740.00112A European War, 1939/29365

The Minister in Guatemala ( Des Partes ) to the Secretary of State

No. 3829

Sir: In continuation of my telegram No. 187 of April 20, 1 pm, 1943,18 I have the honor to enclose copy and translation of Guatemalan Foreign Office Note No. 5298 of April 15,18 with regard to the disposition of coffee produced on Proclaimed List plantations.

The principal emphasis in the Guatemalan note is on the Government’s desire to obtain a solution of the problem of the disposition of Proclaimed List coffee and only incidentally gives assurances regarding the participation of the owners in the profits derived from the sale of such coffee. In addition, as pointed out in my telegram, the Government indicates that it would be disposed to increase the present “war tax” on Proclaimed List coffee in the event that higher prices should be obtained this year. The note omits any reference to the Guatemalan Government’s intentions with respect to expropriation or vesting of Proclaimed List properties.

In a conversation with the President yesterday he stated that the Guatemalan Government could not constitutionally proceed to expropriation of Proclaimed List properties at the present time but at the Peace Conference his Government would present to the Axis Powers a bill for claims arising from the War which would be in excess [Page 356] of the value of the Proclaimed List properties. He added that the properties would then be expropriated and that the owners would have to look to the German Government for payment. This present attitude of the President is considered to be less satisfactory than the position previously taken by the Foreign Minister who had indicated that the Government was prepared to proceed promptly with expropriation. The reason for this change in attitude is not known.

The statement of the Guatemalan Foreign Office to the effect that the owners of Proclaimed List properties are receiving minimum benefits from the sale of coffee is borne out by the data which were transmitted to the Department with the Legation’s despatch No. 3774 of April 8.21 In the event that the Department decides to authorize the importation into the United States of Proclaimed List coffee it is believed that the size of the profits accruing to the owners will be at least as small as for the previous crop year. If the profits are larger than considered desirable it is believed that the Government of Guatemala would be prepared to carry out its suggestion of imposing an increased “war tax” on the sale of Proclaimed List coffee. In fact it is currently rumored that the “war tax” will be increased within the next few days from the present rate of $4.00 to $5.00 per quintal.

While the failure of the Guatemalan Government to proceed with expropriation of Proclaimed List properties is a source of disappointment it is not believed that it would be possible at this time to obtain any more satisfactory assurances than contained in the enclosed note and I recommend that I be authorized to inform the Guatemalan Government that sales of the current Proclaimed List coffee crop will be permitted.

[Respectfully yours,

Fat Allen Des Portes
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