814.51/586

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

No. 1497

Sir: I have the honor to submit the following report relative to recent developments with regard to negotiations between the International Railways of Central America and the Government of Guatemala concerning a settlement of the debt due the company, and in which matter the Legation has been using good offices.

On May 9, I told Secretary for Foreign Affairs Matos, in harmony with the Department’s cablegram 25 of May 7, 6 p.m., that the Department would be much pleased, if this matter were to reach a final settlement, satisfactory to both parties, and if the agreement were approved by the Assembly at its present session. I preferred, not to speak to President Chacón concerning this at the time, so as to avoid a feeling on the part of the Secretary of the Treasury that I am, over his head, bringing undue pressure to bear on the President. If, later on, there appears to be occasion for me to take the matter up directly with General Chacón, I shall, of course, do so. However, at present, the matter seems to be moving along nicely.

On May 10, Dr. Matos, having previously spoken to the President, told at a meeting of the Cabinet, what I had said to him. The Secretary for Foreign Affairs informed me the next day, that the President, the Secretary of the Treasury and the other members of the Cabinet had indicated their entire readiness to expedite negotiations, as soon as Mr. H. B. Price, Vice President of the company, returns from New York.

Mr. Price arrived on the evening of May 12. On the 13th he called at the Legation and then went to pay the President a courtesy visit. Later he reported to me, that he had talked with General Chacón only a few minutes, but that the President had said to him, that he hoped, that the negotiations to be resumed by him with the Secretary of the Treasury would lead to an agreement, in time for the same to be ratified by the Assembly, before it adjourns. Mr. Price then proceeded to take the matter up with Mr. Palma.

Reference is made to despatch 1491 of May 11, in which I reported, that the British Minister and the representative of the Council of [Page 40] Foreign Bondholders have, in response to argument presented to them by me, come to the conclusion, that, contrary to their previous position, it is desirable for both the coupon holders and the railway company to each have their matter settled at an early date, regardless of which of the two is adjusted first.

Mr. Price expressed himself as gratified at all the Legation had done, while he was away, with a view to facilitating an early settlement.

I have [etc.]

Arthur H. Geissler