File No. 818.00/170
Chargé Johnson to the Secretary of State
San José, June 19, 1917, 10 a.m.
At the conference of Tinoco with ex-Presidents Wednesday 13th referred to in my telegram of June 15, noon, it now appears full text of written communication handed to Tinoco on the 11th was read. Iglesias was only one of those present who did not fall in with the ideas of Tinoco. He suggested that matter was one Tinoco ought to decide for himself. On the 16th Congressmen were summoned by him to confer and yesterday prominent merchants, bankers and agriculturalists. At two latter meetings subjects discussed exclusively financial and economic, preparing the way for further issues paper money, direct taxes and gold export duties. Tinoco plainly intimated that he would not adopt unpopular measure of reducing Government expenditures. Publicity given last conference which was summarized in Government organ as indicating enthusiastic cooperation these interests in support of Government without foreign financial assistance. Conference to be held again 22d.
Meanwhile disappearance of silver currency has become real menace as it interferes with retail trade and marketing country people beginning to refuse paper currency. Hardships now severely felt by these and laborers naturally blamed wholly on powers that be. Indirect purchase recently by Tinoco of nearly 100,000 dollars foreign exchange and caused rumors of possible immediate retirement. There is no doubt that he fears invasion by Quesada from Nicaragua which has not officially recognized him.