818.6363/61
The Acting Secretary of State to the Chargé in Costa Rica (Martin)
Sir: The Department acknowledges the receipt of your telegram No. 5 of October 30, 5 p.m.19 and your despatch No. 13 of November 10, 1920, relative to the demand of the Costa Rican Government that the Costa Rican Oil Corporation, an American company, make a full report before the twelfth of November, regarding its obligations, operations, production and the ownership of its stock, and transmitting a copy and translation of the demand as well as a copy of the reply of the Costa Rican Oil Corporation.
In reply, the Department informs you that it is awaiting the receipt of further memoranda both from the Costa Rican Oil Corporation and the United Fruit Company concerning the appropriate interpretation of the Costa Rican laws relative to the ownership of subsoil deposits, particularly of petroleum, and pending the receipt of such memoranda, has arrived at no final conclusion regarding the matter as affecting the controversy between the Costa Rican Oil Company on the one side and the United Fruit Company and the Standard Oil Company on the other side, concerning the rights of the first-named Company under the terms of the so-called Pinto-Greulich concession.
[Page 846]With respect to the statement made by you in the next to the last paragraph on page 3 of your despatch20 regarding the possibility of the support of this Government being given to claims for indemnity on the part of the Costa Rican Oil Company in the event that its concession shall be invalidated or rendered less valuable through the action of the Costa Rican Government, you are informed that if the Government of Costa Rica should take action against the concession, of an apparently unwarranted nature, the Government of the United States would be disposed to give careful consideration to any claims for indemnity which the Costa Rican Oil Corporation might file as a result of such governmental action by Costa Rica.
This Government understands that upon the occurrence of an alleged invasion of the property rights of one of the American companies by the other, the correct procedure would be to have the matter adjudicated by the parties in the Costa Rican courts.
I am [etc.]