814.51/291: Telegram

The Chargé in Guatemala (Thurston) to the Acting Secretary of State

My May 12th, 1 p.m.8 The Minister of Fomento presided over the meeting of bankers yesterday. It apparently is President Cabrera’s intention to issue the 60,000,000 pesos, notwithstanding his contrary assurances to me. However, in view of the opposition by several of the banks yesterday the decree may be amended, thus delaying issuance of this money, although it is authoritatively stated that a reserve of 46,000,000 pesos now in the local customhouse and belonging to the various banks of issue may be immediately released.

At this meeting Senor Juan Lara, the manager of the semi-governmental Banco de Occidente is said to have made the following statement: “The President has always helped us. Now we must help him, for they are trying to force him to extend a foreign loan.”

See my despatch number 763,8 paragraph 3, and my despatch number 767,8 paragraph 3. The opinion is unanimous among bankers here that a foreign loan is not desired by President Cabrera because he fears his present absolute control over financial affairs would be much weakened. On the other hand he is constantly encouraging his agents to have loan propositions submitted to him, five of such propositions being known to me apart from his request for a loan presented to the Department in September, 1917.

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