136 REPORT OF THE HARVARD AFRICAN EXPEDITION 
by the World War, and of the reduction in customs receipts, was again near 
bankruptey. Not only was the interest on the loan not paid, but the amount 
owed to the Liberian frontier force had greatly increased. The Liberian Gov- 
ernment issued bonds to the amount of some $215,000 to cover this indebted- 
ness, yet at the end of the World War it owed nearly $91,000 to the officers 
and men. The British Bank of West Africa finally had to come to the aid of 
the Government to which it gave a temporary loan of some hundred thousand 
dollars. In September 1914, the American Minister in Monrovia cabled the 
State Department that financial assistance for Liberia was imperative and in 
the same year the United States Treasury established a credit of five million 
dollars in favor of Liberia, under authority of the Second Liberty Loan Act 
of September 24, 1917, which empowered the President to place credits at the 
disposal of the Allies for the purpose of prosecuting the War. ‘This loan to 
Liberia was conditional on the inauguration of a certain program. It converted 
the administration of the International Loan into an exclusively American 
receivership which would control internal as well as external revenue, and 
provided that American citizens should act as commissioners to establish and 
maintain a just and equitable administration of the hinterland and to preserve 
order therein. The Secretary of State of Liberia accepted this loan, but ob- 
viously it was not popular with the people or with the Government, particu- 
larly the clause about maintaining a just and equitable administration of the 
hinterland. 
The Liberian Commission appointed to arbitrate on the question of this 
loan and its terms did not arrive in the United States until March 6, 1921, 
two days after President Harding’s inauguration, and on July 2nd of that year, 
when the war was declared at an end, it became necessary for the President 
to obtain the consent of Congress to any loan. Secretary of State Hughes 
wrote to the Senate suggesting a resolution approving such a loan, and President 
Harding also wrote to the President of the Senate that the loan was an obli- 
gation which the executive could not discharge without the approval of Congress. 
Secretary Hughes further declared that the loan was a moral obligation upon 
the United States. Appearing before the Committee on Ways and Means of 
the House in 1922, he said: ‘‘I came to the conclusion that as we had notified 
Liberia that this credit was open, as we had asked the British and French to 
retire and to make no further plans, and had assured them that we had an 
American program here and did not want or desire anything to stand in the 
way of carrying out that American program, after Liberia had lost her reason- 
able opportunities in the meantime to enter into negotiations with others, it 
was our duty to go ahead and make our word good. I thought that to default 
on one’s word in such a case would be regarded among business men in private 
affairs as very sharp practice and I felt that it was our duty to go ahead, and 
I so informed the President.” ! 
In spite of this favorable endorsement from our State Department and the 
1 Credit for the Government of Liberia, Hearing before the Committee of Ways and Means, House 
of Representatives, Part II, p. 145. 
