File No. 714.1515/12

Minister Ewing to the Secretary of State

No. 416

Sir: I have the honor to report a difficulty between the Cuyamel Fruit Company, operating in northwestern Honduras, and officials of the Guatemalan Republic which may reach a serious stage unless promptly adjusted.

The Cuyamel Fruit Company is an American concern, being the property of Messrs. Hubbard and Zemurray, and engages in the growing and export of bananas for the United States markets. While its holdings are principally in northwestern Honduras and most of its shipments are made from the port of Omoa, the company has also been accepting fruit from planters along the National Railroad, thus providing that section of Honduras with a sorely needed market for fruit.

Some time ago the Cuyamel Company decided to extend their railroad to the Motagua River. As the Department is probably aware, there is a dispute between Guatemala and Honduras over the boundary between the two Republics, Honduras claiming territory north of the Motagua River, while, according to my understanding of the contention, Guatemala claims that the river itself is the boundary between the two Republics. In the present instance, Guatemalan officials are attempting to interfere with construction of a railroad several miles south of the Motagua River.

My attention was called to the matter by Mr. Zemurray of the Cuyamel Company, who had also conferred with the Honduran Government over the matter. President Bertrand is reported to be greatly wrought up over the matter and has instructed that soldiers be sent to this section with orders to fire upon any Guatemalan forces who may attempt to interfere with the work under way.

Mr. Zemurray is under the impression that a treaty celebrated between Honduras and Guatemala in 1915 provides that in the disputed territory between the two Republics each shall respect concessions granted by the other and that after final settlement is made all concessionaires shall acknowledge the authority of the government awarded the territory and shall enjoy the privileges granted, no matter from which government they received their original concession. As this dispatch is being written a half hour before the closing of the mail pouch there is no time to investigate this treaty and its bearing on the present case.

More and more it is becoming apparent that these unsettled boundary disputes constitute a grave danger to the peace of these Republics and it is earnestly to be hoped that a final and amicable settlement of them can be made in the near future.

I have [etc.]

Jno. Ewing