718.1915/754: Telegram
The Chargé in Panama (Munro) to the Secretary of State
[Received 6 p.m.]
123. Yesterday Foreign Minister informed me that Fabrega had flatly rejected the Costa Rican proposal as was reported in telegram dated December 18 from the American Legation in Costa Rica, but that at the request of President Jiménez had made a counterproposal for a rectification of the boundary which would leave a small section southeast of Cañas Gordas to Panama. Fabrega stated that President Jiménez appeared willing to consider this proposal and took it under advisement. Fabrega asked to be permitted to return to Panama if the proposal were accepted or if the Government of Costa Rica would consent to postpone further negotiations until May when there would be a new Congress in Costa Rica more favorable to the Government. This was granted and today Fabrega returns to Costa Rica. From this fact the Foreign Minister infers that Costa Rica either has accepted Panama’s last proposal or has consented to a delay.
The inclusion in the Costa Rican proposition of a stipulation for the return of the arms and flags appears especially objectionable to Panama since the Panaman Government would prefer to return them as a spontaneous gesture upon the resumption of relations. Panama also objects to the return of the vessels upon which much money has been spent, it is said, for repairs.
I believe that if these two stipulations were to be eliminated the Costa Rican proposal might ultimately be accepted, but not as long as Costa Rica appears willing to receive counterproposals which involve territorial concessions or to agree to a delay in the negotiations.