611.1831/66

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

No. 840

Sir:

. . . . . . . . . . . . . .

Accompanied by Mr. Drew, I visited President Jiménez last Monday afternoon. Before going to the Casa Presidencial, we went by [Page 458]the Foreign Office to explain to Mr. Gurdián the purpose of our visit, and Mr. Gurdián gave us his blessings, saying that he is in favor—and has been—of terminating the negotiations at the earliest possible moment, and that the delay has not been his fault.

I told the President that we in the Legation had been attempting, without success, to have Messrs. Gurdián and Brenes sit down around the table with us to discuss actual terms of the proposed agreement, but that Mr. Brenes was delaying matters. I also expressed to the President my distress at the impression which apparently prevailed in certain quarters in Costa Rica that the United States desired to negotiate an agreement which would be unfair to Costa Rica. I reminded the President of his own words spoken to me when I presented my credentials in October of 1933 and in newspaper interviews since, to the effect that the United States “has always been a good friend of Costa Rica” and has always treated this country as an equal. I told him that the United States intended to continue this policy, and that in the proposed treaty negotiations the United States viewed with sympathy all of Costa Rica’s economic problems and had no intention of seeking tariff concessions which would disorganize Costa Rican economics. At the same time I expressed to the President my distress at publications in the Administration organ La Tribuna and rumors around San José to the effect that the administration intended to delay action on the trade agreement until after the election campaign.

First, Mr. Jiménez denied that his Government was responsible for publications that the agreement would be indefinitely delayed.…

The President next told me that he had never entertained thoughts other than that the United States, in the treaty negotiations, would, as in the past, treat Costa Rica with the utmost consideration, and that our Government would prove in these negotiations its devotion to President Roosevelt’s “good neighbor” policy.

The President next referred to the difficulty of his Government making any concessions in the duty on flour, pointing out that the revenues from the imports of flour are essential to the operation of the Government. He said that if our request on this item is dropped, the agreement could be negotiated, and he indicated that most of the other reductions sought by the United States would be granted.

I thereupon told the President that if the State Department should be willing to withdraw its request for a reduction of the duty on flour, the Department would request that the present tariff be bound. This President Jiménez consented to immediately.

In previous despatches, and particularly in No. 807 of August 15, 1935, this Legation has referred to the situation here with reference to [Page 459]flour and I have quoted officials here as expressing the opinion that reduction in the duty on flour will not stimulate the sale of flour to this country. At this point, may I request a re-reading by the Department of my Despatch No. 807 of August 15, 1935, and particularly pages 2, 3 and 4, which discuss the flour situation, and may I recommend that I be authorized by telegraph to withdraw the request for a reduction in the tariff on flour.

Unless we make this concession, I feel that Costa Rica will not be inclined to grant us other concessions, and I am confident that the Congress will not ratify any trade agreement that provides for a reduction in the duties on flour. On the other hand, I feel that if the United States Government, which already is selling more than 95 per cent of the flour consumed in Costa Rica and in so far as the Legation and the Consulate are able to determine will continue to do so, grants this concession, the Costa Rican Government will in turn be able to point to the benefits obtained from us and will be able to energetically advocate ratification of the agreement.

I feel that public opinion here will strongly oppose a reduction in the duty on flour, but will approve an agreement which seems to deal fairly with Costa Rica.

In this connection, may I call attention to an editorial appearing in the new intelligentsia magazine Liberation, translation of which is attached herewith,5 wherein the author questions the motives of the United States in negotiating the proposed agreement. This editorial is indicative of the prevailing opinion that the agreement must contain mutual advantages for both parties, and although I am aware that this is the motivating policy of the United States, it will be difficult to convince the Costa Rican public that a reduction in the duty on flour will be of any advantage to Costa Rica.

Aside from the political aspect of the situation, it is a fact that the ad valorem duty on flour in Costa Rica is lower, as the Department is aware, than in many other countries, and with the collapse in the dollar value of the colón, this duty has been automatically reduced approximately 50 percent during the last two years.

At the termination of the conference with President Jiménez, he assured me that he would instruct Finance Minister Brenes to present his list of answers immediately and to resume his conversations with the Legation without delay. Leaving the Casa Presidencial, Mr. Drew and I met Mr. Brenes coming in, and I am confident that President Jiménez told his Finance Minister of the object of our visit. The next morning, La Tribuna, in a front page story, said that negotiations would be resumed “later this week”.

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This is Friday, and Mr. Brenes has made no attempt to get in touch with the Legation, but I was assured on yesterday afternoon by Mr. Gurdián that the negotiations would be resumed next week. I hope so.

Respectfully yours,

Leo R. Sack
  1. Not printed.