DECLASS Authority Stateletter in hez!
2: ML, R3 Czte 24 18 MAIL the move, and it is felt that his stand accurately reflects the opinion of the moderates among the growers.
On the other hand, Labor seems highly satisfied with the gains made; the August 12 issue of TRABAJO, weekly orgar esue of TRABAJO, weekly organ of the Vanguardia Popular Party, in a feature article declared that the decree was a great triumph for the Costa Rican people and an incontrovertible affirmation of the just and progressive orientation of the government of don Teodoro Picado.
The past week has also witnessed a virtual working out in Congress of the difficulties which arose in connection with the bill to regulate the tobacco industry in Costa Rica. By a large majority Congress on August 1l voted not to consider the measure sponsored by Deputy RIGIONI (and backed by the Vanguardia) which would have required the turning back to the growers of tobacco eighty five percent of the net profits made by the manufacturers. In its place Congress agreed to consider the bill backed by Deputy PINAUD which merely attempts to tie the price paid to the growers to the selling price of the manufactured product. This measure, according to the manufacturers, will have the effect of raising the cost of production of the manufacturers, but as one of them expressed it, we had to cede something. The bill will come to a vote on August 14, and reliable observers fel that it is assured of passage after agreement is reached on the question of prices.
When called on President Picado Saturday morning he appeared pleased that he had been able to settle these various difficulties without arousing further antagonism to his Government, and he seemed to think that his Administration was slowly gathering popular support. He spoke at some length about his relations with Manuel MORA, and gave as his belief that the latter was sincerely cooperating with him. He added, however, that he was naturally watching Mora carefully, for he always had a mental reservation as to whether Mora was acting for the good of Costa Rica or was merely following orders from abroad. He admitted that he had no evidence to show that anything but the former course was the case, but went on to say that, should he become convinced that Mora was not in fact working for the best interests of the country, he should have no hesitation in openly breaking with him and his party. The Minister of Finance, said the President, had had a disagreement with Mora recently (this allusion was undoubtedly to their difference of opinion on the reorganization of the Oficina de Defensa Económica) but he had had them meet and iron out their difficulties, and now there was complete harmony in the official family.
The President also indicated that he was receiving considerable cooperation from what he termed the respectable element of the opposition, and stated that he had recently met with members of that group, including Marco GONZALEZ and Raúl GURDIAN, to exchange views on important questions.
This statement corroborated reports received by the Embassy in the past few days to the effect that the moderate element of the opposition was actively seeking a rapprochment with Picado. According to these reports a considerable number of the Conservative faction was ready to pledge its support to the President on the condition that they be assured that the Government was not to be dominated by the Communists. This faction, it was stated, feels that the violent tendencies of Acción Demócrata should