810.154/3095: Telegram
The Secretary of State to the Ambassador in Guatemala (Long)
512. Your 490, September 23, noon. The Department has given careful consideration to the views which you express and has discussed them at length at conferences with representatives of the War Department and the Public Roads Administration. It has been agreed that the decision of the General Staff precludes completion of the pioneer highway project in Guatemala as originally planned. Work is being stopped throughout Central America by October 31.
The Department has acceded to the War Department’s desire to present its proposal outlined in your telegram30 to the Guatemalan Government. The War Department considers it so advantageous to the latter that it anticipates the proposal’s acceptance. Lieutenant Colonel Zass31 will proceed within the next few days to Guatemala to place this proposal before the Guatemalan authorities. You are requested to give him all possible assistance and to accompany him in any discussions he may have with the President, to whom you may of course fully and frankly explain the situation.
The value of the equipment which would be transferred and construction performed by the Republic would be somewhat less than $1,000,000, in as much as the Army plans to withdraw a certain amount of machinery. The Army and the Public Roads Administration do not believe that the amount which will be left will be excessive for Guatemala’s needs. From Guatemala’s viewpoint the machinery would be acquired very cheaply; from the Army’s, the heavy cost of returning it to the United States would be avoided and shipping space saved.
The Army wishes to stop construction in Guatemala on October 31 even if the Guatemalan Government will not accept the Army’s proposal. In as much as the contract is understood merely to call for construction up to a certain amount ($3,189,250) it would not appear that this would be a breach of contract, the more so as that amount should practically be reached by October 31. The Department has of course insisted that there must be no breach of contract, and that in abandoning construction a complete through highway must be provided even though some sections have not been improved to contemplated standards. You should emphasize these two points to Colonel Zass if any question regarding them arises in the course of discussions.
If the Guatemalan Government accepts the Army’s proposal, there [Page 88] would of course be no disruptive effect to Guatemalan economy, and the work would presumably be continued under Rume.