814.796 Latin American Airways/23

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

No. 2535

Sir: I have the honor to report, that the Compañía de Transportes Aéreos Latino Americana inaugurated, under its temporary contract with the Government of Guatemala, mentioned in despatch 2443 of June 11, 1929, a twice-a-week air mail and passenger service with a plane which left the city of Guatemala this morning, August 7, for the city of Mexico, and in that connection I beg leave to relate some statements made to me, on August 6, by the President of the Company, Captain Daniel E. Ellis, regarding its pending merger with the Pickwick Airways Incorporated of Los Angeles, California.

Mr. Ellis came to the Legation, accompanied by Mr. Carlos Irigoyen, [Page 651] local representative of the Company, and said that Mr. Lee C. Balch, who had negotiated the contract with the Guatemalan Government, would probably be here again in a few days, and had asked him to call meanwhile, to reiterate appreciation of assistance given by the Legation and to give information regarding the present status of their Company.

Mr. Ellis stated, that they had had much trouble because of some actions of one of the organizers of the Compañía Latino Americana and of the Latin American Airways of Delaware … that … was eliminated, and that thereupon the stockholders had entered into a contract with the Pickwick Airways, in which concern the Southern Pacific Railway is understood to be interested, under which contract, by about October 15, would be organized an American corporation, with a capital stock of $3,000,000.00, half of which stock is to go to each of those two groups, it being agreed that meanwhile the Pickwick Airways will furnish the material and money for the inauguration of the air service between Los Angeles and the city of Guatemala. He said, that the new concern, in process of incorporation, owns all of the stock of the Latino Americana, which has the air transport contracts in Mexico and Guatemala. He remarked, that under the laws of Mexico, operations in that Republic must be by a Mexican corporation, and that therefore it might be more convenient to have the Mexican corporation operate also between Tia Juana and Los Angeles and between the southern frontier of Mexico and the city of Guatemala and possibly in Salvador and Honduras. He asked whether I would have objection to that. I replied, that it is not for me to pass on that question. Then he said, that he would like to have my advice. I answered, that I should say to him what I had stated, on previous occasions, to Mr. Balch and also to a representative of the Pan American Airways, namely that I prefer not to advise regarding that point. Then I related to him, that, in May, Mr. Balch had quite voluntarily informed me that he believed it would be better for his syndicate to transfer the contract with the Government of Guatemala, when obtained, to an American corporation for operation and that this would be done. I added, that if now Mr. Balch and his associates have decided or decide on a different course, it would be interesting information. He then stated, that no decision had been reached and that Mr. Balch would be in Guatemala in a very few days, to look after legal matters and the like; the branch of the business under his own charge being that of operations.

I believe, that Mr. Balch will carry out the written statement he made to me. See enclosure 299 with despatch 2403 of May 15, 1929, [Page 652] and also despatch 2443 of June 11, 1929. Whether he does or does not, it seems now possible that, sooner or later, the Pan American group will decide that it prefers to operate in Guatemala under an American charter. Please, see in this connection despatch 2530 of August 3, 1929.1

I enclose a copy of a report made, under date of August 7, 1929, by Commercial Attaché Bohan to the Department of Commerce,1 on the subject of the establishment of the “Latin American Airways” service, which report includes, beside other pertinent details, the flying schedule.

I have [etc.]

Arthur H. Geissler
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