
surprising that the loan agreement failed to receive the necessary
senatorial support. In December 1922, Secretary of State Charles
Evans Hughes could only give the Liberians the empty assurance that
the Senate's defeat of the loan agreement "is not indicative of any
change in the traditionally friendly attitude of [the United States]
toward the Liberian Government."
Somewhat discouraged by the Senate's action, Liberia's resourceful
President King decided that direct investment in Liberia by a large
American corporation might produce the support and assistance so
desperately needed. This decision was reached for political rather than
economic reasons. The Liberians now despaired of obtaining the neces-
sary financial assistance from the U. S. government. They were most
reluctant to turn to the governments or to private bankers in Britain
and France, because of the unhappy experience with the previous
European loans. Rightly or wrongly, the Liberian government was
also convinced that new British or French loans would only provide
opportunities for renewed intervention by the European imperial
powers in domestic Liberian affairs, which would ultimately lead to
loss of Liberian independence.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
To President King, the arrival in Liberia of Firestone'; first survey
party, exactly 12 months after the Senate's defeat of the American
loan agreement, seemed to be an unexpected opportunity to carry out
his ic!ea of inducing a private American firm to provide the help and
support which had been denied from the U. S. governm :nt. Though
he had never before heard of the Firestone Company, Preident King
actively interested himself in the purposes of this visit.
During the ensuing months, as President King continu A to pursue
this possibility, he had the encouragement and advice ;,f the U. S.
Department of State. Convinced that the existing ter Lper of the
Senate foredoomed any new attempt to obtain a governn pmt loan for
Liberia, the State Department had quietly been directing Firestone's
attention to Liberia, and subsequently it began to urge tyre Liberians
to explore possibilities with the Company. Nevertheless, 3nuch was at
stake and President King was not to be hurried despite he urgency
of Liberia's own situation. He wished to assure himself of Firestone's
intentions and record of honest and responsible behavior :,nd to make
certain that Liberia, too, would obtain needed benefit.. from any
arrangement made with the Company. The lease on the sanall, aban-
doned Mt. Barclay plantation was quickly negotiated. But the much
larger proposal to grant Firestone a concession to plant, up to one
million acres required more careful consideration. Ace ;rdingly, in
August 1925, President King sent the Liberian Secretary of State,
Edwin J. Barclay, to the United States to investigate Firestone's
bona fides and to continue the negotiations previousl begun in
Monrovia.
For its part, too, Firestone was not willing to embark up ~n the more
ambitious scheme unless something was done to improv, Liberia's
very precarious economic and financial situation. At first Harvey S.
Firestone took the view that the defunct proposal for a U S.govern-
ment lean to Liberia must, be revived. But the State Department soon
convin-,ed him of the impossibility of doing so. Mr. Fir~.i.tone then
proposed that the Firestone Plantations Company, which would be
formed to administer the proposed concession, should ext+,nd a loan
to Liberia. However, the Liberians were adamant agains' accepting
a loan from a private firm which would operate inside the ;ountry for
fear that the company would acquire too great an influen e over in-
ternal l'~iberian affairs.
After long negotiations and considerable prodding of both parties
by the State Department, the issue was compromised. Mr. Firestone
agreed to form a second corporation, independent of the Plantations
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
Company, to supply the loan; the Liberian government reluctantly
concurred in this arrangement. After a vain attempt to persuade a
group of New York bankers to provide the required funds, Mr. Fire-
stone formed the Finance Corporation of America with his own
resources.
It was at this time, also, that Firestone agreed to build a deep-
water harbor at Monrovia. Thus, three separate agreements were
eventually negotiated. As a result of protracted negotiations and hesi-
tations and fears on both sides, the agreements were not completed and
ratified by the Liberian Legislature until November 1926.
Despite Liberia's needs, the decision to admit into a small poverty-
stricken country a private corporation which would operate on the scale
envisaged by Firestone was not easy. There were grave risks that the
Company would try to dominate the country. But, in the minds of
President King and other Liberian leaders, these risks were outweighed
by the future political advantages which Liberia could obtain from
Firestone's growing stake in the country's independence and welfare.
Firestone's original motivation in coming to Liberia was to find a place
in which to grow rubber outside the control of the European imperial
powers, with their predilections for restrictive practices and monopoly
control. Thus, the Liberians believed that the Company's -interest
would coincide with their own in keeping Liberia free of European
domination. Moreover, the Liberians felt that the presence of Fire-
stone-a large and influential American corporation-was one of the
best possible ways of ensuring strong and active support from the
U. S. government in any future difficulties with the European powers.
These prospective political advantages, rather than considerations of
immediate financial help or long-term economic benefits, proved deci-
sive with the Liberian government and overcame both its general fears
about admitting so large a private foreign interest and its specific
doubts and objections with respect to some of the details of its agree-
ments with Firestone.
In the short run, this expectation of political support was only in
part justified, certainly not to the extent that the Liberians would
have liked. Three years after the ratification of the agreements with
Firestone, Liberia's troubles began over the slavery issue and the
League of Nations' plan of assistance. The Liberians were disap-
pointed in the roles of Firestone as well as the U. S. government during
the difficult early 1930's, though neither the State Department nor the
Company in any sense abandoned Liberia to its fate. In the longer
run, however, the original expectations of the Liberian government
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
have been exceeded beyond anything imagined in 1925 and 1926. For
the :fast 15 years, the interest, support, and assistance of the U. S.
government and of Firestone have been decisive factor z in the eco-
nomic development, political progress, and strengthened International
position of the country.
TER1'IS AND CONDITIONS OF THE FIRESTONE CONCESSION
TarE THREE AGREEMENTS with Fire: ! one ratified
by tlLe Liberian Legislature in 1926 and their subsequent amendments
established the basic terms and conditions under which t lie Company
has operated in Liberia for the past 30 years.
The Harbor Agreement
Th3 least important of the agreements dealt with Fir stone's con-
struction of a deep-water harbor at Monrovia. Under the terms of the
agreement, the Company was obligated to spend for ths purpose a
sum not to exceed $300,000, which the Liberian governm? nt was ulti-
mately to repay. After spending more than $115,000, Firestone con-
cluded that a harbor could not be built except at a cols that would
run into millions-a conclusion borne out by the subsea:ent cost to
the U. S. government of over $22 million. Neither Firestone nor Liberia
could afford to undertake so expensive a venture. In cons ~quence, the
agreement was cancelled by mutual consent and Firestc ^e absorbed
the full expense of the work already done.
The Planting Agreement
The Planting Agreement is a document of some corr. ralexity and
length. The Company is granted the right to lease not mt re than one
millio:i acres at an annual rental of 6? an acre for a term d 99 years.
This was the customary rental price of other concessions granted by
the Liberian government to foreign companies and indivi4iuals. How-
ever, a more important source of income for the Liberian overnment,
once the plantation became productive, would be a tax of -me percent
of the gross value of all rubber (and other products) expc rted by the
Company, calculated upon the closing price in the New Y >rk Rubber
NfarkEt on the day a shipment was made. This provision was super-
seded in 1950 when Liberia adopted an income tax. Fire-tone aided
the Li oerian government in drafting the basic income taa legislation
and in making itself fully subject to the new law's prop isions. The
Compr,ny voluntarily waived tax exemptions previously ?irovided in
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80BO1676RO01100080002-2
The Setting for
Firestone in Liberia
1926-1956
Liberia's "century of survival" began in the 1820's-
J. T. Smith, Washington, D. C.
TIIE FIRST SUCCESSFUL SETTLEMENT was here on tiny Providence Island in
1822. Shortly, the pioneer fathers moved on to the mainland where they named
the colony Monrovia for James Monroe, then President of the United States. The
population increased as immigrants continued to arrive from the United States
and Africans were freed from slave trading ships.
BY 1850, the colony had become a na-
tion. It had a constitution and a politi.
cal and social life based on that in the
United States. Here is the residence of
Joseph Jenkins Roberts, first President
of the only independent Negro repub.
lic in Africa.
Since the 1920's, Liberia has achieved steadily advancing economic
and social development-accelerated during and after World War II.
MONROVIA is the center of the na.
tion's cultural and commercial life.
(All photographs, unless other credits are
given, from Firestone News Service.)
ROBERTS FIELD airport's first runway
was carved out of the jungle by Fire.
stone, and it was a vital wartime link
in allied air routes. In a country still
plagued by inadequate transportation
facilities, it has had a major impact on
Liberian growth.
Approved For Release 2002/11/13 : CIA-RDP80BO1676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
A BUSY INTERSECTION in Monrovia.
The Bank of Monrovia, seen in the back-
g sound, was established by Firestone
when the British Bank of West Africa
withdrew in the early thirties, leaving
Liberia with no other banking service.
In 1.955, Firestone sold it to the First
National City Bank of New York. and
other investors are now starting addi-
tional banking ventures.
TREE CROPS--both wild and culti-
v ited---are Liberia's greatest potential
a id developed national resource. Fire-
slone's Harbel plantation, the world's
largest and most productive rubber
plantation, is seen here across the Farm-
ington River from a small Liberian
settlement.
1 Country of Contrasts-
Only about 150.t1O0 of Liberia's
citizens are takir rr an active part
in Liberia's nton, y economy and
its social and po'i-tical life. They
live mainly on th,, narrow coastal
plain. or on for, ign concessions,
although some are in the larger
towns and villag .s along the riv-
ers and feu: road , of the wooded,
hilly hinterland.
) MERICAN MISSIONARIES, from Liberia's start, have beef, a major source of
tpport for the young nation. Dr. George W. Harley and his .,ife -shown below
with natives--in the 1920's started a mission at Ganta, near the French Guinea
border. They are also operating vocational and nurses' trainiu- activities, a clinic
and hospital, and a leper colony.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
The tribal people-the great bulk of Liberia's population-adhere to
centuries-old customs and beliefs. The government's "unification
policy," designed to integrate these citizens into the political, eco-
nomic, and social life of the country, while overcoming deficiencies in
health, education, and productivity, is making slow, but steady
progress.
INSTALLATION of tri-
bal chiefs as provisional
delegates in the legisla.
tive body.
TRIBAL CHIEFS at the
second inauguration of
the present President,
William V. S. Tubman.
DESPITE LEGAL PROHIBITION of some of the worst cruelties and terrors of
the old native religion, the witch doctor--a combination of priest and dispenser of
"bush" medicine -is still greatly feared and respected. Here, in a tribal village, is
the lighter side of the old religion which is still being encouraged for recreational
reasons.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80BO1676RO01100080002-2
Public and Private Investment
in Liberia's Economic Development
1. END-LEASE FUNDS paid for the Free Port of Monrovia- one of the largest
and most modern on the West African coast. Aceommodalion of ocean-going
v-ssels was a prerequisite for increasing Liberia's major e3.ports, agricultural
products and iron ore.
FIRESTONE PRODUCES over 90 percent of Liberia's main export. rubber, on its
Harbel and--much smaller----Cavalla plantations. Beyond the dock at Harbel are
b-tildings for processing, baling, packing, and storing rubber. and in the back-
ground some of the 10 million rubber trees grown by Firestone. Firestone's total
tax and rent payments to the Liberian government in 1955 wee over $5.8 million.
or nearly 39 percent of the total governmental revenue.
T'HE LIBERIA MINING COMPANY,
whose largest stockholder is Republic
Teel Corporation, has a concession for
the rich Bomi Hills iron mines -- which.
next to agriculture, contribute most to
Liberia's gross national product.
THE ONLY RAILVOAD in Liberia's
1:3,000 square miles is this line, built
and operated by the Liberia Mining
Company, to haul or~ about 45 miles to
the Port of Monroe i.7. from which the
Company operates it- own ore carriers.
Approved For Release 2002/11/13 : CIA-RDP80BO1676RO01100080002-2
 Appr
A ROAD-BUILDING PROGRAM,
partly financed by Export-Import Bank
loans, is an important element in Li-
beria's nine-year plan for development,
as indicated by the fact that there are
only about 850 miles of improved and
unimproved roads in the country. The
only hard surfaced roads now are in and
around Monrovia and on the Firestone
plantations. At left is a typical Harbel
road.
FIRESTONE'S HYDROELECTRIC PLANT provides the Harbel plantation needs,
and the Company has its own telephone and water installations. Public utilities
are only beginning to be provided in Liberia, and the government's development
program includes provision of additional sewerage and water systems, and radio,
telephone, and electric services.
THE UNITED STATES-LIBERIA RA-
DIO CORPORATION is a Firestone
subsidiary, set up primarily to operate
Harbel's trans-Atlantic transmitter and
receiver, which keeps the Company's ex-
ecutives in close touch with the home
office in Akron, Ohio. It also provides
local radio communications for all Fire-
stone subsidiaries in Liberia and the
public generally.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
The Rubbei Plantations-
l' 'firestone is Researcher,
Planter, Prod sor, Shipper,
and General "Housekeeper"
for 25,00 Employees.
WAWA
TIIE PRODUCTION of rubber is a
hand operation. Here, in a newly cleared
lirld, stakes mark the spots in evenly
spaced rows where holes are to be dug
and prepared for young trees trans-
iiinted from the plantation's nuraerv.
TI e bud-grafted stump, shown below,
must be planted at exactly the right
depth. The permanent new budded tree,
su.h as that at the right, will sprout out
from the eye of the bud patch. Over the
ye.us, Firestone has developed trees
with higher and higher yields by bud-
grafting. Instead of increasing substan.
tially the size of its plantations, l ire-
stene now is replacing its older. less
productive stands with higher yielding
stocks.
The Company retts from the Lib-
erian, governnterr, and actively
operates about i00,000 acres-
approximately 9t}.000 at Harbel
and 10,000 at Cairdin. Its average
annual yield of natural rubber
per acre is 1.048 pounds, the high-
est in the world. ;Ind some of the
divisions are proYiucing as much
as 1,600 pounds.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : Cl
Firestone is Liberia's largest em-
ployer, and most of its unskilled
workers-about 22,000-are re-
cruited for field work from the
tribes in the hinterland.
FIELD WORK begins at daybreak, when
workers start out from divisional head-
quarters for the trees assigned to them
-usually about 250 to 300 trees each.
THE DAILY TAPPING of the rubber
trees is an important and delicate task,
because the way it is done can affect the
productivity and health of the tree. Fire-
stone trains new and inexperienced re-
cruits before they are assigned to regu-
lar tapping gangs, but usually it takes
several months for a tapper to become
proficient.
THE TAPPERS, after emptying rubber from the collecting cups into pails, carry
the liquid latex to a collection station where it is weighed, strained, and picked tip
by tanker trucks and delivered to the processing plant at Ilarbel.
Approved For Release 2002/11/13 : CIA-RDP80BO1676RO01100080002-2
 la 1RBEL'S LATEX PLANT is highly
nuwhanized and is the largest in the
world. Most of the liquid latex-about
80 percent in recent years - -is placed in
pewerful centrifuges which separate the
pure latex from most of its natural water
content.
T1lE REMAINING LATEX and scrap
rubber is coagulated, pressed into
sheets, dried and haled. Part of this
process is shown in the pictures below.
Liberia's Largest Trainer of
luman Skills
Most of Firestonr's skilled and
semiskilled worke rs--called "clas-
sified employees -are former
field hands wh,, have been
trained by the Company. During
the past three decades, many
have moved on t+, other jobs in
Liberia.
$ntong the 3,000 classified em-
ployees now with Firestone are
factory machine operators and
maintenance and repair men, as
well as carpenter:. painters, ma-
sons, electricians, draftsmen, auto
mechanics, and truck drivers.
Some are supervisory personnel.
or have such office positions as
secretaries, boot/ eepers, office
machine operators, clerks, and
messengers.
SHU'T',LE CRAFT r, gularly carry rub-
her from Harbel to '_blonrovia, where it
is transhipped to the United States; and
they also bring supplies to the planta-
tion.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : Cl
Firestone Assistance to
Liberian Farmers
Seeds, cuttings, and stock of the
many tropical plants grown and
tested in the extensive botanical
nursery at Harbel are given free
to any Liberian who wants them,
and Firestone also will provide
free technical services and advice.
THE HARBEL CHEMISTS constantly
seek new methods to produce and im-
prove rubber. Firestone developed and
has distributed free over 4.5 million
seedlings of a hardy and high-yielding
rubber tree which is well adapted to the
needs of Liberian farmers. And, upon
request, Firestone purchases and mar-
kets their rubber.
OIL PALMS--important to the native
diet as well as for export -are grown in
the nursery at Harbel. Also, Firestone
technicians are developing a more rug-
ged, higher yielding strain of the up-
land rice traditionally grown by the
tribal people.
THE NATIVE "BUSH" COW, though miniature in size and far too few to meet
the severe protein deficiency of most Liberians, is disease resistant. Firestone,
through selective breeding of these indigeneous cattle, has developed a small
herd which can he fattened to double the size of the unimproved stock. It expects
to be able, within a few years, to provide breeding stock to Liberians.
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 age 2002111113: CIA-RDP80BOl 676R001100080002-2
I'REE HOUSING is provided for all
Firestone workers and their families.
The houses of field workers--purposely
ropied from the native adobe and
thatched-roof hutsare gradually being
replaced by houses of brick with tile
roofs.
F~)OD AND HOUSEHOLD GOODS are
:cld to all Firestone workers at subsi-
ii zed prices at retail stores on the plan-
tations. The United States Trading Com-
pany, a Firestone subsidiary, which
handles purchases for the stores, is Li-
beria's largest importer. wholesaler, and
w irehousing agency. Through its sales
to Liberian wholesalers and retailers, it
has exercised a restraining influence on
price rises for consumer goods and light
capital equipment.
li'irestone-Pace Setter for
Wage and Price Levels,
Labor RRelations, and
Health, I,"dircational, and
Recreat aonal Services
OVER THE ] E:1R. Firestone has paid
the highest wages an the country for
each category of skilled and unskilled
labor. and it empl-%s over 10 times
more workers than the next largest pri-
vate employer. Its wridards on wages
and fringe benefits ire copied to the
best of their abilitii by other foreign
concessions.
FREE IIEAI,TI1 Sha.VICES are pro.
vidcd by a medical stiff at well-equipped
hospitals on each pl;mtation, at health
centers in each fie!d division, and a
clinic near the central administration
building at Harbel. In 1955, more than
half a million visit by patients were
handled by the F)lirbel medical fa-
cilities.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
Free schools, churches, club-
houses, and sports facilities for
all workers and their families are
part of Firestone's contribution
to employee welfare and morale,
and to the government's unifica-
tion policy.
A LARGE CENTRAL SCHOOL offers
additional courses for adults and a spe-
cial 13- to 16-month clerical training
course for selected young employees,
during which they receive pay and
maintenance.
AT HARBEL'S 15 SCHOOLS- and
more are being added each year chil-
dren take an elementary course, first to
eighth grades, in the mornings; a basic
literacy course is offered for adults in
the afternoons and evenings.
THE ELEMENTARY CURRICULUM
is identical with that in the Liberian
government's schools. The government
selects teachers and inspects the schools
regularly; Firestone pays teachers' sal-
aries and all other costs of the schools.
SATISFACTORY COMPLETION of an elementary school education in English
and vocational training at the plantation makes employees eligible for scholarships
for advanced vocational schools in Liberia, followed by two years at Cuttington
College. The best of the College scholarship students may be sent to the United
States for further training. Below is the president's office, library, and science
building at Cuttington College one of the two institutions of higher learning in
Liberia.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 11 ,J13: CIA-RDP80B01676R001100080002-2
TlIE "FIRESTONE BUNGALOW" has
been developed to provide comfortable
living for American and European em-
ployees despite Liberia's heat, high rain-
fall, and teeming insect life.
NI; ELEMENTARY SCHOOL is pro-
vided for children of foreign employees,
but parents must send older children to
their home countries for secondary
,chooling. The Company pays transpor-
ta ion costs for such students.
dtnerican and iiuropea.n em-
ployees and their- families, like
the Liberians, reo eive substantial
fringe benefits. ,'though the Lib-
erian government originally set a
limit of 1,500 white Firestone em-
ployees, the to,ral--including
those in Liberia, on. home leave,
and the unfilled vacancies-now
amounts to only 180, of whom
115 are Americasrs. Most of the
foreign employee- in Liberia are
accompanied by their families- -
103 wives and 99 hildren.
MEATS AND DAIRY PRODUCTS are
important among tite provisions im-
ported and sold at near cost to Firestone
nniployees by the ,ell-stocked USTC
it-ire.
THE FIRESTONE GUEST HOUSE:
overlooks this 9-hole eolf course at Har-
bel, and there is an:..ther, larger club-
house for the foreiL n employees. The
clubhouses of both fereign and Liberian
employees are used tor dances, enter-
tainments- sound mo, ies. and other so-
cial events.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
the Planting Agreement and, since, has paid the maximum income tax
rate of 25 percent. In addition, the Company undertook in the Plant-
ing Agreement, and continues, to pay certain taxes-including hut
taxes and other direct levies-for its Liberian employees during their
terms of service.
In return for these annual payments, Firestone was granted the
rights to:
? Plant, process, and export rubber and other agricultural products.
? Mine any minerals on its leased lands.
? Build and use roads, bridges, airfields, pipelines, telephone lines,
radio stations, hydroeletric facilities, and power transmission
lines on and between its leased lands.
? Use public highways, public transportation, and harbor facilities;
import duty free the equipment and supplies needed for its
operations.
? Construct and operate a trans-Atlantic radio transmitter and re-
ceiver so that it would have direct and rapid communication
with the main office in Akron, Ohio.
Firestone agreed to import foreign laborers only with the Liberian
government's permission and not to employ more than 1,500 whites at
any time. Disputes between the Liberian government and Fire-
stone which could not be settled by mutual agreement were to be
decided by three arbitrators appointed respectively by the Liberian
government, Firestone, and the Liberian Supreme Court. If either
party wished to appeal the decision of this tribunal, the Liberian gov-
ernment undertook to arrange with the U.S. Department of State for
a further arbitration-presumably at an international level-of the
matters in dispute.
The Loan Agreement
The most difficult to negotiate was the Loan Agreement. Under its
terms, the Liberian government was to issue not more than $5 million
of 40-year, seven-percent gold bonds. The Finance Corporation of
America was immediately to purchase an initial issue of half this
amount at 90. The remainder could be issued and would be purchased
by the Finance Corporation only when the revenues of the Liberian
government exceeded $800,000 a year for two consecutive years. Serv-
ice of the loan (including interest and gradual accumulation of a sink-
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
ing fund to retire the principal) was to be a fi; t charge on the
government's revenues obtained from import duties, he head tax, and
the FirestonePlantations Company.
Interest at seven percent seems high today, but it was the standard
rate at which moss, foreign governments-including even the French
and the Belgian-were borrowing in the New Yo-k money market
throughout the 1920's. Indeed, in view of Liberia's p rformance record
on its previous loans, it is somewhat surprising that `he rate was fixed
that low. Several South American governments with financial his-
tories no worse-and sometimes better-than that of Liberia could
only borrow at eight percent or higher during these Efame years. It may
also be recalled that Wall Street had already turn- l down a loan to
Liberia on any terms. Moreover, the interest rate was subsequently
reduced in conformity with the general downward trend of interest
rates, as well as to ease Liberia's difficult financial situation.
The interest rate was not responsible for the protr acted negotiations,
nor did it cause most of the subsequent disputes over operation of the
Loan Agreement. Problems arose, instead, from othc provisions of the
Loan Agreement, which were modeled upon the ea tier loan proposal
of the U.S. government. The latter's defeated loan, proposal was in-
tended not only to provide needed financial aid to Liberia, but also to
induce the Liberian government to adopt and fa.hfully carry out
widespread fiscal and administrative reforms. Provis ons were designed
to ensure that the Liberian government would live within its means
and to stop, if possible, the drain upon the nation A treasury of the
traditional Liberian spoils system. To this end, the '.922 governmental
loan proposal provided for supervision of the entire Liberian financial
system by a team of American advisers and it spe ified in detail the
reforms to be adopted as a condition of obtaining a 1, In.
Both the U.S. Department of State and Harvey S. Firestone were
convinced that similar provisions had to be included in the 1926 Loan
Agreement to assure that the loan would be serviced and would provide
more than a temporary benefit. Accordingly, as fina_ y and most reluc-
tantly approved by the Liberian Legislature, the 19^i Loan Agreement
provided for an American financial adviser, to be Nominated by the
President of the United States and appointed by the President of
Liberia, and a number of subordinate advisers and auditors who were
also to be Americans. These supervisors-though fewer in number
and with more limited powers than proposed in 1i22-were granted
extensive powers over the whole Liberian financial establishment. The
Agreement carefully described these powers and defined at length the
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
reforms the Liberian government was to institute and which the
American supervisors were to ensure that the government subsequently
would follow. In addition, the Agreement contained an elaborate slid-
ing scale formula by which successive increments in government reve-
nues were to be divided among service of the loan, ordinary govern-
mental activities, and improvements in public health, road building,
and other development purposes.
From the beginning, these provisions of the Loan Agreement were
extremely irksome to the Liberians who regarded them as improper
infringements of Liberian sovereignty. In effect, the Liberians felt
that their government was no longer master in its own financial house-
hold. It could not contract any new debts, external or internal, without
permission. It could not spend its revenues as it wished. It had to follow
budgetary, operating, and accounting procedures which-though still
far inferior to those customarily used by the U.S. and West European
governments-were nevertheless much more stringent than anything
known previously in Liberia. The Liberians resented the salaries of
the American supervisors, which were comparable to those paid for
similar work in the United States but at least double those customary
in Liberia. Compared with these grievances arising from the Loan
Agreement, other conflicts and frictions between Liberia and Firestone
during the past 30 years have been of very minor importance.
From the point of view of the U.S. government and Firestone, these
provisions of the 1926 Loan Agreement were seen in an entirely differ-
ent light. Both believed that it was essential to bring some order into
Liberian finances and both were convinced that the Liberians would
not or could not do so themselves. Both felt that Liberia's failure to
reform its own financial household since the 1906 loan proved its un-
willingness or incapacity to undertake such measures without friendly
but firm outside urging and support. Nonetheless, Mr. Firestone had
apparently been reluctant to be a party at interest in the Loan Agree-
ment, having vainly tried to revive the possibility of a governmental
loan and then to induce a neutral group of Wall Street bankers to provide
the funds. Whether, at the time, he anticipated the subsequent friction
and bitterness over the Loan Agreement is impossible now to ascertain.
In administering the Agreement, the Finance Corporation recognized
the basic resentment of the Liberians over the powers accorded to
foreign fiscal officers. Unless Liberian violations were major or basically
weakened the general purposes of the Loan Agreement, no objections
were made. by the Corporation, especially after 1939. But, unquestion-
ably, Firestone officials were no less happy than the Liberians them-
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
selves when the final repayment was made and tl. ~ Loan Agreement
terminated.
Although the Agreement provided for a total of $:i million, of which
half was to be made available initially, only a little over $2.25 million
of bonds were ever issued to the Finance Corporati 'n by the Liberian
government. Most of the proceeds were allocated to retire the 1911
loan, with its large arrears of interest, to repay su,all sums advanced
for emergency purposes by the U.S. government in irevious years, and
to liquidate Liberia's internal and floating debt, which amounted to
over $600,000 in 1926. The relatively small remaini , balance of about
$170,000 was used for various public works.
Relations between the Liberian government anr: the Finance Cor-
poration were reasonably harmonious until the + nset of the great
depression. From 1930 on, however, the Finance Corporation refused
to make further advances under the loan, chargi:z, the government
with violations of the Agreement, including accu iulation of a new
floating debt which amounted to $680,000 within two years. In 1932,
the Liberian Legislature passed a moratorium on the 1926 loan, the
acting financial adviser was dismissed, and numero,is other violations
of the Agreement were committed. These actionz- occurred concur-
rently with, and were related to, the dispute over tb_t slavery issue and
the League of Nations' plan of assistance, and we re vigorously pro-
tested by the U.S. government, the Finance Corporation, and the
League. Despite Liberia's refusal to rescind them, th Finance Corpora-
tion was nevertheless willing to negotiate a revision, of the Agreement,
reducing the interest rate to five percent and foregoing the prior claim
of the loan service on the major government revenues. In addition, the
Finance Corporation was willing to forego interest entirely in any
year in which total government revenues fell belt w $500,000 and to
advance $150,000 as working capital for the Leag-:e's plan of assist-
ance, provided Liberia ratified it. It was not until January 1935, when
the League plan of assistance was a dead issue, tha the Liberian gov-
ernment signed a Supplementary Loan Agreement with the Finance
Corporation which put changes similar, though neDG identical, to the
foregoing into effect and elaborated the sliding scale formula for divid-
ing the successive increments of total government revenue above
$450,000 a year.
Several other revisions of the Agreement were made in subsequent
years, the most important being in 1939 and 1944, when the interest
rate was voluntarily reduced to four percent by the Finance Corpora-
tion and the sliding scale formula changed again. Increasing govern-
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
ment revenues during the 1940's enabled the Liberian government to
accelerate repayment of the loan. In 1952, the last payment was made
and the 1926 Loan Agreement came to an end. The repayment of the
loan was made possible mainly by the large revenues received from the
Firestone Plantations Company.
Some indication of how happy Liberians were to be released from
restrictions of the Loan Agreement are found in their celebration of its
ending. Credit for paying off the loan 14 years before the final install-
ment was due was given to President Tubman, who was elected to
office in 1944 when the accelerated amortization began. In gratitude
for his achievement, the Liberian Legislature voted in 1952 to erect a
statue of President Tubman, which was completed and unveiled early
in 1956. On the pedestal of the statue-which stands in front of the
Capitol building in Monrovia-is an inscription which reads:
This Monument erected by the People of Liberia is dedicated
to the great relief brought to the Country by the Tubman
Administration in the retirement of the 1926 Loan with its
humiliating and strangulating effects on the economy of the
Nation.
In his speech at the dedication of the statue, President Tubman
pointed out how fitting it was that he should be chief executive when
the loan was retired, since, when the Agreement was under considera-
tion by the Liberian Legislature, it "was made a party measure, and
to me was committed the responsibility of sponsoring the bill in the
Senate and of introducing it, which I did, and the bill passed into law."
The President added that, together with the coming of the Firestone
Plantations Company, "the 1926 loan with all of its objectionable
features and aspects [nevertheless] solved all of the problems of border
incidents and threatened sovereignty." Thus, President Tubman judi-
ciously acknowledged not only the bitter feelings of two generations of
his countrymen about the loan, but also the sagacity of former Presi-
dent King who had originally agreed to the loan in 1926 for precisely
such political reasons.
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
Firestone's Operations in Liberia
'-NO REGULAR FIRESTONE OFFICIAL had ever had any experi-
ence with the planting, cultivating, tapping, or processing of natural
rubber, when the Firestone Plantations Company began rehabilitat-
ing Mt. Barclay in mid-1924. Only two of the major kmerican rubber
companies-Goodyear and the United States Rubber Company-were
by then operating rubber plantations, which they had s K,arted some years
c arlier in Southeast Asia. A number of small American-owned com-
panies were growing rubber in the Philippines. Beyo id this, however,
few Americans had had practical experience of rubb r growing at the
time Firestone came to Liberia.
DEVELOPMENT OF THE FIRESTONE PLANTATIONS
EVEN BEFORE THE PLANTING AGREEMENT was rati-
f.ed, two areas had been selected for plantation deveompment by Fire-
stone exploration parties. The first area, which was to become the main
Harbel plantation, was on the Du River about 20 .miles east of the
lilt. Barclay estate and about 40 miles east of Mona?via. The second,
tj become the Cavalla plantation, was near Cape Palmas about 240
miles from Monrovia on the Cavalla River, which forms the bound-
ary between Liberia and the French Ivory Coast. The development and
operations of the Harbel and Cavalla plantations aro similar stories,
although Harbel is far larger, and its activities are much more exten-
sive. As a result, the Harbel plantation receives the 1Lulk of attention
in this study.
The first general manager of the Plantations Company in Liberia
was Donald A. Ross, who had made the initial visit to the country on
tie Company's behalf in 1923. Under his direction, the sites of the
plantations were chosen; the bush on the plantations was laboriously
out down and burned; and seedlings from the nursery started earlier
at Mt. Barclay were planted. By the end of 1928, more than 15,000
acres had been cleared and planted. Planting continued at a rapid rate
for four more years.
Earlier in 1928, the Company began to use highyielding, bud-
grafted stock purchased in the Netherlands East Indies. The seeds of
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
ordinary Hevea trees will produce a mature tree with a strong and
healthy root but with a limited latex yield. By repeated cross-breeding
of higher than average yielding specimens, the Dutch were able to
develop strains of trees-called "clones"-which produced double and
eventually triple the amount of latex. But their root systems tended
to be weak and they did not always breed true when raised from seed.
For this reason, the best method was soon found to be the grafting of
a bud from a known high-yielding clone onto an ordinary seedling root.
Higher and higher yielding clones have been developed over the years,
some by Firestone in Liberia. Today, an acre planted with trees from
high-yielding clones will often produce as much as four times more
than the 400 to 500 pounds from ordinary seedling trees. In 1931, Fire-
stone stopped planting seedling trees and switched to bud-grafted stock.
With the onset of the great depression in 1929, rubber prices began
to fall and eventually reached a low of 3? a pound in June 1932. By
then, Firestone's rubber trees planted in 1926 and 1927 were nearing
tapping age, but rubber prices at so low a level would pay only a small
portion of the costs of tapping, processing, and transporting. In con-
sequence, tapping was not started and planting was stopped. The
Liberian and American staffs were drastically reduced and the planta-
tions were put on a stand-by basis. This necessary action coincided
with difficulties between Liberia and the League of Nations and be-
tween Liberia and Firestone over Liberia's failure to live up to the
terms of the 1926 Loan Agreement. These years were the most discour-
aging in Liberian-Firestone relations as well as the most difficult
financial period for both.
In 1934, rubber demand and prices began to move upward again, and
the acres already in rubber were soon rehabilitated and regularly
tapped. During the remainder of the 1930's, additional acres were
cleared and more rubber trees planted. By 1940, some 72,500 acres
had been planted, and 7,000 tons of latex were being produced from the
39,200 acres which were by then of tapping age.
World War II gave the Firestone operation in Liberia a worldwide
significance. There was not only the part played by Firestone in
making Liberia a major airbase on the vital South Atlantic route to
the European, African, and Pacific battlefronts. Of equal importance
was the fact that the Firestone plantations in Liberia were in large-
scale production and, with Ceylon, were the only sources of culti-
vated rubber accessible to the Allies after the Japanese conquest of
Southeast Asia. The Company made every effort to increase its pro-
duction as rapidly as possible. Trees were tapped before they reached
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
the customary age, and mature trees were overtafped by double
panelling, shortened resting periods, and other measures, with the risk
of reducing their remaining productive life. By these means, the out-
rut of the two plantations was more than doubled between 1940 and
1943, reaching 14,400 tons in the latter year. In 1945 Firestone's pro-
duction was about 20,000 tons a year. All of this :Latural rubber-
much of it high-grade concentrated latex-went ir. r.o the vital but
c.iminishing stockpile of natural rubber which was one of the U.S.
government's precious assets during the war.
After the war, overtapping was stopped and production temporarily
c.eclined. However, planting had continued during th. war and by the
late 1940's new acreage was coming into producti,n. Also, further
progress was made in the development of higher yielding clones and of
improved cultivating and tapping methods, and each new section was
more productive than the older stands of trees. Majc r acreage expan-
ion stopped early in the 1950's. Instead of continuin to increase sub-
stantially the size of the plantations, Firestone det ided that future
increases in production should be obtained by repla,ing old clones in
all of the older sections with high-yielding clones Since 1954, an
intensive replanting program has been underway. R file theoretically
this program will never be finished, it is estimated that the present
plan will take 25 to 30 years to complete.
Today, the Harbel plantation contains over eigl t million rubber
trees on approximately 90,000 acres in a roughly h,. art-shaped area,
which measures about 20 miles at its longest and vs dest points. The
Cavalla plantation has some two million rubber tree; in a rectangular
area of about 10,000 acres. In total, the Company tetively operates
L00,000 acres on which over 10 million rubber trees g-ow. Total output
in 1955 was over 38,000 tons of concentrated liquid latex and coagu-
lated sheet rubber. About 80 percent was shipped in the form of latex
and 20 percent as baled coagulated sheets. The avert a yield of 1,048
pounds per acre per year is the highest in the world, while on divisions
planted with newer clones, the yield is as much as 1 i00 pounds.
The two plantations contain 275 miles of improv A roads suitable
for use by the heavy latex tanker trucks in all weather. In addition,
thereare over 660 miles of roads suitable for motor ci.rs in dry weather
and for jeeps all year round.
It was essential to locate the Harbel plantation in a river, as no
road existed beyond Careysburg, a few miles north ast of Mt. Bar-
clay, and not enough unoccupied land was available rear the road be-
i;ween that village and Monrovia. The site chosen was only about a
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
dozen miles from the mouth of the Du as measured in a straight line,
but the distance that actually had to be travelled on its serpentine
course was close to 40 miles. As the Harbel plantation was gradually
extended eastward in later years, it became apparent that the much
wider and straighter Farmington River, some seven miles beyond the
Du, offered a better means of transportation. Today, the Farmington
River forms the eastern boundary of the plantation and the docks
on it are only a dozen miles by water to the sea.
The Harbel plantation in 1940 built the largest latex processing
plant in the world. This factory is adjacent to the docks on the Farm-
ington River, at which the coasting vessels that regularly ply to and
from Monrovia load concentrated latex and baled rubber and unload
plantation supplies. A short distance above the docks is the hydro..
electric plant completed in 1942. This supplies power for the factory
and the trans-Atlantic radio transmitter, for electric light and tele-
phone systems on the plantation, and for residential and hospital cook-
ing, heating, and refrigerating purposes.
OPERATION AND ORGANIZATION OF THE PLANTATIONS
A VERY LARGE ELEMENT OF UNSKILLED LABOR is
required in the production of natural rubber. Except in clearing the
land for planting, no way has yet been found to introduce any sig-
nificant degree of mechanization into the basic field operation. In
contrast, the subsequent stages of processing are highly mechanized.
But the planting and tapping of the rubber trees, and transporting raw
latex to the collecting stations, where it is picked up by the tanker
trucks, are all essentially hand operations. This is why it is economical
to produce natural rubber only in regions with an ample and relatively
cheap supply of labor.
The plantation is made up of divisions of from 1,500 to 2,500 acres,
depending upon natural boundaries and the needs of efficient super-
vision. (There are 45 of these divisions at Harbel and six at Cavalla.)
Each division has a central headquarters consisting of an office, a
warehouse for supplies and equipment, and a collection station con-
taining the tank in which raw latex is stored and the equipment for
weighing and straining it as it comes from the field. Nearby are the
villages in which the tappers live and the divisional store, carpentry
and repair shop, health center, and school. The divisional superintend-
ent-either an American or European-also usually has his house near
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
the headquarters. His staff-all Liberians-consists of several over-
eers, a clerk, a male nurse or a dresser, and a numf er of skilled and
semiskilled workers at the collection station and tl.e carpentry and
i epair shop.
The tappers are organized into field units of from 2+ to 30 men under
1 he control of a headman. Each overseer supervises hree to five field
units. All overseers and most headmen speak Englis ti, as well as one
or more tribal dialects. In contrast, a majority of tie tappers speak
only their tribal languages and understand little or i o English.
Field work begins at daybreak when the units asse ruble at divisional
headquarters under their respective headmen and or rseers. The clerk
notes the names 1 of those reporting for work. Then after the super-
intendent gives any special instructions for the day, ca,ch tapper walks
to his assigned area which, depending upon when cr the terrain is
easy or difficult to traverse, contains from 250 to ,O0 trees. At each
ree, the tapper first collects the scrap from the pr vious day's tap-
ling which has coagulated in the collecting cup am spout, along the
liagonal incision on the tree trunk, and on the group around the tree.
Then, with a sharp curved knife especially develope for the purpose,
ile cuts away another thin layer of bark the full lendth of the incision
,nade by previous tappings. This exposes a new la, er of cells which
immediately begins to ooze latex. 'Phis brilliantly hite, milky fluid
flows down the incision into the spout and drips into the collecting
cup suspended below it. The tapper squirts a fe ?- drops of anti-
coagulating chemical into the cup and moves on to 1 iie next tree. Less
than a minute per tree is required, except in bad wei.ther. When all of
his trees have been tapped, the worker has a rest pt rind of about two
hours. However, several days a month this period is used for weeding
any shade-loving plants which may have sprung up under the rubber
trees. For this the tapper is paid extra.
At about 10:30 a.m., a gong, which can be hear :i throughout the
division, is the signal for the tappers to start a see( ad round of their
assigned trees. This time, the tapper has two stainl' s steel pails sus-
pended by cords at opposite ends of a "picul stick" carried across the
Most workers do not use their tribal names but take new , yes upon arriving at
the plantation. These may be ordinary Christian names lik Joseph (sometimes
there are so many Josephs that they are numbered in order c` seniority), Thomas,
and Michael, or the names of good things and events, like Linner Pail, Pay Day,
Christmas, or English translations of tribal names. In general the taking of a new
name signifies that the time spent on the plantation is a new or different life
,eparate and distinct from that of the tribe.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
shoulders. At each tree, he empties the collecting cup and returns it to
catch the much smaller quantity of latex which will flow during the
remainder of the day and overnight.
When the tapper returns to divisional headquarters, his latex and
scrap are weighed and recorded, and, after cleaning his buckets and
equipment, his working day is over. He has been on the job from six
and one-half to seven and one-half hours-during which, on most
days, he has had a two-hour rest period-and his work is finished by
about one o'clock in the afternoon. Thereafter, his time is his own.
At the collection station, the latex is strained and stored in a large
tank and the ground and tree scrap is washed and piled. Each after-
noon, the liquid latex is collected by large tanker trucks, and several
times a week ordinary trucks pick up the scrap. At the Harbel factory,
which is highly mechanized, powerful centrifuges, especially designed
for Firestone, concentrate most of the latex-that is, its water content,
is reduced by about two-thirds. It is then stored to await shipment in
the tanker vessels. The rest of the latex goes to vats where it is coagu-
lated, pressed into sheets, dried, and baled, as is the scrap rubber. The
percentage to be shipped as concentrated liquid latex is determined by
the main office in Akron in the light of market demand, and in recent
years, the demand for latex has been high.
Clearing and planting tasks on the Harbel plantation are assigned
to a separate group of Liberian workers, many of whom are skilled or
semiskilled tractor and ditching machine operators, or are trained in
the delicate work of bud grafting. A special construction gang main-
tains and improves existing roads and builds new ones. Other workers
are employed at the sawmill, and brick and tile factory, which supply
the need for construction materials, and at a small workshop which
makes latex cups, soap, and rubber sandals. Another group is con-
tinuously engaged in erecting brick-walled and tile-roofed family
houses, which are replacing the native-type thatched huts originally
provided by Firestone to house its Liberian employees.
The resident head of Firestone's operations in Liberia now is Ross E.
Wilson, who holds the position of vice-president of the Firestone
Plantations Company and general manager of the plantations and sub-
sidiary activities. An electrical engineer by training, he was sent by
Firestone to Liberia as a young man in 1926, and has worked his way
up in the Company to his present position. Senior officials reporting
directly to the general manager are the managers of the Plantations,
Production, Research, Industrial Services, and Supply Departments,
and the Comptroller.
Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
The Plantations Department is responsible for all t.gricultural oper-
ations, except research, on both plantations. In adc!.tion to the pro-
duction of rubber, it operates a poultry farm and a 1,'00-acre oil palm
project to help meet employees' food needs; and it T ?ovides technical
and financial assistance to independent Liberian rub' ?er planters. The
superintendents of the rubber producing divisions on ,he Harbel plan-
tation report to the Department's manager througl three group in-
spectors; the divisions at Cavalla also report to Alm through the
manager of the Cavalla plantation.
The Production Department's main functions ar., to operate the
latex processing factory, the sawmill and brick an,' tile plants, and
_~'irestone's electric power, telephone, radio, and moi or transport sys-
1;ems; and to provide engineering and maintenanc services for all
installations, facilities, and equipment.
The Research Department has a botanical divisi< n responsible for
ileveloping stronger, higher yielding, and more diseas -resistant rubber
trees and improving methods of planting, cultivating, and tapping.
This continuing effort has developed trees yielding 2,000 pounds per
icre under actual field conditions. In addition, it has xtensive research
irograms in other biological fields, many of them of great importance
to the Liberian people. A chemical division maker continuous tests
for control purposes of the raw and concentrated latex, does basic
research on latex structure, and conducts researcr experiments de-
igned to improve rubber processing, handling, and ransportation.
The Industrial Services Department handles all l ? bor-management
relations-including wages, hours, working eonditiora, workers' griev-
ances, labor recruiting, workmen's compensation, p, nsion retirement,
food and other subsidies-both for Liberian and foreign employees.
In addition, its educational, medical, and recreational divisions provide
free service for Liberian and foreign employees and their families on
both plantations.
The Supply Department orders, stores, and di,-, ributes the wide
variety of equipment and supplies needed for the op, ration and main-
tenance of the plantations. In addition, it supervises the United States
Trading Company, the wholly owned Firestone subsidiary, which does
a general importing and wholesaling business in M nrovia and oper-
ates retail stores on the plantations.
The general manager reports directly to the president of the Fire-
stone Plantations Company in Akron, Byron H. Ls,rabee, with whom
he is in direct radio communication several times dily. Mr. Larabee
is assisted by a small staff in Akron-and branch oaices in New York
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
and Baltimore-which handles all purchasing for the plantations and
Liberian-
sales the plantations'
the products,
of be
buprices dgets to
annual fixes
the departments and
produced rubber, er, approves p postaudits their accounts, and recruits American employees. In general,
the Akron office approves all major policy decisions, the most impor-
tant of which are referred to Harvey S. Firestone, Jr., the chairman
of the board of the parent corporation.
One major responsibility of the general manager is to act, in effect,
as the plantations' "Minister of External Affairs." As the chief Fire-
stone representative in Liberia, he handles-or delegates to his depart-
mental managers-relationships with top Liberian government officials,
with the foreign embassies in Monrovia, and with the heads of the
other foreign-owned companies in the country. This important respon-
sibility requires diplomatic skill, flexibility, and resourcefulness. The
general manager visits Monrovia at least once a week and talks regu-
larly with the President of Liberia and the American Ambassador both
on Firestone business and on a wide variety of other matters on which
his personal information and advice is sought.
Despite direct daily radio communication, frequent letters, and
periodic visits to Liberia by the president of the Plantations Company,
there are many important matters, both of a routine and an emergency
nature, on which the resident staff must exercise initiative and judg-
ment. In consequence, considerable decentralization of decision
making is necessary, and is encouraged. This arrangement has worked
successfully, in part because of Firestone's policy of filling its top
positions in Liberia and in Akron with broad-gauge people who,
though they possess many specialties, are also able to operate in a
wide variety of subject and administrative fields.
LIBERIAN WORKERS AND COMMUNITY SERVICES
THE ANNUAL AVERAGE of total Liberian workers
in all categories regularly employed by the Company is approximately
25,000. Of this total, slightly over 3,000 are classified as skilled or
semiskilled; the remainder, unskilled. One-third are from the Kpelle
tribe, which inhabits a large area of central Liberia on both sides of
the main road to Ganta. Nearly 50 percent are from four tribes
whose territories bound that of the Kpelle on the north, east, and tribes
gre south. The remainder
spa selyl nha ted parts
lantatins and i n moreother
distances froom th p
of the country.
Approved For Release 2002/11/13 : CIA-RDP80B01676RO01100080002-2
 Approved For Release 2002/11/13 : CIA-RDP80B01676R001100080002-2
Labor Recruitment and Working Conditions
In a country like Liberia where the bulk o the population still
lives in a largely self-sufficient tribal society, tht recruitment of labor
cannot be left to the automatic operation of ma ket forces. This was
even more true 30 years ago when Firestone first ,ame to Liberia.
The labor recruitment problem faced by Fi: -:,stone was common
during the 19th and early 20th centuries as large-