Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume V

817.6176/22: Telegram

The Ambassador in Nicaragua (Stewart) to the Secretary of State

Managua, July 30, 1943—7 p.m.
[Received July 31—11:19 a.m.]

440. The Embassy has been informed that there has appeared on the Coco River⁹ near San Carlos a Señor Enrique López who is planning to establish rubber collection camps and commissaries on the north bank. He represents the Honduran contractor for Rubber Development.¹⁰ As the Department is aware from the Embassy’s despatch No. 327 of September 29, 1942,¹¹ this is in violation of the informal arrangement with Chicle Development.¹² The Embassy has already prepared a despatch on the subject and arranged for Rubber Development to order López out of this disputed region immediately.

Formal report of the presence of López accompanied by a Honduran Colonel Cabrera and four other men has reached President Somoza who had the Foreign Minister¹³ call on me this afternoon. Dr. Argüello declared that Nicaragua had no objection to the collection of rubber in this region for the United States but that he felt that the presence of a group operating under Honduran auspices and authority reopened the question of title to this region which has been administered in fact by Nicaragua for many years. He stated that he was telephoning his Ambassador in Washington¹⁴ to communicate with the Department and would instruct his Minister in Honduras¹⁵ to investigate the situation quietly without making any protest. Dr. Argüello emphasized that Nicaragua was most anxious to avoid reopening the border dispute and would cooperate fully to prevent such a development.

The situation clearly has serious possibilities and I had contemplated telegraphing Corson¹⁶ of Rubber Development who is now in Guatemala requesting him to take every practicable step to see that López is ordered out of this region immediately thus removing the source of irritation until the basic issue can be settled (however, if the Honduran colonel represents the Honduran Government the solution may not be so easy). I then realized however that it would take Corson days if not a week to communicate with López through Tegucigalpa. I discussed this situation with Apodaca¹⁷ with the idea of having him as the official representative of Rubber Development telegraph López urgently that his operations were interfering with those of Wrigley¹⁸ south of Coco River and were in violation of instructions given Chicle Development and consequently until his instructions from Tegucigalpa could be clarified he should immediately return to his base of operation. Apodaca pointed out that such a telegram could only be delivered through the communications system maintained by Wrigley and that López might simply laugh at such a message claiming it was only a rival’s trick to remove his competition. In consequence, arrangements are now being made to send Waterhouse¹⁹ or Reynolds²⁰ of Rubber Development to San Carlos by special plane tomorrow carrying a formal letter from Apodaca instructing López for the above reasons to return to base. In this way, the orders are based on interference with Wrigley’s operations wholly within undisputed Nicaraguan territory and should neither embarrass nor involve any of the governments concerned. It is hoped that this action to remove immediately a source of irritation of great potential seriousness will meet with the Department’s approval.

Repeated to Tegucigalpa.

Stewart

9. The Coco River, sometimes referred to as the Segovia or Wanks River, formed a considerable stretch of the Honduran-Nicaraguan boundary.
10. The Chicle Development Corporation was the rubber procurement contractor in Honduras for the Rubber Development Corporation which was established in February 1943 to take over the United States Government’s program for the development and procurement of rubber.
11. Not printed.
12. By this arrangement, Chicle Development Corporation was to limit its operations in Honduras to the Patuca River and was to do no buying along the Coco.
13. Mariano Argüello Vargas.
14. Guillermo Sevilla–Sacasa.
15. Fernando Gonzáles S.
16. Harland J. Corson, Chief of the Mexico and Central America Section, Rubber Development Corporation.
17. Joseph L. Apodaca, representative in Nicaragua of the Rubber Development Corporation.
18. William Wrigley, Jr., Company, rubber contractors in Nicaragua for Rubber Development Corporation.
19. Russell V. Waterhouse, local representative in Nicaragua.
20. T. E. Reynolds, field technician.