File No. 817.812/106b.

The Secretary of State to Minister Hale.


Have recently had a very pleasant exchange of views with the Costa Rican Minister in regard to the purchase of a canal option. It seems that the friction noticeable in Costa Rica was due to a misunderstanding. When we assured Costa Rica of our willingness to make a treaty with Costa Rica similar to that with Nicaragua we had in view only the purchase of an option but it seems that Costa Rica understood that such a treaty would include the Platt Amendment. Now that they find that we had no thought of including the Platt Amendment, and no desire to do so, all misunderstandings seem to have been removed and I am conferring with the Minister here in regard to the price to be paid and the terms. They have also suggested that they might be willing to sell Cocos Island which lies some two hundred miles west from Costa Rica in the Pacific. Costa Rica finds it impossible to protect the island or to make use of it and is willing to sell. We are willing to buy the island at a reasonable price and can include it in the treaty conveying the canal option. In purchasing the canal option we cannot pay Costa Rica more than we are paying Nicaragua. The three millions which we have agreed to pay Nicaragua covers the naval base in Fonseca Bay as well as the canal route and a much larger part of the canal route is in Nicaragua than in Costa Rica. The indications here are that all misunderstandings have been removed. Do you get the same impression there?