Lost Markets and Economic Decline
Liberia's indebtedness to the British banks coincided with the worldwide depression of the 1870s, which caused a sharp drop in prices and in demand for the country's exports and thereby cut sharply into the revenues from customs duties on which the treasury depended to repay the debt. One by one, during the late nineteenth century, Liberia lost customers for its cash crops to foreign competitors, as a result of changing markets and technological developments. Its sugarcane industry succumbed to competition from the West Indies and from sugar beets in Europe. A coffee boom that actually brought increased production in the 1870s was eventually undercut by Brazilian and Costa Rican competitors for the same markets. The demand for camwood ceased after synthetic dyes were perfected in the 1890s. Liberia was replaced by Nigeria as a supplier of palm oil to Britain and by Egypt as a source of cotton for British mills. Introduction of steamboats to the coastal trade ended the demand for new sailing ships. Liberia even lost its markets for piassava fiber when British and French buyers substituted raw material bought more cheaply from their own colonies to produce the raffia furnishings that were then fashionable.
Government revenues were lacking to improve the infrastructure for collecting and transporting crops to market, and government policy restricted foreign economic activity in the interior. Customs revenues decreased to a point at which the government was unable to meet its obligations under the loan agreement, and the treasury was unable to meet the day?to?day expenses of government. interests, which were largely mulatto and Republican, were outraged at the terms accepted by Roye, who compounded his political problems when he announced that the 1871 elections would be postponed because of the economic crisis and that his term would be extended to four years. The legislature voted a joint resolution calling on the president to resign; when he refused to step down, Roye was impeached and imprisoned. He died under mysterious circumstances a short time later, apparently while attempting to escape.
The private fortunes of many Liberian merchant traders had been wiped out by the decline in trade. The larger commercial enterprises were mostly German owned, and the carrying trade was in the hands of British shipping firms whose steam packets provided Liberia its only reliable access to the outside world in the late nineteenth century. Many ambitious Liberians turned from business to politics to make new fortunes.
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