1940: Costa Rica

Costa Rica, the most democratic nation of Latin America, has resisted the Central American trend towards continuísmo (the lengthening of the presidential term by tampering with the constitution or legal machinery of the state), the President rejecting a proposal this year to extend his term from four to six years. President Calderón Guardia, who assumed office May 8, was elected Feb. 11, by an overwhelming majority, in the country's first secret and obligatory balloting. The new President represents the National Republicans. He was opposed by the Communists, who are limited to the towns, and by the Brotherhood Party, a group organized in the isolated province of Guanacasteca to fight Communism, and, with this election, participating in national politics for the first time.

Before his inauguration the President visited the United States and, since his conversations with President Roosevelt, has repeatedly stressed his country's willingness to work for continental solidarity and to take all measures necessary for joint defense of the Panama Canal. In September he announced the offer of a long-term lease of Cocos Island, 400 miles off the Pacific Coast, to the United States for air and naval bases to guard the western approaches to the Canal. Like the Galapagos Islands off the coast of Ecuador, this island is realized as having strategic value to the United States. Again, at the close of the year, it was reported from Costa Rica that the project of the United States to assist in the establishment of defense bases in Mexico, Nicaragua and Costa Rica, the bases to belong to the country of their location and to be managed by United States officers only in the event of war requiring the defense of the Canal and of the Americas generally, had the support of the Costa Rican people. Opposition to this question of bases has been articulate, too, and hemisphere defense has been attacked by the defeated Communist presidential candidate as a cloak for North American commercial supremacy in Latin America.

Similar criticism has been made of the Costa Rican section of the Pan-American highway, to be constructed with a $4,600,000 Export-Import Bank loan, announced Sept. 24, practically 60 per cent of the proceeds of which are to be used for the purchase of equipment in the United States. This was the first commitment under the increased Congressional appropriation to the Export-Import Bank (see also ARGENTINA), and is assigned to an undertaking which is of strategic importance in connection with Canal defense. It will benefit Costa Rica by partially meeting the unemployment problem due to the drastic curtailment of the Republic's coffee market. The Communist attack on the road maintains, however, that the country needs a highway running from the Atlantic to the Pacific, not a military road southward.

Improvement in the coffee situation is hoped for now that the United States marketing quota fixed at 200,000 bags annually for the next three years (see EL SALVADOR), has been established. This figure compares very favorably with actual shipments to the United States of 110,000 bags during the crop year 1939-40. Further credits may be needed from the United States, however, to purchase surplus coffee, 50 per cent of which will remain unsold, although the government has agreed to take up this balance and issue money against it. The heavy import surplus is, in part, due to the expenditures by the United Fruit Company, about $9,000,000 out of a proposed $15,000,000, on its project for the Parría-Quepos banana development on the Pacific slope. This enterprise represents the best example of scientific banana farming in the world. Although marketing Costa Rican coffee is a serious problem, cocoa and banana exports have been well maintained this year. A plan for rubber cultivation has been proposed to Costa Rica by the United States Government, as the result of an investigation conducted by the Department of Agriculture under a $500,000 appropriation for the study of mass production of rubber in the Americas, by which the United States would furnish the money to establish a rubber industry and set up experimental stations under United States specialists.