811.95118/2–954

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

confidential
No. 614

On February 6, President José Figueres received Ambassador Hill and the reporting officer at the Casa Presidencial. A Memorandum of Conversation, largely self-explanatory, is enclosed.

It was the feeling of Ambassador Hill and the writer that the President’s attitude toward United Fruit Company and U.S. private investment had softened considerably. Ambassador Hill, reporting on his trip to Washington, spoke frankly of don Pepe’s detractors on Capitol Hill, information which amply confirmed what had been told him innumerable times before by the Ambassador and the writer.

[Page 836]

It is felt that President Figueres has received the friendly advice in the spirit given and is altering his attitude in order to conform to the realities of U.S. policies.

The conversation was carried out in a completely friendly and frank atmosphere and the President’s attitude was in sharp contrast to that of last November when he lashed out at United Fruit and became notably agitated when discussing the possibility of attending the Caracas Conference1 while the Perez Jiménez regime “tortured and killed” his friends.

For the Ambassador:
C. Allan Stewart

First Secretary of Embassy

Enclosure

Memorandum of Conversation, by the First Secretary of the Embassy in Costa Rica (Stewart)

confidential

  • Participants: President Figueres
  • Ambassador Hill
  • First Secretary Stewart

President José Figueres expressed a desire to talk with Ambassador Hill following his return from the United States and on February 6 a meeting was held at the Casa Presidencial.

Congressional Attitude Toward Figueres

Ambassador Hill expressed his pleasure at being back in Costa Rica and told the President he would be pleased to give him his impressions of the visit to Washington if the President was interested. He said he was considerably surprised by the attitude of certain Congressmen who criticized President Figueres for his stand on United Fruit Company and the failure of Costa Rica to make its stand known on attending the Caracas Conference. The President’s views on private investment, as published in the New Leader and made during the presidential campaign, Ambassador Hill said, caused resentment in certain congressional circles.

The President listened attentively, and when Ambassador Hill was finished said he was glad to receive this frank information. He stated that his feeling toward private investment was completely misunderstood in the United States and was due in a large measure to the title put on the New Leader article. He pulled out a letter written to [Page 837] that magazine, mildly complaining that his heading, “A Bold New Program,” had been changed to “We Do Not Want Foreign Investments.” In the letter he asked the magazine to publish excerpts from his inaugural address to clarify his position.

“For us to not want private investment would be completely crazy,” the President said.

He then went on to say that a liberal government such as his would always be criticized by certain Congressmen and others of an extremely conservative bent. He said he realized that his socially inclined government would be accused of being communistic. “I do not get mad at them,” the President stated. “One has to be very patient with those kind of people, who generally mean well.” He stated that he was convinced that there were no more than five per cent of this type of thinkers who really thought U.S. business should completely control Latin America.

Inter-American Highway

The Ambassador then outlined in detail the thinking of the House Appropriations Committee on the Inter-American Highway. He said that during his testimony before this group that the chairman was openly hostile to appropriating further funds for the road. A more moderate member (Rep. Frank Bow, Ohio), suggested that a sub-committee from the group visit Costa Rica to see the highway and that he (the Ambassador) had forwarded an invitation asking it to come sometime in February.

The President said he was very anxious to have the group visit Costa Rica. Not only would it see what great strides were taken by the Public Roads Administration but also it would give him an opportunity to set the boys straight on his economic philosophy. The President stated that he would personally devote much of his time to the sub-committee during its visit in Costa Rica.

International Bank Loans

The President was interested in news from the International Bank on a $15,000,000 loan for Costa Rica. Ambassador Hill stated that he had talked with Eugene Black, President of IBRD, who expressed interest in the affair and planned to visit Costa Rica around February 25.

The President was pleased to hear this and at the Ambassador’s suggestion promised to instruct his various ministers to have detailed studies available for the IBRD head. The President reiterated that he wanted the loan for (1) hydroelectric projects; (2) improvement of secondary roads, and (3) for refinancing and completion of the El Coco airport.

Plans are drawn for the hydroelectric projects. The President’s idea regarding secondary roads is to use $2,500,000 for improving some 2,000 kilometers of roads now in use. He said that most of these [Page 838] feeder roads were impassable in wet weather and terribly dusty in the dry months. By surfacing them they would become all-weather arteries and enable farmers and ranchers to reach the main highways.

The President confirmed what everybody knows at present: the El Coco airport cannot be finished until the government obtains more money. This is a field that will replace the present La Sabana airport in San José, which accommodates nothing larger than two-engine planes.

The President repeated that Black’s visit would give him a chance to set the record straight on his feeling toward private investment in this country.

United Fruit Company

The President was asked about the United Fruit situation and he began by saying that he had had to settle the strike which tied up operations in the Puerto González area for some weeks. He said negotiations for revision of the present contracts were progressing favorably both in San José and in Washington. The company representative here, Walter Hamer, was in contact with Minister of Finance Jorge Rossi, and the latter had received the terms of the Baggett offer the day before. He added that Foreign Minister Mario Esquivel and Sam Baggett, general counsel of United Fruit, had met several times in Washington.

The President seemed quite pleased that negotiations were moving along and the Ambassador and Stewart had a feeling the company and government were not too far apart on the financial aspects of an agreement. Figueres indicated that the company was willing to waive exemption on several items now imported duty-free and he stated that the government would impose a ridiculously small duty on such items as fertilizer, materials for insecticides, etc. The President quite contentedly said this would be the beginning of an ending of discriminations in favor of United Fruit Company, but he said the period of transition would continue for some years.

The President’s reasoned attitude and apparent delight that United Fruit was cooperating satisfactorily in the negotiations contrasted greatly with that of a few months ago, when he bitterly complained of a “country within a country,” and described Baggett as a “fiera.”

The President said he was still studying a reply to United Fruit’s letter2 of last month. In view of Ambassador Hill’s adverse report on the feeling toward him on Capitol Hill, he said he would re-state his attitude on nationalization as well as rights of private investment, and investment itself, when he made his reply.

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Both Ambassador Hill and the writer were completely astounded by all the sweetness and light. All of it could not have been the result of February 6 being his wedding day.

Dominican Charges

President Figueres said Trujillo’s charges of harboring communists was part of a campaign by the dictators to discredit his government. However, he said that Luis Alberto Monge, ORIT Secretary General, had reported that the communists planned to concentrate their labor activities in Costa Rica and Chile and to that end, planned to bring into his country some 20 agitators. The President said Trujillo might have got wind of this move. In any event, the President stated, he would welcome any information Trujillo had and a close watch would be kept on commie activity in the country.

Caracas Conference

With regard to the Caracas Conference, the President said that his country would make its decision about attendance when Foreign Minister Esquivel returned from his trip to the United States. Esquivel was expected in San José around February 10.

The President inquired whether there was any indication that the Perez Jiménez regime would release all political prisoners before the meeting was held. He was told that there was no such indication and it was the Embassy’s opinion that any move of this nature would not occur. He said he had heard no more than 200 prisoners were released in the New Year’s amnesty and asked whether we had received any estimate. He was told his estimate was higher than ours.

The President was told that the U.S. would present some rather far-reaching economic proposals at the conference and that the Guatemalan situation undoubtedly would be aired. The presence of Costa Rica at the conference would be important in view of these topics, the President was told.

The President made no comment except to state that morality in the hemisphere was at a pretty low ebb at this time.

Lack of Latin American Statesmen

The report of Labor Minister Juan Lechin’s resignation from the Bolivian cabinet was brought to the President’s attention and he said this development might weaken the Paz Estenssoro government. However, he said, the government would be better off with Lechín in an opposition role, as long as it didn’t bring about Paz’ downfall. As in the past, he spoke deprecatingly of Lechín, crediting him with little intelligence. “He was just a football player,” said the President, which got a big laugh from a couple of broken-down U.S. athletes.

Seriously speaking, the President declared, statesmanship in Latin America was at a pretty low ebb at this time. [Here follow personal remarks.]

  1. Reference is to the Tenth Inter-American Conference, held at Caracas, Venezuela, Mar. 1–28, 1954; for documentation on the conference, see pp. 264 ff.
  2. A copy of the referenced letter, from Walter Hamer to President Figueres, dated Jan. 18, 1954, is contained in MID files, lot 57 D 15, “Costa Rica—United Fruit Company, 1954”.