810.154/3095: Telegram
The Ambassador in Guatemala ( Long ) to the Secretary of State
[Received 8:18 p.m.]
490. For immediate consideration Duggan,19 Bonsal, Cabot. Reference Department’s circular telegram of September 14, 7 p.m. It is urgently requested that Department bring up the following considerations regarding liquidation of Pioneer Highway at the conference which is understood will be held September 24.
Last Monday Colonel Kelton tentatively proposed to Colonel Bickford,20 head of Rume, special agency set up by Guatemala for the construction of the road, that we turn over to it all equipment, machinery and material now in the country for which Guatemala would agree to spend an amount equivalent to the value thereof estimated at about $1,000,000 for the completion of the route from Escuintla to Ayutla. Bickford does not desire to submit this proposal to the President21 until it is a “firm offer”. If accepted he fears that the job will be turned over to the regular Guatemala road organization which would probably take years to finish it. In any event I believe that Guatemala has no need for such a tremendous amount of machinery even though it would be a bargain at that price under present shortage conditions.
Bickford tentative[ly] proposes as an alternative that we carry out our contract with the Rume under which we are committed to an expenditure of about one and a quarter million by the end of April 1944. I am confident that by practicing rigid economy he can do the job by about that time and that the work will be performed honestly and efficiently with little or no supervision by us.
Rume now employs approximately 60,500 men. If work on the road is suspended abruptly, many of the common laborers could be absorbed in other fields of employment but there would be a large number of skilled and semi-skilled workers such as chauffeurs and mechanics (formerly employed on his [bus?] lines closed down due [Page 83] to war shortages) who would be thrown out of employment and it is feared would create a serious political problem for the Government. If Bickford can continue construction for the period indicated, he can gradually cut down on his payroll with a minimum of disturbance to the national economy.
The advantage of such a plan would be that we would thus comply with our signed contract with the Guatemalan Government and would avoid the charge of bad faith which would undoubtedly be made by our critics and enemies. Such action would furnish Axis sympathizers with propaganda material against us which could undo our efforts to promote better relations and closer understanding over the past decade and might seriously jeopardize the continuance of Guatemala’s wholehearted participation within the limits of its resources in our common war effort.
The Department should bear in mind that this is the only one of the five Central American Governments with which we have a direct construction contract and that our situation here consequently is not comparable to that in the remaining countries and any over-all plan for liquidation should take this into consideration. The proposal to have Rume under Bickford complete construction within the limit of time and funds set forth above would probably be no more expensive than Kelton’s plan, would not create a drain on American manpower and would obviate most or all of the unfavorable features attendant on any other alternative. There would be the advantage that at the end of construction, we would have available for use elsewhere a large amount of critical machinery and equipment.
Please cable me promptly the decision taken as the Government will inevitably learn through other channels of the proposed liquidation and I fear serious repercussions. I should also be authorized at as early a date as possible to discuss the situation fully and frankly with the President.