File No. 818.00/202
President Gonzáles to President Wilson
Excellency: Your Excellency will probably remember that, at the interview you deigned to grant me in February last, I had the honor to say to you that without the recognition of the American Government Señor Tinoco would be utterly unable to hold the power he had seized, because, such recognition failing, he could not procure in this country the money which any Government in Costa Rica must have to meet its obligations until its revenue system is duly adjusted.
My predictions, Mr. President, have been fully verified by the event; although he laid hands on all the money that could be borrowed in the country, Señor Tinoco, in the fifth month of his administration is without a cent with which to pay his expenses and, according to an explicit statement made by him at a meeting of leading citizens called by him about the middle of last month at the Executive Mansion, sees no way out but a resort to issuing fiat money.
The mere announcement of this threat was enough to bring down the rate of exchange nearly one hundred points at one stroke and Señor Tinoco realizing that the remedy he had thought of could not bear the results that were sought, as on every new outpour of paper money the rate of exchange would automatically fall proportionately to the notes issued, with the result that the number, not the purchasing power of those notes, would be increased, has resorted to an expedient that is nothing short of genuine spoliation.
[Page 341]The said expedient consists in taking possession of the whole stock for export and not allowing any merchandise of Costa Rica to leave unless the owner deliver in advance to the Government, at a fixed rate of exchange, gold drafts in the full net amount of the intended export. (Late reports that have reached me bring that amount down to seventy per cent.)
As Your Excellency will see this measure amounts to spoliation pure and simple since it compels the owner to receive worthless notes in exchange for the gold which his goods represent, which notes cannot be later again turned into gold, as, although the law says that the drafts so acquired by the Government are to be sold at an advance of ten points, it also says that they can only be bought by persons to whom an Exchange High Commission specially appointed to that effect by the Government sees fit to sell them.
Such an unheard of provision, for which I do not think there is any precedent in the history of forcible governments, could very well be met if Your Excellency’s Government would deign to order a measure that would nullify it. The measure would consist in excluding from the United States all products from Costa Rica as long as Señor Tinoco clings to the power. If so ordered, the result would be that the property would remain in the possession of the Costa Ricans instead of being appropriated by their ruler, and further, that the said ruler, thus driven to his last resources, would be compelled to do what he should have done from the first: relinquish the power which he is so unduly exercising.
Before deciding to offer to Your Excellency the foregoing suggestion, I talked the matter over with the Costa Rican exporter of coffee now in New York, Don Ricardo Montealegre, a man of wealth, an independent, a gentleman who has absolutely nothing to do with politics; Don Eduardo Bonilla, a wealthy gentleman who has been residing three years in the city in the very business of selling the coffee grown in his lands in Costa Rica; and Don Amado Sanchez, son and attorney of Don Julio of the same name, one of the richest men of my country and all are as enthusiastic as I, also a coffee exporter, over the idea which, they believe, holds out the true salvation.
I may conscientiously say that it will be received in the same way by all my fellow citizens, with the exception of course, of Señor Tinoco and his followers.
I think I have thus shown the measure to be moral, expedient and acceptable; will Your Excellency now deign to give your kind attention to the manner in which it might be conveniently brought into practice. Señor Tinoco himself showed us how to do it when he suppressed, just now, the Consulate General of Costa Rica at New York. The Consul, Señor Montero, being a friend of mine, Señor Tinoco closed the Consulate, the consequence being that the vessels which sail from New York,—and they are, in the main, those which carry the most freight to Costa Rica—will have to enter Port Limón without the papers and documents which every nation demands of a vessel that enters its ports. Little does Señor Tinoco care whether they have those papers or not, but on the other hand, if he were given reciprocal treatment by a temporary closing of the American Consulate in Costa Rica, no vessel could again stop on those shores where she would no longer find the officers empowered by law to deliver to her the papers required for her admission into American ports.
[Page 342]To your wise and just policy of nonrecognition, Mr. President, Costa Rica is indebted for the great invaluable boon that Señor Tinoco could not turn over to speculators the inheritance of future generations. Will your excellency deign to perfect your beneficent action by also incapacitating him from disposing of the assets of the present generation?
With assurances [etc.]