The Chargé in Guatemala (Hawks) to the Secretary of State

No. 2191

Sir: With reference to the Department’s instruction No. 1124 of November 5, 1928, concerning the case of P. W. Shufeldt, I have the honor to report that, as suggested by the Department, I informed Mr. Shufeldt that as far as the Department is at present advised, the conditions, under which it would be warranted in supporting a diplomatic claim against the Government of Guatemala in this matter, have not yet arisen. In this connection, I have previously told Mr. Shufeldt on various occasions, when he brought up the subject of a diplomatic claim, that the Department would first have to decide whether or not it would support such a claim and also that, in my opinion, technically speaking up to the present time no denial of justice in his case has taken place.

Mr. Shufeldt has been negotiating with the Undersecretary of Agriculture, Mr. Ramirez, who informed him a few days ago that he had been authorized by the President to pay Mr. Shufeldt one hundred thousand dollars and likewise give him a release from Colonel Victor Morales and Mr. Nájera for any claim in this connection, either past, present or future. This morning Mr. Bliss, on behalf of Mr. Shufeldt gave to Mr. Ramirez a draft of a Memorandum, embodying the terms previously verbally agreed upon and which would be signed by both [Page 134] parties to settle this case. This Memorandum states that the Government of Guatemala buys from Mr. Shufeldt all of the rights, which the latter had under his contract to extract chicle, and all of the buildings, roads and other improvements made by him in his zone. For this, the Government agrees to pay one hundred thousand dollars, fifty thousand dollars of which is to be paid in cash and the remaining fifty thousand dollars in four equal installments at thirty days, sixty days, ninety days and one hundred twenty days. The Government will also give Mr. Shufeldt the abovementioned release from Messrs. Morales and Nájera. Mr. Ramirez saw the President this morning and was told that this draft was agreeable to the Government. It is planned to submit this matter to the Cabinet this afternoon for its final approval, which, if given, will, it is hoped, result in the signing of the agreement sometime tomorrow.

The Undersecretary for Foreign Affairs, Mr. Aguilar, informed me this afternoon that, a few days ago, there had been a meeting in the Foreign Office of the legal members of the Cabinet. According to Mr. Aguilar, Dr. Salazar stated, at this meeting, that he felt that Mr. Shufeldt had a claim against the Government of Guatemala and that this matter should be settled. The rest of those present finally agreed with this attitude.

I have [etc.]

Stanley Hawks