FOREIGN RELATIONS, 19 4 2 , VOLUME VI



April 19, 6 p. m., I stated that a decision had been reached to assist
the Costa Rican Government financially and that a proposal or pro-
posals as to how this might be done would be handed to Se-nor Esca-
lante, the Finance Minister, prior to his departure from Washington
this afternoon. I said, however, that there did not seem to be any
way for us to be of assistance without the passage of pertinent legis-
lation by the Costa Rican Government and possibly agreement on
the part of the National Bank. The proposal made by Se-nor Esca-
lante involving the use of the gasoline tax was not feasible.
  Referring to the first paragraph of San Jose's 195, I said that
Se-nor Escalante had persistently stated that current revenues and ex-
penditures of the Costa Rican Government were more or less balanced
and that the financial assistance now requested was to take care of
an accumulated floating debt built up over the past couple of years.
On the other hand, the telegram refers to the possible inability to meet
May 1 payrolls.
  The Minister stated that while the financial situation facing the
Government is a serious one, he believes that our proposal will meet
the requirements of the Costa Rican Government. He pointed out
that the regular session of Congress takes place early in May and that,
furthermore, there is nothing to prevent the President from calling a
special session if he so desires.
  I told the Minister that our proposals involved assistance to the
extent of a maximum of $1,000,000.


518.51/984: Telegram
  The Secretary of State to the Minister in Costa Rica (Scotten)

                               WASHINGTON May 5, 1942-9 p. m.
  174. The Costa Rican Minister has informed the Department that
his Government finds it difficult to accept the proposition for the
$1,000,000 credit made by the Export-Import Bank. It urges recon-
sideration of the proposal to increase the existing credit by $1,000,000.
  The Minister intimated that his Government had taken this step
because of political difficulties the nature of which he was unable to
understand because the approval of Congress for the credit would be
necessary in any case.
  The Legation's comment and advice are requested.
                                                            HULL



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