File No. 817.812/119.

Minister Hale to the Secretary of State.

No. 68.]

Sir: I have the honor to enclose a copy and translation of the reply, dated February 19, of the Secretary for Foreign Affairs to my note of February 12. A copy of the latter and of the previous correspondence was transmitted to the Department in my dispatches No. 63 of February 3, and No. 65 of February 12.

[Page 1110]

The note now enclosed was not received in time for translation and transmission by the last mail (February 22). Meanwhile, a study of the situation, as developed so far, caused me to withhold a reply until I could hear from the Department in relation to the new phase of the question presented by the Secretary. It appears that the Costa Rican Government regards the sale of an option in perpetuity of the right to construct a canal as a fundamental objection to the proposition of our Government. It holds the sale of such an option as equivalent to entering into a contract for the non-construction of a canal, and that in territory which nature has designed for the use of the commerce of the world and of which the sovereign State of Costa Rica happens to be possessor. It offers, however, a solution of the difficulty from its standpoint in its suggestion of a “prudential term—fifty years, for instance—for the inauguration of the works, and another, proportional, for their completion.”

I have [etc.]

E. J. Hale.

The Minister for Foreign Affairs to Minister Hale.

Mr. Minister and Dear Friend: With the attention which it deserves I have considered your important letter of the 12th instant.

I note with regret that, owing no doubt to my faulty diction, I was not able to make myself understood by your excellency when in my letter of the 6th I endeavored to explain the attitude of my Government in relation to the Nicaragua canal concession.

And I say that I was not able to succeed in making myself understood because your excellency, in the letter which I am answering today, expresses the idea that the entire question has been reduced to the point of our two Governments coming to an agreement as to the amount of the indemnification which Costa Rica is to receive.

And, unfortunately, this is not the case, Mr. Minister. If the entire difficulty were reduced solely to the question of a greater or a lesser sum, I can assure your excellency that my Government would not at any moment have adopted the attitude of protest which it has assumed; it would have contented itself simply with discussing the transaction from this one point of view, endeavoring, as is natural, that it should turn out the most favorable possible to the interests of the Republic.

But the matter embraces other considerations of much greater importance than the amount of an indemnification. In the first place, it is a question of an infraction of treaties in force, of a neglect of the rights of Costa Rica which has deeply offended national feeling. The form in which the negotiation has been conducted with Nicaragua, dispensing with the concourse of Costa Rica, has been considered by the latter as wounding, as offensive to its dignity. It is a question of form, Mr. Minister; a question which does not in the least affect essentials—of that lam fully convinced—but which, for peoples small and for that reason suspicious, is invested with unusual importance.

Through the statements in regard to the subject which President Wilson and Secretary Bryan have been pleased to make to our Minister in Washington, Mr. Brenes Mesén, and your excellency to myself, in the friendly correspondence which we are carrying on in this connection, I have come to acquire the complete, the perfect conviction that there has not been in the mind of the American Government the slightest disrespectful intention towards my country, in the matter of its concluding, without notice to us, a canal convention with the Nicaraguan Government.

It is very pleasant and agreeable for me to point out, at this timely moment, that the sentiments of good will and exquisite courtesy with which at all times [Page 1111] the great nation has distinguished us, have in no respect diminished because of the negotiation to which I have been referring.

This very just and true impression of mine will, I hope, little by little permeate public opinion, thus causing to disappear one of the motives which to the greatest extent would have attached unpopularity to the possible convention.

The second point, which would have rendered the agreement not only difficult but impossible, relates to the Platt Amendment; but this, as your excellency makes very clear, no longer appears in the new protocol and is therefore dismissed from the discussion.

There remains, then, only the sale pure and simple which the Government of Nicaragua is making to that of the United States of the exclusive ownership of the rights necessary and proper for the construction, operation and maintenance of an interoceanic canal by way of the San Juan River and the Great Lake of Nicaragua, or by any other way within Nicaragua territory, a work which will be begun when the United States may be pleased to set a date. In addition to this sale of rights in perpetuity, Nicaragua gives to the United States an option for a period of ninety-nine years, renewable for a like period, for establishing in divers islands and parts of its territory a naval base and other works in connection with the conservation and maintenance of the canal.

The conditions under which Costa Rica would have to negotiate could not differ greatly from those stipulated with Nicaragua, and I sincerely believe there would not be found any Legislative Chamber in Costa Rica that would approve it nor any Executive Power that would venture to submit it.

The reason is obvious. As I had the honor to set forth to your excellency in my former communication, Costa Rica would celebrate with inexpressible satisfaction a convention for the construction of a canal, but not one expressly for the non-construction thereof, and the one that Nicaragua has concluded with the United States may be considered as in reality of this character.

Costa Rica could not treat on these grounds. It fully understands that this is not the most opportune moment for the United States, which has just crowned the great Panama enterprise, to endeavor to achieve another no less costly.

But it is possible to arrive at a reasonable arrangement. I do not see what fundamental objection there would be to fixing a prudential term—fifty years, for instance—for the inauguration of the works, and another, proportional, for their completion.

Costica Rica, Mr. Minister, however small and reduced in circumstances it may be, figures in the world concert as a sovereign nation and could not, without intensely wronging the legitimate interests of civilization, conclude a convention capable of being converted into an insurmountable barrier against those who tomorrow may attempt to open a new route to the world’s commerce.

I ask you, Mr. Minister, to sever yourself for a moment from your high position as Representative of the American Government and place yourself in the position of an absolutely impartial individual. I am sure that your impartiality would make you appreciate the matter in the same way that a Costa Rican views it.

As your excellency can see, therefore, the question is not limited merely to a greater or lesser sum of money; no; the question is very complex, very difficult to solve in a way which would fully satisfy the desires and aspirations of both sides.

Nevertheless, I do not believe it impossible to solve; far from it. Sufficient to render it not impossible of solution are the real and effective good will which the American Government displays for its solution and the very sincere desire to the same end which animates my own Government.

With the foregoing explanations, it seems to me superfluous to state to your excellency that, taking into consideration the present status of the affair, I am not in a position to reply to the question you are pleased to ask me, as to how much would be the amount that the Government of Costa Rica would ask for its rights. This point of the question I could not treat of without having arrived at an agreement relative to the others.

Nevertheless, and with the object of gaining time, I consider that perhaps it would be opportune for your excellency to make me—still in the informal way thus far followed—a concrete offer on the subject.

It will not escape your excellency’s clear judgment that a liberal offer, in which public opinion might see the way to overcome in great measure the thousand financial difficulties through which we are passing, would perforce tend to mitigate to a notable degree the open hostility which, because of its [Page 1112] form and because of the erroneous interpretations which were at first given to it, the negotiation encountered among Costa Ricans.

Purposely, Mr. Minister, I have not wished to refer before to the intimation which your excellency had been pleased to give me in regard to Cocos Island. The reasons which have so determined me are two; first, that my Government has not as yet had time to consider the matter and, second, that I do not wish to involve the one question in the other; they are perfectly distinct and have not any real connection.

Requesting that your excellency will pardon me for having so greatly trespassed upon your courtesy with the reading of this long letter, I take pleasure in again declaring myself [etc.]

Manuel Castro Quesada.