818.51/12–1244: Telegram

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

664. Don Julio Peña informed me today that on December 5 Ambassador Gutiérrez sent President Picado telegram saying that Export-Import Bank had turned down proposal of Costa Rican Congressional Committee (see Department’s confidential instruction No. 779 of December 6).21 Ambassador Gutiérrez recommended that Costa Rican Congress immediately ratify amendatory agreement of September 28. Don Julio says that this has been done and it only remains to publish ratification to make it legal. He added that Congressional action is in accordance with his original recommendation but that Gutierrez on recent visit to Costa Rica had told Congressional Committee that he thought he could obtain longer moratorium and also suggested statement which was issued by that committee.

I asked Don Julio regarding status of legislative reforms about which he had spoken to me several times and he replied that he now has confidence that three projects of law will be ready at end of this month. He said his bank is especially interested in them for obvious reasons and he has been pushing the work of Committee as hard as possible. He also said that he had personally guaranteed to Export-Import Bank that these reforms would be made effective but added that this guarantee did not form part of contract for amendatory agreement.

Don Julio said that interruption of traffic in Atlantic railway and uncertainty regarding coffee prices have been important factors on top of previous difficulties to prevent government from balancing its budget. He estimates that government has lost between 2 and 3 million colones22 in customs revenue because of inability to move goods [Page 891] from Puerto Limox to San José where duties are collected from importers. Banco Nacional moreover is carrying coffee exporters who do not wish to sell because of uncertainty about American coffee prices and that this is important factor in present inflation.

Memorandum of conversation in detail follows by mail.23

Optimistic statements of Gutiérrez to Costa Rican Congress are not consistent with those he made to Mr. LeBaron and reported in latter’s memo of November 29. His apparently unwarranted intervention was probably connected with Costa Rican internal politics. If Export-Import Bank interprets counter proposal as annulling original offer cooperative efforts now being exerted by Peña, Finance Minister and Costa Rican Congress to solve serious difficulties of government may be critically jeopardized and there may be repercussions on already weak position of Picado government.

  1. Not printed, but see footnote 14, p. 885.
  2. Approximately $342,000 to $685,000, United States currency.
  3. Transmitted to the Department in despatch 2204 of December 13, 1944, from San José; not printed.