800.515/3–2945: Airgram

The Secretary of State to the Ambassador in Costa Rica (Johnson)

A–216. It is not possible to reach a final conclusion concerning the desirability of the proposed legislation referred to in your 187, March 29,9 without reviewing the text of such legislation.

It may be stated, however, that the Department’s policy is to encourage the permanent elimination in this Hemisphere of the hard core of Axis influence through expropriation, liquidation and forced sale procedures. This includes both rural and urban properties.

The permanent elimination of dangerous, pro-Axis firms and individuals is an important part of our economic warfare program in [Page 306] Latin America, and the Costa Ricans should be encouraged to adopt all measures necessary to accomplish the desired end. The following comments may, however, be made in this connection.

Whether a firm or individual is, in point of fact, a part of this hard core of Axis influence should be judged on a case to case basis in the light of the information available. This principle of the application of wartime controls on a selective, rather than a nationality, basis is clearly stated in the Resolutions of the Washington Conference which were recently reaffirmed in Resolution XVIII of the Mexico City Conference.10

The Department understands that four firms have already been subjected to expropriation. The Embassy is requested to report the names of any additional firms and individuals which are deemed by it to be sufficiently dangerous to the future security of the Hemisphere to warrant expropriation. In this connection, it may be stated that it has been the practice to submit to the other American Republics for their consideration lists of enterprises considered by this Government to be deserving of expropriation. Possibly it will be desirable to follow this procedure in the case of Costa Rica.

In view of the possibility that the real motive for the proposed expropriation program may be the desire to obtain funds, the question is presented whether the Department should encourage the extension of the nationalization program to those firms and individuals, which, in the Embassy’s opinion, are relatively innocuous, but which the Costa Ricans may regard as dangerous. Since opinions may differ concerning the relative merits of a case the Department may not be in a position to oppose directly an extension of the expropriation program to persons who have been included in our Proclaimed List although some persons on the List admittedly cannot be classified as a spearhead of economic penetration or as part of the nucleus of German influence. The extension of an expropriation program to all persons of German and Italian nationality regardless of their sympathies and activities would seem to be undesirable, particularly in the case of Italians who, as a rule, do not constitute so much of a menace as the Germans.

It should also be stated that it is desired to avoid, to the fullest extent possible, the onus for the expropriation of properties of relatively innocuous firms and individuals under the guise of economic warfare, but for the real purpose of increasing the revenue. Furthermore, if it is proposed to base an expropriation program on the Proclaimed List, this Government must continue to reserve the right to [Page 307] control, after consultation with the Costa Rican Government, what names should be added to or deleted from the List.

Please endeavor to obtain the text of the proposed legislation and in the interim you may wish discreetly to inform the appropriate authorities in a very general way concerning the Department’s views regarding this question.

  1. Not printed; in this telegram the Ambassador reported an informal inquiry from the Costa Rican Minister of Finance, Alvaro Bonilla Lara, as to the Embassy’s views on proposed legislation providing for more drastic action regarding German properties in Costa Rica (800.515/3–2945).
  2. For text of Resolution XVIII, see Pan American Union, Final Act of the Inter-American Conference on Problems of War and Peace, Mexico City, February–March, 1945 (Washington, 1945), p. 55.