1942: Costa Rica

Military and economic cooperation between the United States and Costa Rica, the first Latin American nation to declare war on all the Axis powers, was extensive during 1942. The Costa Rican army, numbering not much over 500 men a year ago, has been expanded and is being trained by a United States military mission which arrived in February. United States military units are stationed in the country. By an agreement signed Jan. 16, lend-lease funds of $550,000 were allocated for the purchase of arms for the new army. Costa Rican bases have been put at the disposal of the United States. Finally, the all-weather 'pioneer' road is being rushed to completion through Costa Rica by the United States. Designed to supplement the still incomplete Inter-American highway, it will provide uninterrupted overland communication to the Panama Canal. It would have great strategic significance in the event of a blockade of the Canal; in the face of the submarine menace it will serve a very useful function in providing freight transportation facilities from Central America to the United States. Work on the permanent Inter-American highway is being speeded up in all five Central American Republics as the result of a $20,000,000 loan approved Jan. 16 out of a special fund set up by the United States Congress. Of this amount Costa Rica was to receive $8,000,000 towards the completion of 250 miles which, at the beginning of the year, were still unpassable; an additional $4,000,000 was to be taken from the Costa Rican treasury for this purpose.

The torpedoing of a United Fruit Company steamer in the harbor of Puerto Limón in July, causing the death of a number of Costa Rican workmen, led to violent anti-Axis demonstrations in Costa Rica, which resulted in the wrecking of some eighty Axis-owned business establishments. In November, Costa Rican coastal defenses 'repulsed' a German submarine which was foraging for food and supplies only about 200 miles from the Panama Canal.

By an agreement announced June 16 with the Rubber Reserves Corporation, similar to pacts concluded with Brazil, Perú, and Nicaragua, the United States will purchase all exportable rubber produced in Costa Rica in the next five years. Costa Rica, like Brazil, has also been stocked with seeds from the Firestone rubber plantations in Liberia. A contract for the planting of hemp by the United Fruit Company on abandoned banana lands was the subject of a special session of the Costa Rican Congress in February. The loss of the Philippines supply of manila hemp would make this abacá development significant to the United States.

On Aug. 9, final Congressional approval was accorded to the $2,000,000 loan from the Export-Import Bank which will be used to consolidate the floating debt as well as to finance public works.