Liberia's new government said yesterday it will maintain the existing structure of its booming maritime registration business, which is administered by a Washington-based company.
The local firm, International Bank of Washington, was advised of this decision in a telegram yesterday morning from Maj. Perry G. Zulu, minister of finance in the new government of non-commissioned army officers who took over after President William Tolbert was assassinated last Saturday.
"The government of Libria wishes to assure all shipowners, bankers, investors, financial and shipping institutions that the present government fully supports existing Liberian maritime and corporate programs," said the telegram, a copy of which was provided by IB Chairman George Olmsted.
Liberia's maritime program, under which open ship registry has made the African nation's fleet larger than all other nations combined, is important both to that country's economy and to International Bank, a diversified financial services and merchant banking company in D.C.
To Liberia, revenues from the maritime program provide 10 percent or more of the country's budget each year, or more than $10 million annually, Olmsted said in an interview. The maritime operation, along with iron ore and rubber production, are the three primary sources of economic activity in Liberia.
For International Bank, the operations based in Liberia represent one of its key overseas business bases. IB owns 80.4 percent of the International Trust Co. of Liberia, which operates the program or registering vessels under Liberia's flag.
IB carries its investment in the Liberian business at $8.7 million, as of Dec. 31. During 1979, International Trust of Liberia had profits of $2.56 million, of which IB's equity share was $1.24 million and cash dividends received were $1.28 million.
Olmsted, who expressed relief at the telegram from Liberia, said: "I couldn't believe that they (the new government) would kill the goose that layed this golden egg."
The unusual Liberian business operation was started in 1948 by the late Edward R. Stettinius Jr., after he retired as Secretary of State. He convinced Liberian leaders that establishment of an open shipping and corporation registry program could only bring business to that nation while not taking away capital or labor, Olmsted stated.
IB acquired 80 percent of the Liberian business in 1954, after the death of Stettinius. In addition to the normal business of an international financial institution, the Trust Co. of Liberia administers the maritime program; acts as agent for corporations domiciled in Liberia, to take advantage of favorable tax laws; is correspondent in Liberia for leading U.S., British and Swiss banks as well as engaged in commercial banking since 1960; is the leading fire and casualty insurance firm in Liberia; and, with the International Finance Corp., in Washington, assisted in forming an Economic Development Bank for Liberia.
Since 1956, when ships with 6.59 million gross tons were registered under the Liberian flag, that country's aggressive maritime promotion has boosted the fleet to 79.5 million gross tons as of the end of 1979.
In the wake of last weekend's coup d'etat, there was nervousness in the shipping business and talk that many ships might be shifted to registry in Panama, formerly a dominant nation for owners wanting to fly so-called flags of convenience.
Much of the Liberian government's maritime administration work is handled through an office in Reston. Some 35 percent of vessels flying the Liberian flag are owned by American firms.
Other major U.S. businesses in Liberia include Firestone Tire & Rubber Co., Uniroyal and the Bethlehem Steel Corp. Total direct U.S. investments in Liberia are about $400 million.