File No. 818.00/174
Chargé Johnson to the Secretary of State
San José, June 27, 1917, noon.
The most serious menace to early withdrawal of Tinoco is voting by Congress authority to Executive to issue paper money under the pretext of relieving shortage in silver. The silver certificates amounting to 800,000 colones has been made nonredeemable for four years which will now cause them to circulate freely, but silver deposit required reduced to 40% enabling issue of 1,200,000 colones. Despatch follows. Threat of exercising power conferred being used by Tinoco in the hope of bringing about advance approval to radical revenue measures on the part of bankers, agriculturalists and merchants but it is believed that paper money will be issued. Attempt to enact export duties meeting with difficulties, disillusion as to Tinoco becoming complete. He is maintaining himself solely by power of troops and money.