818.6363/13: Telegram

The Minister in Costa Rica ( Hale ) to the Secretary of State

My December 6, 4 p.m., Department’s December 16, 4 p.m.37 Difficult to secure reliable information. Apparently German name of Greulich and German education of Valentine excited suspicion and hostility. I asked Valentine if he had any foreign alliances. He gave me written statement that he had not but that his enterprise was strictly American. British Minister today said to person in my confidence that he had thought enterprise was German but now he thought it American and therefore had no further interest.

Department’s December 22, 11 a.m. Confidential. Apparently concession will not be submitted to this Congress but to the new Congress in May. Monopolistic features of contract now limited to five years and seems necessary for the safe-guarding of bonds. I think concession is advantageous to Costa Rica; but Costa Rican President said in inspired article in Government organ that such great wealth should be reserved to Costa Rica.

Valentine has submitted 27 pages on the situation from his point of view, which I will forward by mail. Meanwhile, because of discovery of his cipher code by the Government, he asks me to send a synopsis which he requests may be repeated to Attorney Noble. Also requests Acosta be conferred with. I convey these requests contingent on results of Department’s investigation.

The following is Valentine’s synopsis:

“President declared himself publicly against Greulich contract and against excluding European capital from exploitation of vital [Page 869] resources. Says he will defeat Greulich contract by presenting it to Government controlled May Congress. Present Congress uncontrolled. Sudden change of President’s attitude coincides with presence of British Minister and Costa Rican Minister to England, now here, who have shown direct interest and apparently collaborate with [garbled group] Minister of War, Minister at Washington, and local police authorities to defeat Greulich contract and promote apparently American but British backed counter proposition. Minister of Finance and Minister of Fomento still approve Greulich contract which they and the public consider eminently fair, and wish Congress immediately convened as promised. They disapprove President’s change of policy toward American interests but being powerless suggest confidentially that Government of the United States express strong interest.”

  1. Neither printed.