818.014C/99
The Minister in Costa Rica ( Hornibrook ) to the Secretary of State
[Received February 24.]
Sir: I have the honor to refer to my despatch No. 107 of December 22, 19373 and to the Department’s instruction No. 34 of January 4, 1938, in reply, and to report as follows:
Mr. George Curtis Peck, former Commercial Attaché to the Legations of the United States of America in Central America, and later Economist for the Inter-American Highway, called at the Legation on [Page 470] February 15, 1938, to advise me of the alleged plan on the part of German interests, with the aid of the Japanese, to acquire Cocos Island. I thereupon requested Mr. Peck to prepare a memorandum with respect to his conversations with Mr. Carlos Madrigal, a copy of which I enclose for the Department’s information.5
The fact that Mr. Madrigal in his statement to Mr. Peck indicated that there would be strong opposition among the new Costa Rica deputies to any proposals from the United States for the purchase of the Island, casts some doubt in my own mind as to the accuracy of some of the other assertions made by him. In this connection it is worthy of comment that while serving as Minister of Finance, Mr. Gurdián, who is now alleged to be interested in the present project, suggested such a sale to Mr. Peck and indicated the cancellation of the debt owed by Costa Rica to American bondholders as a possible basis for arriving at a price. I am further unable to believe that Mr. Gurdián, in view of his past political experience, could visualize the American Government permitting, without a vigorous protest, the sale of the Island to any company dominated by either Japanese or German interests. While the enclosed memorandum may contain considerable fiction, it may also state some facts which may be worthy of consideration by our military and naval officers entrusted with the defense of the Canal Zone.
In view of the Department’s instruction No. 34 I regard it an imprudent for me to assign to any member of the Legation staff the task of checking on the truth or falsity of the statements made by Mr. Madrigal for the reason that even a casual inquiry emanating from the Legation would in all probability revive rumors to the effect that the American Government may be interested in the purchase of the Island. However, any new information obtained on this subject will be promptly reported.
In addition to the statements contained in the enclosed memorandum, Mr. Peck advised me that some time ago he was informed by a friend of his in Washington that Senator Sheppard of Texas has in mind the introduction of a bill in Congress providing for the purchase of Cocos Island by the American Government. His informant also stated that Senator Sheppard had been in communication with Secretary Swanson6 on this subject.
Respectfully yours,