The Chargé in Costa Rica (Trueblood) to the Secretary of State

No. 608

Sir: I have the honor to refer to the Department’s circular instruction of August 20, 1943,43 regarding procedures and policies on the maintenance of the Proclaimed List.

The instruction has been read with great care and interest and this Embassy is fully in agreement with the principles underlying the policies described therein. Regarding the specific application of these policies to Costa Rica, the following observations are believed to be pertinent:

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With respect to future additions to the list in Costa Rica, the Embassy believes that the limitation of recommendations in the manner described in page 4 of the instruction is practicable and consonant with our interests, and with these limitations it is believed that there will be little, if any need for future additions, unless it is subsequently found that cloaking operations cannot be adequately and effectively controlled otherwise.

With respect to maintaining the Proclaimed List in Costa Rica as an instrument of control, it is unanimously agreed in the Embassy that the Costa Rican Government cannot now, or in the foreseeable future, be depended upon to exercise effective controls without the support of the Proclaimed List. It is believed, therefore, that an offer to delete all or nearly all of the names on the list for Costa Rica as a means of obtaining further action by the local authorities would not achieve the desired results, and such deletions as should take place (which will be described hereinafter) should be based on individual cases and on the decision as to whether any control at all should continue to be maintained in those cases. The reasons for this Embassy’s lack of confidence in the ability of the Costa Rican authorities to maintain adequate controls in the absence of the Proclaimed List are various: firstly, Costa Rica inevitably looks to the United States to set the pace in the field of economic warfare, as it does in many other fields. This being the case, the elimination of our Proclaimed List controls—regardless of our explanations and protests to the contrary—would unquestionably be interpreted as an indication that a stage of the war has been reached where a general relaxation of economic warfare measures is desirable. Secondly, the Proclaimed List is the very backbone of the Costa Rican controls. The control laws expressly refer to the Proclaimed List and make the controls specifically applicable to persons and firms on the list. Elimination of our Proclaimed List might therefore require a substantial change in existing legislation. Thirdly, it is probable that maintenance of our Proclaimed List has been mainly responsible for such controls as have been established here and for the measures which have been taken, particularly within the past year, with regard to enemy property. As has been previously reported to the Department, almost all of the enemy property expropriations which have taken place to date have been expressly based on “the injury suffered by the local economy by reason of the inclusion of the properties or industries on the Proclaimed List” and the consequent necessity that their ownership be transferred to desirable interests. Costa Rica is a small country with a very high incidence of inter-marriages, and the ties of blood and marriage are factors of great political weight. Costa Rican authorities are often able to withstand pressure of this sort by pointing to [Page 118] the Proclaimed List, over which they have no control, and justifying their actions on the basis of the position in which they have been placed by reason of the action of our Government. The Proclaimed List can therefore be regarded as a wall which has protected and supported the local controls, and if the wall should crumble, the disintegrating force of political and family pressures would have free play. This is illustrated by the fact that many persons who are on the list have been known to state that they are not in the least disturbed by the controls maintained by the Junta de Custodia; that their main concern is to get off the Proclaimed List and if they succeed in doing so, they will be able to get along even within the framework of the local controls. Likewise, Costa Rican officials have sometimes approached this Embassy and requested that specified persons whom they wish to control be included in the list, for otherwise they would not be able to do so.

With all of the above considerations in mind, it is unquestionable that much has been accomplished by local measures. The richest and most important agricultural and industrial properties of Proclaimed List nationals, aggregating about three million dollars in value (a large figure for this country) have been expropriated; other firms have been forced to liquidate, while many have been sold to desirable interests, and the large bakery of Musmanni Hermanos has suspended operations for almost a year. The Proclaimed List in Costa Rica is undoubtedly cluttered with the names of many persons who are neither dangerous, important, nor powerful, who own no property, and whose continued control not only fails to serve a useful purpose but may actually be detrimental to our interests. There are, for instance, individuals who have been included in the list because of one or more cloaking transactions in the past, which may have been the result of ignorance, poor judgment or other factors, but not necessarily lack of sympathy with our cause. The net effect of their inclusion in the list is that they are not only unable to do business by themselves, but they are unable to secure any employment, and they are faced with the alternatives of being driven to complete dependence upon others in order to subsist, or of seeking clandestine ways of earning their living. This results in ill will toward the United States for what appears to be a policy of persecution against individuals who cannot be regarded as dangerous to our interests. It is not intended to intimate that our Proclaimed List policy with regard to cloaking has been erroneous, for it is firmly believed that the vigor with which this policy has been executed has been a great deterrent to cloaking operations, but cloaking is dangerous only insofar as it benefits interests which are inimical and which should be controlled and the number of the latter in Costa Rica is now substantially limited.

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The Embassy proposes, therefore, to pursue the following procedure with respect to the Proclaimed List in Costa Rica, and the Department’s views on the desirability of this plan will be appreciated.

The Proclaimed List will be subjected to a careful and thorough revision for the purpose of determining those names which, in any event, should be kept on the list, either because they should be controlled and the Embassy is satisfied that they would not otherwise be controlled, or because their pro-Axis sentiments or Axis affiliations are so well and commonly known that their deletion would have an unfavorable popular effect. The remaining names could then be considered as proper cases for exclusion from the list, but the Embassy would not recommend their deletion in a block. It is believed the effect of a sudden and substantial curtailment of the Proclaimed List would not be desirable, from the point of view of the reaction of the local authorities as well as of the public. Recommendations for deletion would be undertaken in a gradual manner, starting with those cases which are most clearly proper for such action and which have been on the list for the longest time. In this manner, too, the effect of the policy could be gauged more properly and if for any reason further curtailment of the list did not appear desirable at a given stage, the process could be discontinued. It is expected, however, that in this manner the Proclaimed List could eventually be restricted to the nucleus of really “bad” cases, where further deletion would be harmful to our interests.

Of course, if at any time it appeared that full reliance could be placed on the local controls and that elimination of the list in Costa Rica could be undertaken without detriment to our interests, the Department would be so advised with a view to the establishment of a program along the lines of that which is contemplated in the case of. Brazil.

Respectfully yours,

Edward G. Trueblood
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