811.51/6127: Airgram

The Ambassador in Costa Rica (Des Portes)30 to the Secretary of State

A–678. Reference Department’s A–387, March 27.

Following transmission of the Legation’s A–507, March 13, and receipt of the Department’s above airgram, when the matter appeared to have been fully settled, the negotiations broke down through the refusal of the Spanish Minister to permit the funds to be subjected to the control of the Junta de Custodia and through his insistence that the 250 or 300 colones per month originally suggested as permissible withdrawals were insufficient to meet the subsistence needs of the indigent Italian subjects in Costa Rica under his care.

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While this Embassy has maintained the position that the Spanish Minister’s views should not be permitted to affect or restrict the Costa Rican Government’s sovereign right to deal with enemy property within its territory, the Costa Rican Government, many of whose officials maintain cordial and friendly personal relations with the Spanish Minister, has tended to accede to his wishes in the matter for the following main reasons:

The funds in question are deposited in the name of the Spanish Minister only, and not in his name as representative of Italian interests here. Thus, technically, it may be interpreted that the funds are either his own, or the property of the Spanish Government. This circumstance has been used by the Spanish Minister in order to bolster his bargaining position.
The Spanish Minister has indicated that to place “his” funds under the control of the Alien Property Custodian (Junta de Custodia) would stigmatize him as an enemy of Costa Rica and would be interpreted as an unfriendly act toward him and his government.
The Minister of Foreign Affairs is particularly desirous of maintaining cordial relations with the Spanish Government.

Representatives of this Embassy, in frequent discussions on the subject with the Minister of Finance (both former Minister Escalante and present Minister Tinoco31) have pointed to Costa Rica’s commitments at the Washington Conference and to the many reasons which require that prompt and effective action be taken with respect to these funds.

The Spanish Minister, after consultation with the Costa Rican Government, has now proposed the following arrangement:

The dollars will be transferred to the Banco Nacional (which is the State bank) and there converted into colones. The Spanish Minister will then sign an undertaking whereby he commits himself not to draw on these funds in excess of $200 (or its equivalent in colones) per month, for subsistence payments to indigent Italians here. The details of such withdrawals would be submitted to the Junta de Custodia, or to any agency designated by the Government, for information and approval.

The Minister of Finance has now requested this Embassy to inquire whether the Treasury Department will accept the dollars in the United States for credit to the Banco Nacional under the above arrangement.

Des Portes
  1. The American Legation in Costa Rica was elevated to the status of Embassy on May 20, 1943, when Ambassador Fay Allen Des Portes, succeeding Minister Robert M. Scotten, presented his credentials to the Costa Rican Government.
  2. Luís D. Tinoco Castro succeeded Carlos Escalante as Minister of Finance in April 1943.