The_Open_Door_deel1

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Agreement signed by representatives of the Government and L.M.C
on January 20, 1978 approved by the Legislature on May 25 of the
same year. It solved the problems as to ownership of L.M.C.'s
assets and related tax-issues whilst both parties also agreed to
resume negotiations for the exploitation of the iron ore
deposits of the Bea Mountains.
Besides quarrelling over the share of the Treasury in L.M.C.'s
assets the two parties in the 197O's also quarrelled over the
Government's share in the company's retained earnings. The
official Liberian point of view was that the Government was an
equal partner with L.M.C. and should therefore in equity share in
the treatment and distribution of these retained earnings (82).
However, this Liberian claim was much less justifiable than the
desire to recover a portion of the salvage value of certain
assets which had been depreciated more than 100? over the years
- as one of the company's senior employees told the present
author in 1976 (83). Notably after the publication of the
Government's standpoint in this issue L.M.C. adopted a policy of
accelerated distribution of retained earnings to shareholders* and
the retained earnings, which in 1968 still had totalled $ 23.7
million, were down to $ 3.5 million in 1975.
The 1945 concession agreement had entitled the Republic of
Liberia to all roads, railroads, bridges, docks, aquaducts and
hydro-electric works constructed by L.M.C. in case of the
termination of the contract (84). Under the 1978 Agreement the
Liberian Government became the owner of assets of L.M.C. which
would be necessary to the development of the Bea Mountains,
further, salvageable assets which had (social) importance to the
Government and which would not be necessary to the Bea Mountains
development, and also to non-salvageable assets which would not
be needed for the Bea Mountains project, all these assets being
specified in the Agreement. A listed number of salvageable assets
was to be sold; the net proceeds of these sales were to be
divided on a 50 - 50 basis between the Government and L.M.C, the
latter, its shareholders (or their subsequent shareholders) would
be exempt from any taxes on this sales income. It was understood
that the Government's share in the net sales proceeds would
constitute L.M.C.'s tax payment on the sales income. The
remaining, not mentioned assets would remain the property of
L.M.C and any income originating from them, e.g. through sales,
would be subject to the tax laws of general application (85).
Thus, for the first time in Its history, the Republic of Liberia
became the owner of a railroad (estimated value: about $ 6.7
million) including rolling stock and ancillary equipment. Also
the company's dock facilities at the Free Port reverted to the
Government (valued at $ 4.7 million) as well as its power plant
($ 1.2 million), factory-buildings, business offices and
residential housing facilities ($ 2.6 million), hospital ($ 0,7