811.05118/4–1954
Memorandum of Conversation, by the Assistant Secretary of State for Inter-American Affairs (Holland)
Subject:
- United Fruit Negotiations with Government of Costa Rica.
- Participants: Mr. Thomas Corcoran, Attorney for United Fruit Company
- Mr. Joseph Montgomery, Executive Vice President, United Fruit Co.
- Mr. Henry F. Holland
Today at the invitation of Mr. Thomas Corcoran I lunched with him and with Mr. Joseph Montgomery in a private room at the Carlton Hotel. They wanted to discuss negotiations beginning next week between the United Fruit Company and the Costa Rican Government regarding an amendment of the contract between the two. Mr. Corcoran asked that I report the substance of the conference to General Smith.
Mr. Corcoran stated that a number of the Company’s Board of Directors were frightened by the prospects of oppressive moves by the Costa Rican Government and anxious to reach an agreement on amendments to the contract even if it required substantial concessions.
The United Fruit negotiating team is composed of its local manager in San José, Mr. Sam Baggett, its General Counsel, and Mr. Joseph Montgomery, [Page 842] its Executive Vice President. Mr. Corcoran said that he feared that the first two reflected the views of the conciliatory group referred to above, whereas Mr. Montgomery and he, as one of the Company’s lawyers, felt that the Company should not be quick to reach an agreement and should hold out for more favorable terms.
Mr. Corcoran said that within the next few days General Cutler would invite me to have dinner with him and with a Mr. Coolidge, the Chairman of the Company’s Board of Directors. He urged, first, that I attempt to have Mr. Montgomery included at that dinner and, second, that I recommend there that the Company take its time in the Costa Rican negotiations and not be quick to reach a settlement.
I said that within the limits of courtesy, if an opportunity presented itself, I would be glad to suggest that Mr. Montgomery as one of the members of the negotiating team be included in the dinner.
As regards recommending a firm attitude at the negotiating table, I replied that it seemed to me unwise for a representative of the Government to be urging officers of any American company to take any particular attitude in their substantive negotiations with a foreign government. If we do, and if the results are unfavorable to the Company, we will obviously be held to blame.
As a lawyer I have at one time or another done some negotiating with representatives of Latin American governments, and I expressed the purely personal opinion to Mr. Montgomery that if you go into one of these negotiating sessions with the idea that you have to reach a quick solution you are liable to make a poor settlement. The Latin American government officials are usually prepared for a somewhat long session, and in my personal opinion the American businessman should be prepared for the same thing.
I said that I felt that the first responsibility of the Department of State was to attempt to serve the interests of our Government. However, I recognized that a very important secondary responsibility was to further the legitimate interests of American business abroad. I said that in the discharge of that important secondary responsibility we would stand ready to do anything that we properly can to help the Company in its negotiations. In this connection I said that if, after a reasonable period of negotiation, it was apparent that the two parties were making no headway, we would be glad to consider the advisability of asking Ambassador Hill on an informal basis to see if he couldn’t suggest to the Costa Rican Government the desirability of a more flexible attitude on their part.