The_Open_Door_deel1

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revenue of $ 2,748,000.00 as these expenses had been deducted
from taxable profits (44) (eventually part of this amount was
restored). The construction costs of a concentrating mill, a
pier loading tower, a new finger pier, and the improvement of the
railroad, during the years 1960 through 1962, had been financed
in the same way, using $ 1,950,000.00 of the funds.
Subsequently, these assets had in following been depreciated and
taxable profits had been charged with these expenses. Loss of
Government revenue in this case had amounted to $ 682,000.00
(45).
In 1968 L.M.C, in view of the expected closure of the mine in
the early 197O's, made the last deduction for replacement,
expansion, etc.
During the years 1955 through 1968 it had deducted a total of
$ 15,255,000.00 as "reasonable reserves" for replacement,
expansion, development, etc. and had restored $ 1,433,000.00 of
this amount, leaving a balance of $ 13,822,000.00. Net loss for
the Liberian Treasury amounted to $ 3,991,000.00 (46). In 1969
the firm of Main Lafrentz & Co. had been hired by the Government
to investigate the business and accounting practices of L.M.C.
(47). In 1970 it advised the Government that because of doublecounting
practices of L.M.C. the Liberian Treasury could have
recovered approximately $ 2 million of an amount of nearly $ 4
million during the years 1958 to 1968 (48). In 1971 the
Government officially claimed this amount (49).
The matter was solved with the Settlement Agreement dated
August 8, 1972 when L.M.C. agreed to pay $ 2 million (in four
instalments in 1972 and 1973). The company was allowed to
continue to depreciate on three million dollars worth of assets,
bought with funds derived from these reserves for contingencies
etc. and was not compelled to restore to net profits an amount of
some $ 13.3 million (being the reserves for contingencies etc.).
However, in anticipation of the definite closing down of the
company the Government and L.M.C. agreed that the sales proceeds
of L.M.C.'s fixed assets (others than which would revert to the
Government under the 1945 agreement) (50) would be included in
the company's operating profits. (Thus the Liberian Government
shared on a 50 - 50 basis in the sales proceeds of these assets)
(51).
Other disputed issues
In 1957 an agreement had been reached between the Government and
L.M.C. for the exploitation of the Mano River Iron Ore Reserves
by the National Iron Ore Company (52). Management of the N.I.O.C.
had been entrusted to the Mines Management Association of Liberia
(M.M.A.L.). After N.I.O.C. in 1962, had encountered serious
difficulties in the development and operation of its Mano River
mine, both N.I.O.C. and the Government - a 50? owner of the
company - requested the aid of L.M.C. in view of the experience
it had required since the start of its operations in Liberia,