1939: Costa Rica

A political move without precedent in Costa Rican history was made in July when a united front of all opposition parties, including the Communists, was formed to oppose Dr. Calderón Guardia, President Cortés Castro's semi-official candidate for president in the elections to be held in February 1940. The new bloc is called the National Democratic Alliance. It has declared that democratic institutions in Costa Rica, which is unique among Central American republics in the strength of its democratic tradition and practice, were threatened by official pressure. The Alliance has succeeded in getting 80-year-old Dr. Ricardo Jimenez, three times President of the Republic and a personally popular and very able political figure, to run as its candidate. Political excitement in the country is great.

President Somoza of Nicaragua during the year unsuccessfully attempted to negotiate a treaty with Costa Rica for the canalization of the San Juan River, a feature of one of the three suggested plans for a second interoceanic canal. Costa Rica has never accepted the Bryan-Chatnorro Treaty, which grants the United States canal rights across Nicaragua, because of the failure to consider Costa Rica's rights in framing that pact.

A measure, before Congress since 1937, was passed in March establishing a customs surtax of 100 per cent on imports from nations with which Costa Rica has an unfavorable trade balance. This law will affect Japanese imports principally, Japan's favorable balance from 1935-38 being $2,766,833. Italy's action in curtailing the use of coffee is likely to cause a surcharge on Italian imports also. The object of the measure was to protect, by greater reciprocity, trade with the United States and Great Britain. Germany replaced Great Britain as the heaviest purchaser of Costa Rican coffee in 1938-39, German ownership of coffee plantations and control of coffee-cleaning plants aiding the Reich's trade with the Republic.

Germany's extensive economic interests in Costa Rica and the proximity of this Central American republic to the Panama Canal have led to a sharper fear of Nazi penetration and espionage here than in any of the other Central American states. On the other hand, the exceptional adherence of Costa Rica to democratic institutions and procedure should make it less fertile soil for Nazi propaganda.

A plan was announced in March for a three-year resumption of interest payments on the Republic's defaulted dollar bonds, outstanding to the amount of $8,131,720. In its statement recommending nonacceptance, the Foreign Bondholders' Protective Council said. 'The council feels, and its feeling is confirmed by disinterested studies, that Costa Rica could make a larger service. The council considers the service unjustifiably low in view of the fact that Costa Rican revenues in the past two years have been the highest in the country's history; yet the offer now made is the lowest Costa Rica has ever made to the bondholders and represents only 3.4 per cent of the Government's budget for this year.'