The Secretary of State to the Minister in Guatemala (McMillin)

No. 399

Sir: You are requested to seek an early opportunity to discuss with the proper officials of Guatemala the question of disposing of the German properties which are now in the hands of the Government. The Government of the United States will be glad to know what action is contemplated by the Government of Guatemala in regard to these properties.

The Government of the United States was deeply interested in the seizure of these properties by Guatemala during the war, because of its desire to assist Guatemala in any act which might weaken the common enemy of the two republics. At the present time, however, it is no longer felt that the retention of these properties by Guatemala, or their liquidation and sale, is necessary as a war measure. The United States will be pleased to see Guatemala take such action in regard to the properties as would best conserve her own economic interests.

In the event, however, that the Government of Guatemala intends to follow the course announced by the previous administration and to proceed with the sale of these properties, this Government would be glad to enlist the interest of American investors with a view to their acquiring a part or all of the properties in question.

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It should be understood, however, that no steps which may be taken with a view to the final disposition of enemy property can in any way affect the validity of the sale of properties, such as the Empresa Electrica de Guatemala, formerly enemy owned, which may already have been acquired by American citizens.

It is felt that it would be undesirable to continue to insist upon the sale of the former German properties because of the improbability, in view of the prevailing conditions in the investment market in the United States, that American interests would be able to pay for the properties a price in any way commensurate with their real value. The Department feels, therefore, that it would be difficult to justify a continuance of the policy which was necessary and proper during the war but which is no longer essential at the present time.

I am [etc.]

Bainbridge Colby