Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

811.05118/11–2553: Telegram

The Ambassador in Costa Rica (Hill) to the Department of State

confidential
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San José, November 25, 1953—7 p.m.

50. At his urgent request I visited Foreign Minister Esquivel today to discuss United Fruit problem. Esquivel said he had been chosen by Figueres conduct negotiations with company on basis 50 percent of profits and end “discrimination” by firm against Costa Ricans. When queried about Figueres’ expropriation plan (Embdes 389 November 20),¹ Esquivel said it President’s long-range plan but he personally opposed to it.

Esquivel asked me as “personal favor” to notify United Fruit that government prepared begin negotiations immediately and President wanted answer soonest whether I willing carry message. I reiterated stand which made President at November 19 meeting, where Esquivel present, that Embassy interested in outcome negotiations but maintaining hands off unless impasse developed, when Embassy would attempt get negotiations started again.² Esquivel surprised I had not complied with President’s intimation made November 19th that I advise company that government ready negotiate. I reminded him what I had told President about Embassy not desiring get involved in negotiations.

I see no advantage for Figueres want Embassy carry this message unless for future exploitation in press but Esquivel, by placing it on personal basis, makes turn-down difficult. I perfectly willing advise Hamer³ of United Fruit that government wants begin negotiations as Stewart and I agree it unlikely we can remain aloof from this problem, but prefer Department express its views soonest.⁴

Every indication government will drive hard bargain. On November 23, Official Gazette published text projected expropriation law which when passed (Esquivel says quick passage by Congress certainty) would give government right expropriate property with little recourse appeal. Esquivel frankly admitted it presented in Congress as means pressuring Fruit Company.⁵

Hill

1. President Figueres’ expropriation plan, as reported in despatch 389, from San José, dated Nov. 20, 1953, not printed (811.05118/11–2053), proposed the Costa Rican Government’s purchase of United Fruit Company’s physical assets in Costa Rica, amortized over a 12–14-year period, and an arrangement whereby the Costa Ricans would produce the bananas and United Fruit would market them in the United States.
2. Despatch 389, which contains a summary of a meeting held on Nov. 19, 1953, reads in part as follows: “Ambassador Hill, in the conversation, told the President that he was instructed to closely observe the United Fruit problem but that it was a matter for the government and the company to resolve. If the negotiations became stalemated, the Embassy would be willing to do what it could to get things moving again, but that it was taking no sides in the matter.”
3. Walter M. Hamer, General Manager, Cía. Bananera de Costa Rica (United Fruit Company’s subsidiary in Costa Rica).
4. Telegram 47, to San José, dated Nov. 27, 1953, signed for the Secretary by Deputy Director of the Bureau of Inter-American Affairs Neal, stated that the Embassy was correctly interpreting the Department’s position with respect to the United Fruit Company discussions, and instructed Ambassador Hill as follows: “You may, at your discretion, unofficially mention to Hamer statements of Esquivel and then tell Esquivel you repeated his remarks unofficially as personal favor. Make clear to Hamer, emphasize to Esquivel that U.S. not acting as intermediary or spokesman because such not needed in view apparent willingness both parties to have full frank discussion of mutual problems.” (811.05118/11–2553)
5. Negotiations between the Costa Rican Government and United Fruit Company began on Nov. 30, 1953.