The Chargé in Costa Rica (Johnson) to the Secretary of State

No. 332

Sir: Complying with instructions contained in your telegram of August 29, 4 P.M., to make a full report on the present situation with regard to the Amory oil concession, I have the honor to report as follows.

Could the views of the Department on the Amory concession contained in your telegram of July 1, 2 P.M., but have been received as late even as July [June] 25th, the day on which the concession was approved and the day prior to its publication, I feel certain I could have prevented the contract being put into force as law. …

I have taken occasion since that time to inform Joaquin Tinoco that the Department is very much dissatisfied with the concession, [Page 875] to which he made the obvious answer, with a shrug of the shoulders, that it was too late, the concession already having become a law.

I have also let it become known generally that we are much dissatisfied with the concession and with the hasty manner in which it was passed and published.

. . . . . . .

I presume the Department was in the same difficulty I was in to determine, in time, conclusively, that the people back of the concession were not American. If Valentine were a person to inspire greater confidence, I would upon being shown the Restrepo letter on the 24th, have ventured on my own responsibility, without any instructions whatsoever, to have then and there requested a delay until I could hear from the Department. But of course it seemed equally safe to wait until the last moment, until the last stage had been passed in Congress, before making this request, and particularly advisable to do so in the absence of any instructions whatsoever from the Department, indicating, even in the slightest degree, that British oil interests, would, under war conditions, be opposed here, although I am very glad to learn the Department’s position is what it is.

Since the arrival of Mr. Elders, of the Sinclair interests, there is little danger of the attempt being made, undoubtedly contemplated a short while ago, to cancel the Sinclair concession and turn it over to the favorite of the Tinocos, the Amory crowd. The Sinclair concession itself is now fairly safe from successful attack especially since receiving an answer to my telegraphic inquiry (telegram of August 8, 9 A.M.) as to whether it should receive the Legation’s support.

. . . . . . .

Negotiations with the Tinocos looking to the cancellation of the concession, or its repeal, would lead to nothing—would be merely an encouragement to their continuance in power, as they would feel they had something to bargain with.

Everything practical[ly] is at a standstill until the Tinocos are put out. For example nothing can be done at this end to correct the granting of this concession, no settlement can be made of the dangerous German situation and nothing can be done by the United States to help the country out of its present state of political, financial and economic anarchy and ruin.

I have [etc.]

Stewart Johnson