611.1431/114
The Minister in Guatemala (Hanna) to the Secretary of State
[Received June 10.]
Sir: Confirming my telegrams No. 28, June 3, 5 p.m., and No. 29, June 4, 1 [3] p.m., I have the honor to report that I have orally presented to President Ubico, the Minister for Foreign Affairs, the Minister of Hacienda, and the Collector General of Customs the considerations concerning the proposed trade agreement set forth in the Department’s air mail instruction No. 198 of May 21, 1935.
I presented the subject in detail and with sufficient repetition of the principal points to insure their being thoroughly understood. The attitude of all those with whom I talked was most attentive and, although none of them made any specific commitment as to details, all assured me that they were in sympathy with the broad purpose of the trade agreements program in its relation to world trade, and they seemed to realize the advantages Guatemala might be expected to obtain from the success of the program. I had previously been able to bring this fundamental phase of the matter to the attention of the Minister for Foreign Affairs, and through him to the attention of the President and the Minister of Hacienda, by furnishing him with copies of Secretary Hull’s speeches and other public statements, as well as those of other officials of the Department. All four of the gentlemen expressed their desire to continue to cooperate and their hope that a way could be found to conciliate the respective points of view, so that Guatemala might give its moral support to the program in the form of a satisfactory trade agreement.
They all mentioned more or less directly the impracticability of reducing Guatemala’s customs revenues at this critical time, especially as Guatemala is suffering because of a restricted and cheaper market for her coffee, and the possibility that increased imports would compensate for reductions in duties aroused no enthusiasm among them.
They were very attentive to, and appeared to be favorably impressed by the indirect advantages which they might obtain from the success of the program in the opening up of markets now closed or obstructed for Guatemalan products, and they seemed to appreciate the danger that this situation might become worse if the present tendency in world trade should continue. They were specially impressed when I referred to what the possible effect on Guatemala’s trade and entire national economy might be if the United States, in self defense, should be compelled to follow the prevailing tendency and set up arbitrary barriers to world trade.
[Page 596]I gave them all an opportunity to indicate some concession they might desire by way of a compensating benefit but the only suggestion made related to some measure which would close the American market to contraband chicle from Guatemala. When President Ubico referred to this, I recalled the efforts which have already been made in this connection and told him that a definite suggestion from this Government as to how the Government of the United States might cooperate in controlling this contraband traffic would receive sympathetic consideration. The truth as to this phase of the matter is that, in the absence of any possibility of our directly offering Guatemala a better market for her coffee, the officials of this Government can hit upon nothing to ask of us in the way of compensating concessions. This appears to constitute about the only real difficulty confronting the negotiations, but it probably will be a serious one so long as the concessions requested by us threaten to reduce this country’s customs receipts by any considerable amount in proportion to the country’s total revenues.
Respectfully yours,