740.00112A European War, 1939/36610: Airgram
The Ambassador in Guatemala (Long) to the Secretary of State
[Received May 18—1 p.m.]
A–240. Reference Department’s telegram No. 268, May 12, 5 p.m. and previous correspondence regarding the disposal of coffee produced on Proclaimed List fincas in Guatemala.
I continue to hold the opinion expressed in my Despatch No. 1037, April 18, 1944, that for the reasons stated therein it is not desirable to urge on the Guatemalan Government immediate implementation of an expropriation program. While the Department differentiates between a general expropriation program and a limited one, involving only the most objectionable Axis spearheads such as Nottebohm, it should be borne in mind that the Nottebohm properties constitute a substantial proportion of the value of Proclaimed List coffee.56
While the political situation in Guatemala has not to my knowledge been affected by recent developments in El Salvador,57 it has [Page 1159] been suggested that the President might be extremely reluctant at this time to take any measures which might even remotely be open to charges of unconstitutionality, a factor which we understand loomed large in the Salvadoran situation.
It should also be recalled that the Guatemalan Constitution requires compensation for expropriation. While we would obviously not wish to see any German interests receive compensation for their properties, even though paid into blocked accounts, the Government might fear the effect on public opinion if it should defer compensation until after the war.
Nevertheless, in view of the Department’s insistence in the matter, I am of course prepared to proceed with any desirable course to accomplish the end in view. I do not believe, however, that we should expose ourselves to any possible charge of using coersive methods by linking the Army’s willingness or unwillingness to buy this coffee with our objectives regarding expropriation.
Assuming that there is no possibility that the Army will be compelled to reverse its position by developments in the coffee supply situation, I therefore recommend that we take no action for the time being. At such time as the Guatemalan Embassy in Washington approaches the Department, or Guatemalan officials take up the matter with the Embassy, I believe that we should state informally that in as much as there is an adequate supply from Guatemala and other countries of coffee owned by other than enemy interests, logically the enemy-owned coffee controlled by the Banco Central would be the last to be purchased by our Army. As time passes, pressure for the disposal of this coffee will naturally increase and we should have frequent opportunities to express our views, in the course of which it should become obvious to the Guatemalan Government that expropriation is the solution, even though it be only on a token basis for the time being. While such a course might be characterized as exercising “pressure tactics”, it seems to me to be a less blunt and possibly more effective means of attaining our ends.
If such a policy is to be successful, it would of course require full support of our Army authorities in standing firm on their commitment to the Department, as well as the pursuit of an identical course in conversations between the Department and the Guatemalan Embassy and this Embassy and Guatemalan officials here.
In view of the modified procedure which I have taken the liberty of suggesting in this communication, I shall take no action in the matter until I receive further instructions from the Department.
- According to a Division of World Trade Intelligence report of August 8, 1944 (740.00112A European War 1939/7–2844), the German-owned coffee properties, including the Central American Plantations Corporation properties already acquired by the Guatemalan Government, represented about one-third of the coffee plantations in Guatemala.↩
- Concerning the political situation in Guatemala, see pp. 1132 ff.; in El Salvador, pp. 1087 ff.↩