San José Embassy Files

The Ambassador in Costa Rica (Johnson) to the President of the Export-Import Bank (Taylor)


Dear Wayne: The Costa Rican Minister of Finance, Alvaro Bonilla Lara, has sent me a copy of his letter to you of July 6 (I have naturally forwarded a copy of this letter to the State Department).26 To my untutored financial mind, the plan seems a reasonable one and I hope that it may prove possible for you to take a kind view of it.

This is a country rich in natural resources with many well-to-do coffee growers and agriculturalists. The last administration, however, left the government in a deep financial hole. President Picado and his Cabinet are, to my mind, an honest crew who are doing their utmost to salvage the ship. Three projects of law for financial reform will undoubtedly be passed shortly by Congress since all the political parties realize the necessity of such action. These laws have been drafted along the lines suggested by Kekich and Ness of the Treasury and should, for the first time, give this little country a sound financial basis. Once this is done, these laws must be implemented and thereafter the possibility exists that taxes will be efficiently collected and that the ridiculously low income and real estate taxes will be raised.

I have felt that nothing more could be done to help Costa Rica out of its financial quagmire until at least these laws have been enacted, but subsequent to the passing of this legislation I am very keen that [Page 892] a country which has by far the most stable and democratic government in Central America should not be allowed to go to pot.

. . . . . . . . . . . . . .

Very sincerely yours,

Hallett Johnson
  1. Not printed; in his letter Bonilla Lara proposed a plan by which his Government would borrow 11,000,000 colones from Costa Rican banks in order to repay immediately the $2,000,000 stabilization loan of July 9, 1942. In return for this advance repayment, the Export-Import Bank would be asked to allow the postponement, from 1946 to 1949, of the beginning of amortization payments on its other credit, the $5,000,000 highway loan. (818.51/7–1245)