810.154/3167a
The Secretary of State to the Commissioner of the Public Roads Administration (MacDonald)
My Dear Mr. MacDonald: The Department has been giving the most careful consideration to the effects which the cessation of work on the pioneer highway project will have on the Inter-American Highway project. At the conferences which have been held between representatives of this Department, the Public Roads Administration and the War Department, specific plans for the liquidation of the pioneer highway in an orderly manner were discussed. Every effort was made to arrange for the transfer of the maximum possible benefits from the pioneer highway project to the permanent Inter-American Highway project, and for the continuation of the latter at a pace which would mitigate the disruptive effects of the stoppage of work on the former on Central American economy.
Having carefully considered the points brought out in these conferences and subsequent developments, the Department believes that the program for the construction of the Inter-American Highway should now proceed on the following basis:
(1) In as much as the Guatemalan Government has indicated that it does not wish to sign a Project Statement until it has completed work under its recently revised contract with the Army,40 it would appear inappropriate to undertake further negotiations with that Government at the present time.
(2) In El Salvador, work should proceed in accordance with the existing Project Statement with that country, and the revision thereof recently proposed by your Administration if it is accepted by the Salvadoran Government.
(3) In Honduras, it is essential, in order to prevent economic dislocations, for the Public Roads Administration to arrange at once to [Page 92] carry on a considerable volume of work under the existing Project Statement. The Department believes that Honduran economy would be adequately bolstered if a monthly rate of local expenditure of $200,000–$250,000 were maintained during the forthcoming dry season. The Public Roads Administration will doubtless wish to build up its organization in Honduras with this end in view. The Department also understands that the Public Roads Administration will discuss with the War Department and the pioneer highway contractors the matter of securing from them such machinery as can be purchased economically and is needed on the Honduran section of the Inter-American Highway.
(4) The Department understands that the existing Nicaraguan highway construction organization, headed by Mr. Thomas A. Jones, is to be shifted to the north Nicaragua section of the Inter-American Highway as soon as it has finished work on the south Nicaragua section. For your confidential information, the Department does not favor construction on the Jinotega-Condega section of the highway until the rest of the highway in Nicaragua has been completed, but feels that work may proceed on the other north Nicaragua sections as technical and practical considerations may indicate.
(5) The Department believes that the Public Roads Administration should make urgent efforts to undertake construction in the forthcoming dry season on the north section of the Inter-American Highway in Costa Rica and in this connection to take over an appropriate part of the existing Army Engineers’ organization on this section of the highway. It believes that Costa Rican economy will be adequately bolstered if a monthly rate of local expenditure of $200,000–$250,000 is maintained during the forthcoming dry season.
The War Department has now issued orders, so this Department is informed, for the Army Engineers in Costa Rica to turn over to the Public Roads Administration such Army owned machinery now in use on the north Costa Rica section of the highway as the Army does not require elsewhere and the Public Roads Administration needs to undertake construction. This machinery is to be transferred without charge and for an indefinite period on loan evidenced by a memorandum receipt. In order to implement the War Department’s decision, this Department would be grateful if representatives of the Public Roads Administration should urgently discuss with the appropriate officials of the Army Engineers in San José the question of what machinery is actually to be transferred if the rate of construction activities mentioned above is to be maintained.
In addition, Army orders call for demobilization of the Army construction organization on this section of the highway beginning November 1. It is essential that the Public Roads Administration make every effort to effect by that date the transfer of that part of the existing Engineers’ organization that the Public Roads Administration can use in continuing the construction on this section of the highway. The Department wishes to emphasize the importance of avoiding not only the complete demobilization of the pioneer highway organization, with its disruptive economic effects, out also the uneconomical remobilization of men and machinery under Public Roads Administration auspices at a later date. The Costa Rican Government has understandably expressed its serious concern at this prospect.
[Page 93]Funds for the construction of this section of the highway can be secured from the balance of cooperative funds still available under the original Project Statement, from any savings which may develop from drainage projects, and from any new cooperative funds which the two Governments may be in a position to furnish.
(6) The Department understands that the Public Roads Administration now intends to continue construction on the Cartago-San Isidro section of the Inter-American Highway, with emphasis on efficiency and economy rather than speed, and that it believes that it will be able to construct this section well within existing appropriations.
(7) The Department does not consider it necessary to undertake a considerable construction program in south Costa Rica in the immediate future, although it agrees with the view of the Public Roads Administration that enough work should be done to permit bridge construction for some miles south of San Isidro as originally planned.
(8) The Department has arranged with the Panamanian Government for the initiation of negotiations looking to the conclusion of a Project Statement under the basic agreement which has been concluded. It is understood that a representative of the Public Roads Administration will shortly undertake these negotiations. The Department wishes to make clear its view that the Panamanian Government should pay any extra costs which may accrue from the construction of any section of the highway in Panama to standards higher than those contemplated in other countries.
(9) The Department believes that the standards of construction contemplated should in general be as close as possible to those which formed the basis for the $30,000,000 estimate embodied in Public Law No. 375 of December 26, 1941. While on certain sections, such as that between Cartago and San Isidro, it may be desirable to build to higher standards than originally contemplated, it is obvious that, in laying plans for future construction, the original Congressional authorization should not be exceeded except in so far as this is unavoidable. The Department also feels that it would be inadvisable to build the highway to higher construction standards than the immediately foreseeable needs of the countries may require, and that the standards should be so chosen as to necessitate a minimum rate of maintenance.
I shall be very grateful if you will inform me whether you are in agreement with the program described above for the continuation of work on the Inter-American Highway in the immediate future.
I shall also greatly appreciate it if you will transmit at your early convenience a revised estimate of the cost of completing the various sections of the highway in Costa Rica to contemplated standards. In view of the obstacles which have been encountered in securing funds for the continuation of construction on the northern section of the highway in Costa Rica, it appears highly desirable that such an estimate should be prepared and urgent consideration given it. It would also be helpful if revised estimates for the cost of constructing the other sections of the highway could be prepared in the near [Page 94] future, to reflect any revisions which the stoppage of work on the pioneer highway may have necessitated.
Sincerely yours,
Assistant Secretary