Papers relating to the foreign relations of the United States, 1929, Volume III

314.115C43/173

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

Guatemala, October 9, 1929.
[Received October 16.]

No. 2607

Sir: In the matter of the claim of P. W. Shufeldt against the Government of Guatemala, I have the honor to report that Minister for Foreign Affairs Eduardo Aguirre-Velásquez now proposes a formula to be submitted to the arbitrator which, if I can secure a slight but important change, will perhaps be acceptable, but that, on the other hand, he now suggests quite a number of modifications of the mode of procedure.

For a week, beginning about September 28, Dr. Aguirre-Velásquez was reported ill and remained almost constantly at his residence, where, however, he dispatched correspondence.

Under the circumstances, I delayed action on the Department’s cablegram of October 1, 5 p.m., containing a modified draft of the formula, and I so reported by cablegram of October 4, 5 p.m.³³ However, at that time, I decided that it would be best to send him, by personal letter, the modified draft of the formula proposed by the Department. I did so, as shown by the enclosed copy of that letter, dated October 4.³⁴ It appeared to me, as I stated to him, that the formula fits the situation with great precision. Therefore I hoped that he would accept it. It will be observed, that I also mentioned that he had reserved the right to suggest some modifications of detail in the proposed procedure and that I stated that not having heard further from him, I was thinking that he had, upon consideration, come to the conclusion that the proposed text is acceptable.

Having done that, there did not appear to be for the moment, occasion to utilize the modified draft of the formula embodied in the Department’s cablegram of October 5, 1 p.m.

The evening of October 8, I received a note, of that date, a copy of which is enclosed with a translation. It will be observed, that the Minister abandoned some of his previous unacceptable phraseology regarding the formula, but that on the other hand he makes rather extensive changes in the proposed method of procedure. In fact, it would seem, that he added two articles and rewrote seven of the eleven articles proposed by the Department, splitting one of them, and that then he decided to accept the remaining four as submitted.

Desiring to avoid the exchange of additional formal notes on the subject, until the text of the proposed identical notes embodying the agreement had been informally accepted by both parties, and since I did not wish to intrude myself on the Minister with a visit in person while he was at home on account of illness, I had marked my letter of October 4, “Personal” and had stated that I was undertaking to submit a suggestion in that “unofficial fashion”. However, evidently Dr. Aguirre-Velásquez decided that he preferred to answer in an official note. Hence I replied with an official note to his of October 8.

It will be observed from the enclosed copy, that in that reply of mine, also dated October 8, I made a further effort to have the Minister for Foreign Affairs accept the phrase “by which the Assembly disapproved the contract” for the phrase “by which it did not approve the contract”, and that I suggested, in substance, that, since the Chief Justice of British Honduras has, as far as I am informed, not yet agreed to act as arbitrator, Article 1 of the proposed procedure read, (as had been sugggested by the Department) that the arbitrator sit at a place to be agreed upon, instead of providing that (as proposed by Dr. Aguirre-Velásquez) he shall sit at Belize.

At the time of writing this despatch, my note of October 8 has, I believe, already reached the Minister for Foreign Affairs. With it I sent an oral suggestion, that I should be very glad if an answer could be received before the weekly mail closes tonight. If the answer comes later, I shall cable its substance.

Since this is a very busy mail day, I have not had time to study the formula very critically, nor the modifications of the procedure which Dr. Aguirre proposes. However, I respectfully recommend that the Department, if the Minister agrees that the phrase referring to the action of the Assembly shall read “it disapproved the contract”, give serious consideration to the desirability of accepting his proposal as thus modified. In other words, from a hasty reading, I have received the impression, that it may be more desirable for Mr. Shufeldt to accept the proposal if thus modified, rather than to take a chance on further delay. Of course, if it be deemed that further modifications are important, I shall take pleasure in endeavoring to secure them.

I have [etc.]

Arthur H. Geissler

[Enclosure 1—Translation]

The Guatemalan Minister for Foreign Affairs (Aguirre Velásquez) to the American Minister (Geissler)

Guatemala, October 8, 1929.

No. 10564

Mr. Minister: I have received Your Excellency’s communication dated the 4th of October in which you are pleased to present, unofficially, a suggestion with reference to the formula of the question which will be submitted to arbitration in the Shufeldt matter.

Your Excellency is pleased to add, that in view of the suggestions made by this office in note of September 18 [19], 1929, the Department of State is in favor of agreeing, that the matter which is to be submitted to arbitration, be modified in such a way that it shall stand in the following form:

“What sum, if any, is justly due from the Guatemalan Government to the Government of the United States on account of damages sustained by P. W. Shufeldt, a citizen of the United States as a result of the action of the Guatemalan Government in enacting Legislative Decree Number fifteen forty-four of July 4, 1928, declaring ‘disapproved’ a contract of February 4, 1922, celebrated between the Government and Messrs. Francisco Nájera A. and Victor M. Morales I. for the extraction of a minimum of seventy-five thousand quintales of chicle in a defined area over a period of ten years, the rights of the said Nájera and Morales having been ceded by a contract of February 11, 1924 [1922] to the said P. W. Shufeldt”.

Your Excellency adds that this formula seems to fit the situation exactly and you trust that it will merit the approval of this Office. And, as to the procedure, declared acceptable in principle, you are pleased to tell me that not having received word with respect to it, you conclude that the text proposed will be the final form.

It is my pleasure to remind Your Excellency that my Government agreed to submit to the arbitration of the Chief Justice of Belize the pending question of the claim of Mr. Shufeldt, therefore it does not evade the responsibilities which may result, in case the corresponding declaration is made by the arbitrator; but, it does desire that the case under discussion be established in a clear manner, which will not allow room for different interpretations and which is reduced to a comprehensive formula of the different points of view of each party.

For this purpose, I had the honor to propose to the Department of State the formula contained in my note of the 18th of September in which were shown the two principal points of the arbitration, namely:

1. Has Shufeldt a right to indemnification because the Assembly of Guatemala did not approve the chicle contract?

2. In case this right is determined, what is the sum in which it is valued?

Since, from Your Excellency’s communication, it appears that the wording of the two points of the arbitration did not seem to you sufficiently clear, I take the liberty of proposing a new form which, conserving the idea expressed by Your Excellency, is comprehensive of the question, in its two aspects, for the better understanding of the matter; but before doing so, I must state to Your Excellency, that the formula which your esteemed note of the 4th of October proposes, on being translated into the Spanish language, becomes somewhat ambiguous and confused, it remaining as a secondary point and almost preestablished, that Shufeldt has had the right to collect from the Government of Guatemala an indemnification, for legal acts of its constitutional life, it being thus, for my Government, the principal point which it wishes to submit to the decision of the judgment of the arbitrators. Scarcely in a single phrase, “if any”, between two commas, is there left an accidental possibility for considering or discussing the existence of the right which Shufeldt claims, all preference and importance being given to the fixing of the amount or sum to which the indemnification amounts, the point being that the fixing of the sum to be paid shall be a consequence of the arbitrator’s having previously declared that an indemnification is legally due.

It being the intention of both parties, that the formula, which contains the arbitration, be clear and explicit, I am sure that the Government of the United States would desire, as that of Guatemala strongly desires, that its wording will not allow room for doubts or different interpretations, but that in its clarity it will contain that which the arbitrator will have to judge and to solve.

In order to secure that end, I take pleasure in proposing to Your Excellency in order that you may be pleased to submit it to the consideration of the Department of State, the following formula, duly separating the two aspects of the question:—

1. Has P. W. Shufeldt, a citizen of the United States, as cessionary of the rights of Victor M. Morales I, and Francisco Nájera Andrade. the right to claim a pecuniary indemnification for damages and injuries which may have been caused to him by the promulgation of the Legislative Decree of the Assembly of Guatemala No. 1544, by which it did not approve the contract of February 4, 1922, for the extraction of a minimum of 75,000 quintales of chicle, in a defined area in the Department of the Petén, the cession of Nájera Andrade and Morales in favor of Shufeldt having been made by contract of February 11, 1924 [1922]?

2. In case the arbitrator declare that Shufeldt does have the right to having an indemnification paid to him by the Government of Guatemala, what sum should the Government of Guatemala in justice pay to the Government of the United States for the account of Shufeldt?

I believe that Your Excellency will find sufficiently explicit and comprehensive the formula of the arbitration which I take the liberty of proposing to you and that it will satisfy the desire for justice which both Governments look for in the arbitral judgment which it is proposed to establish.

As to the method, I am pleased to suggest to Your Excellency a few modifications, for its better clarification and understanding, they being in the following form:

1. The Tribunal shall sit at Belize, residence of the arbitrator.

2. Each Government shall appoint a representative who shall have the authority necessary to appear before the arbitrator and to represent his Government.

3. The first day of January 1930 is fixed as the day on which the representatives of the parties shall meet at Belize and appear before the arbitrator, presenting their credentials. If they be in good and due form, the arbitrator shall declare the proceedings open.

4. The representatives of the parties shall present before the arbitrator a statement of allegations which shall comprise their respective points of view in the relation of the facts, the statements of the juridic points upon which their cause is based and all the proofs which they may wish to present as basis for their claims. They may be set forth in English or in Spanish. The term, within which the statement of their cause must be presented by the parties, is that of thirty days counted from the time when the arbitrator declares the proceedings open.

5. Each party shall deliver to the other party a textual copy of its statements, allegations and proofs.

6. Within sixty days counted from the day on which the last of the parties presented the statement of its cause, in conformity with Article 4, each party shall have the right to present a reply to the allegations of the other party. A copy of that reply shall be delivered to the other at the time of being presented to the arbitrator.

7. Within thirty days following the termination of the sixty days’ period mentioned in Article 6, the parties may make oral or written allegations before the arbitrator, summarizing the proofs and the arguments produced in the allegations.

8. Each Government shall have the right to exhibit all documents pertaining to the subject matter of the arbitration, and the original documents or copies certified by a notary or public officials, whatever may be their character.

9. The arbitrator shall have authority to establish such rules of procedure as he may deem opportune and conducive to the success of the arbitral proceedings, always provided that they do not contradict the bases laid down in the protocol of arbitration.

10. The tribunal shall keep a record of its proceedings. The two Governments shall assign to the Tribunal such amanuenses, interpreters and employees as may be necessary. The Tribunal is authorized to administer oaths to witnesses and to take evidence on oath.

11. The decision of the Tribunal shall be given within a period of sixty days following the termination of the thirty days’ period mentioned in Article 7. The decision, when made, shall be forthwith communicated to the Governments at Guatemala and Washington. It shall be accepted as final and binding upon the two Governments.

12. Each Government shall pay its own expenses and one-half of the common expenses of the arbitration.

13. The amount granted by the award, if any, shall be payable in gold coin of the United States at the Department of State, Washington, within one year after the rendition of the decision by the tribunal, with interest at six per centum per annum, beginning to run one month after the rendition of the decision.

14. The honorarium and emoluments of the arbitrator shall be as agreed upon in previous correspondence.

I take [etc.]

Ed. Aguirre V.

[Enclosure 2]

The American Minister (Geissler) to the Guatemalan Minister for Foreign Affairs (Aguirre Velásquez)

Guatemala, October 8, 1929.

No. 85

Mr. Minister: In reading the note of Your Excellency bearing number 10564, of this date, just received, regarding the matter of the claim of Mr. P. W. Shufeldt, I notice that in the formula which you propose for the, arbitration of the dispute, you use, after referring to the “Legislative Decree of the Assembly of Guatemala No. 1544”, the words:—”por el cual no aprobó el contrato” (“by which it did not approve the contract”).

In view of the fact that, as shown by El Guatemalteco of July 23, 1928, Decree No. 1544 reads, in part, as follows:—”Artículo único.—Se desaprueba el contrato”, it occurs to me, that you may be willing to inform me, before I submit to the Department of State your proposal of October 8, that you agree that the phrase under consideration shall in the proposed arbitration agreement read “por el cual desaprobó el contrato” (“by which it disapproved the contract”) instead of “por el cual no aprobó el contrato”.

The Department of State will doubtless have no objection to having the arbitrator sit at Belize, if the Chief Justice of British Honduras acts as arbitrator. However, so far as I am informed, he has not yet accepted. Hence it may conceivably become necessary to agree on another arbitrator. That person may possibly be one residing in some other country. Therefore I suggest that it be agreed that the article of the proposed procedure which bears Number One read as follows:—

“The arbitrator shall sit at a place to be agreed upon by the two Governments”.

The other changes you propose I shall submit to the Department of State for its consideration.

I avail myself [etc]

Arthur H. Geissler

33. Latter not printed.
34. Not printed.