561.333D3/30: Telegram

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

65. The President today called me in to discuss the resolutions adopted by the Third Pan-American Coffee Conference, particularly resolution 7. He made the following statements to me:

The quota of 500,000 bags proposed for Guatemala is utterly unjust. Guatemala regularly produces and sells more than El Salvador and more in proportion than the quota given, in comparison with those of Brazil, Colombia and Mexico. … Guatemala under no circumstances will accept the quota allotted and the Guatemalan delegate has been instructed to withdraw from the Conference.
Guatemala has never become a member of the Pan-American Coffee Office and paid the propaganda quota because it has always been able to sell its entire crop without paying for propaganda. It will not join the Office now. It will accept a quota only if some price guarantee is attached thereto, the more so as any reduction in exports will result in losses to the Government under the coffee export tax.
Guatemala has never had any coffee surplus. It can continue to sell its entire crop unless prevented by artificial restrictions and [Page 392] is therefore not interested in discussing the disposal of surpluses at Habana. Moreover, it considers that such discussion would probably result in bickerings which would endanger the other work of the meeting.

The President was particularly concerned over the strong recommendation reportedly made by Messrs. Welles and Duggan8 that this plan be accepted forthwith. He said that the mere publication of the plan locally would result in driving this country commercially into the hands of Germany as soon as commercial relations with Germany can be resumed.

A hasty study indicates that several of the President’s points are not valid. However, under the circumstances I should, appreciate full instructions regarding the Department’s views in order that I may place them before the President.

  1. Laurence Duggan, Chief of the Division of the American Republics.