818.6363/61
The Chargé in Costa Rica ( Martin ) to the Secretary of State
[Received November 22.]
Sir: Adverting to my telegram No. 5 of October 30; 5 p.m.,15 relative to the demand of the Government of Costa Rica that the Costa Rica Oil Corporation, an American company, make a full report before the 12th, instant, regarding its obligations, operations, production and the ownership of its stock, I have the honor to transmit herewith the text and translation of the communication embodying the demand, which was published in La Gaceta of October 30, 1920.15
In his reply to the Costa Rican Government, copy enclosed,15 which was delivered today, Mr. Herbert G. Wilson, Manager of the Costa Rica Oil Corporation, states that the Company has complied with all the terms of the contract, that it has not been found necessary to take advantage of the extension of time requested after the entrance of the United States into the World War, and that since the acquisition by the Company of the Pinto-Greulich concession in New York on January 29, 1917, there have been no negotiations whatever with respect to the transfer of the contract to the Sinclair Central American Oil Corporation, which is simply a “holding company”.
The aggressive attitude of the Costa Rica Government in threatening to annul the concession in case of non-fulfilment of the terms of the contract, without the extension of time which was declared void, is accentuated by the action of Mr. Alejandro Alvarado16 in addressing a letter, in his capacity as Minister of Justice, to the [Page 844] Attorney General, requesting an investigation of the charge of bribery brought against the Pinto-Greulich concessionnaires by Congress last year. The letter was published in the issue of “La Gaceta” of October 31, 1920.
The Attorney General is required:
- 1.
- To request of ex-President Gonzalez Flores the necessary excerpts from his private papers which were used as evidence by the members of Congress, and
- 2.
- To file with the courts a charge of bribery, if the case so merits.
As I had the honor to point out in my telegram cited above this action on the part of the Government may possibly be regarded as a manoeuvre calculated to placate Congress. On the other hand, as suggested in my telegram No. 7 of November 2; 6 p.m.,17 there is ample ground for the belief that an effort is being made to provoke a discussion of the question of subsoil rights in the forthcoming special session of Congress. It is conceivable that such a debate if precipitated now would jeopardize the Costa Rica Oil Corporation’s concession. Yesterday the Minister for Foreign Affairs, of his own motion, told me that the Government did not desire to raise the question of subsoil rights until the next regular session.
If Mr. Alvarado’s statement reflects the true sentiments of the Government, it can only be assumed that the present agitation against the Costa Rica Oil Corporation is inspired by rival interests.
The Standard Oil Company of California, in conjunction with the United Fruit Company has succeeded in inducing 45 municipalities out of a total of 55 to petition the Government to present the subsoil bill (private ownership of subsoil deposits) to Congress at once. Three more municipalities are reported to have promised to sign the petition.
To counter the danger which the proposed measure might involve if it were submitted to Congress during the investigation of the Pinto-Greulich concession, the lawyers of the Costa Rica Oil Corporation have been spreading the report that in case the Congress declares for government ownership the United States will sustain claims for damages. This impression, obviously erroneous, was doubtless derived from the first part of the Department’s cable No. 21 of August 17; 6 p.m.
The representative of the Standard Oil Company of California, in turn, has intimated to me that ex-President González Viquez, who is supposed to have drafted the Foreign Office Note of October 5, 1920, which was transmitted with Consul Chase’s despatch No. 868 of October 8th, last,18 is retained both by the Costa Rica Oil Corporation [Page 845] and the Amory Company which have a community of interests and that his real motive in opposing the subsoil question is to resuscitate the Amory concession.
When questioned by me as to the verity of the foregoing assertions Mr. Wilson stated that his Company had no interests in common with the Amory Company, and that the latter was much more likely to seek a new concession than to attempt to revive the contract annulled by the Costa Rican Congress.
The situation as described herein is further complicated by the endeavor of the Pan-American Oil Company, whose representative, Mr. M. B. Hereley, arrived in San José last week, to obtain a concession to exploit oil lands. I also understand that another company, of whose identity I am ignorant, is also attempting to persuade the President to present its proposal to Congress. Every effort will be made to ascertain what interests are financing the last named venture. In the meantime I should welcome for my guidance and confidential information an expression of the Department’s policy with respect to the subsoil question.
I have [etc.]