By the early 1920s, Liberia's financial crisis had worsened to the point where President King headed up a commission which traveled to the United States to seek reorganization of its staggering debt burden. They arrived in March 1921, shortly after President Harding had taken office. The United States Congress had suspended all foreign credit and extension of foreign loans, even though the State Department was sympathetic to the request from the Liberian delegation. Negotiations dragged on until October before the State Department finally granted Liberia a loan for $5 million. The U.S. government under President Harding proposed anew to Congress a $5 million loan to Liberia. The House gave its approval but the Senate refused, creating great disappointment and a sense of desperation among Liberian officials, who worried that British and French designs on their country might now prove unstoppable. Liberia had become a charter member of the League of Nations in 1919, and Monrovia was determined to safeguard its sovereignty.
Firestone Rubber Company
began exporting rubber from Liberia in 1934, having obtained a concession to lease land in 1926. The Liberian economy soon came to depend on it. Through subsidiary Finance Corporation of America, Firestone also boosted the Liberian economy with a $5 million loan that permitted the government to consolidate and bond debts and fund public improvements.
King was stiffly challenged in the presidential election of 1927 by Thomas Faulkner. According to an official statement, King received 234,000 votes; however, Liberia had 15,000 registered voters at the time. Thus, King won the dubious achievement of being listed in the Guinness Book of Records for the most fraudulent election reported in history.
After losing the 1927 presidential election to King, Thomas Faulkner accused many members of the True Whig Party government of recruiting and selling contract labor as slaves. Despite Liberia's firm denials and a refusal to cooperate, the League of Nations established a commission under the leadership of British zoologist Cuthbert Christy to determine the extent of forced labor and slavery still practiced by Liberia. U.S. President Herbert Hoover briefly suspended relations to press Monrovia into compliance. In 1930 the League of Nations published the committee's report, dubbed the ‘Christy Report’ after the Committee's chairman. The report supported many of Faulkner's allegations and implicated many government officials, including vice president Allen Yancy. It was found that forced labor was used for the construction of certain public works such as roads in the interior. And certain tribes did practice domestic servitude that could be considered as slavery. The report found:
"In order to suppress the native, prevent him from realizing his powers and limitations and prevent him from asserting himself in any way whatever, for the benefit of the dominant and colonizing race, although originally the same African stock as themselves, a policy of gross intimidation and suppression has for years been systematically fostered and encouraged, and is the key word of the Government native policy;" and
that, "...Vice President Yancy and other high officials of the Liberian Government, as well as county superintendents and district commissioners, have given their sanction for compulsory recruitment of labor for road construction, for shipment abroad and other work, by the aid and assistance of the Liberian Frontier Force; and have condoned the utilization of this force for purposes of physical compulsion on road construction for the intimidation of villagers, for the humiliation and degradation of chiefs, of captured natives to the coast, there guarding them till the time of shipment "
Subsequently, King and Vice-President Yancy, along with other implicated leaders, resigned.
