810.154/3099a: Airgram
The Secretary of State to the Ambassador in Costa Rica (Des Portes)
A–692. Department’s 607 of September 21, 8 p.m.24 In accordance with agreements reached at conferences with officials of the War Department and the Public Roads Administration, the Army Engineers will stop construction work on the northern Costa Rica section of the pioneer highway on October 31 and the contractor25 will stop work on the southern Costa Rica section on September 30. It will of course be some weeks before demobilization is completed. Because of this factor employment will be reduced gradually. As you know, a considerable number of employees have been discharged recently in any case due to the fact that the rainy season prevents construction work.
The Public Roads Administration believes that it can do considerable work during the coming year on the north section and a small amount on the south section in addition to working as planned on the Cartago-San Isidro section, but the PRA’s plans are somewhat dependent upon its ability to secure and finance a transfer to it of Army equipment now in Costa Rica. The Army is legally unable to turn this over without payment to Costa Rica or to the Public Roads Administration.
For your background and possible use in conversations with Costa Rican officials, the following considerations have led the Department to agree to the above proposals: (1) About $10,000,000 or nearly twice the amount originally estimated has already been spent in Costa Rica. (2) Employment has already been furnished in greater volume and over a longer period than originally contemplated. (3) The disruptive effect of withdrawal now will probably be no greater than would have been the effect on completion last May or next June. Thus the only unanticipated prejudicial effect on Costa Rica has been the failure to complete the road at an early date. The new plans will permit the PRA to continue the Inter-American highway project at a more economical pace. They will make far less inflationary impact on Costa Rican economy than the large expenditures earlier contemplated for the forthcoming construction year and will tend to sustain that economy over a longer period. Moreover, Costa Rica has been provided even as it is with new useful roads from Bebedero via Las Cañas to Bagaces and from San José to Puntarenas with the exception of an eight mile gap the early construction of which is now being planned by the PRA, and with two access roads [Page 86] and a short railroad in south Costa Rica. Although Costa Rica under present plans will be the only Central American country except Panama without some kind of a through highway completed, it must be mentioned that it is also the only country which has received a special appropriation (of $12,000,000)26 for its section of the Inter-American Highway without the necessity of providing cooperation under the provisions of the Inter-American Highway Act.