The President of the Export-Import Bank of Washington (Pierson) to the Costa Rican Ambassador (Gutiérrez)17

Dear Mr. Ambassador: Reference is made to our recent conversation during which you handed us a copy of the statement, dated San José, Costa Rica, November 6, 1944, addressed to the Constitutional Congress by the Committee on Finance of the Legislature.

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It will be recalled that the matter of postponing the amortization of the principal of the loan granted to the Republic of Costa Rica by our Agreement of July 9, 1942 was first discussed at the beginning of last May while President-elect Picado and his entourage were in Washington. Export-Import Bank indicated that it would give sympathetic consideration to a request for a postponement for one year of payments on principal upon demonstration (1) that the new administration in Costa Rica had adopted, in substance, the fiscal reforms recommended by Messrs. Ness and Kekich of the United States Department of the Treasury, and (2) that the Government would take such action as might be necessary to reduce Government expenditures, particularly in the Ministry of Fomento for public works, increase its collection of existing taxes and consolidate its control of Governmental disbursements. Upon receipt of advice that such reforms had been adopted and action taken, Export-Import Bank signed the Amendatory Agreement of September 28, 1944. Subsequent information received would indicate that the measures adopted by the Government were not effective in bringing about the ends sought.

We regret to advise that Export-Import Bank cannot postpone amortization of the principal of the loan until some indefinite date after the termination of the war. The failure or inability to implement the above program leads us to believe that the economic condition of the Republic of Costa Rica in August 1945 will show no improvement over August 1944.

In view of the foregoing and of the fact that the Costa Rican Congress declined to approve the Amendatory Agreement of September 28, 1944, it is respectfully requested that His Excellency the Costa Rican Ambassador inform his Government that Export-Import Bank has had no choice but to withdraw said Amendatory Agreement and to request that it should not be submitted again to the Costa Rican Congress for action thereon.

Sincerely yours,

W[arren] P[ierson]
  1. This letter was not accepted by Ambassador Gutiérrez when handed to him by Mr. Le Baron of the Export-Import Bank on December 5.