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

No. 247

Sir: I have the honor to refer to the Department’s instruction No. 9 of January 4, 1934, and the Legation’s despatch No. 52 of January 16, 1934, with reference to the opening of conversations with the Government of Guatemala, having in mind the possible conclusion of a commercial treaty, as well as the Legation’s despatch No. 232 of June 27, 1934,2 in connection with the imposition of a German quota on imports of Guatemalan coffee.

I have just been informed by Licenciado Skinner Klee, Guatemalan Foreign Minister, that in addition to the concern which the Government is feeling with regard to the threatened imposition of a German quota it has just been learned that France has placed a quota on banana imports and has fixed the amount at approximately five thousand tons for the last half of the present calendar year. This amount is about one ship load for the larger vessels of the United Fruit Company. Further, since the restriction provides that the entire quota may be taken at any one time, Dr. Skinner Klee felt that the shipment would in all probability be made from Santa Marta in Colombia and this would mean no further banana sales for Guatemala to France. However, since such exports have previously been slight and the greater part of the income therefrom derives to the United Fruit Company, it would appear that the Foreign Minister is needlessly worried.

The developments reported by Dr. Skinner Klee have increased the desire of his Government to negotiate a trade arrangement with the United States which would open up a broader market for Guatemalan products, especially for a larger percentage of Guatemalan coffee which has heretofore been shipped to Germany. In a number of conversations which I have had recently with the Minister for Foreign Affairs he has manifested his interest as well as his anxiety in this connection. He appears to be a strong advocate for the increase [Page 283] of trade between Guatemala and the United States even to the extent of making the latter the exclusive market for Guatemalan sales. Should this eventuate he advocates greatly increased imports from the United States to the extent of making us the sole source of supply for such products as we are able to furnish.

Dr. Skinner Klee brought up the subject again only this morning, when I called upon him in connection with another matter, and told me that he proposed to request formal authority of President Ubico to enter into negotiations for a trade agreement with the United States which might accomplish what he has in mind. It was not indicated, however, whether, in preliminary conversation with regard thereto, the Guatemalan Government would endeavor to insist upon a preferential rate on sugar exports, as was indicated in the Legation’s despatch first mentioned.

Respectfully yours,

Matthew E. Hanna
  1. Not printed.