The Ambassador in Guatemala (Long) to the Secretary of State

No. 1016

Sir: I have the honor to refer to the Embassy’s Despatch No. 847 of February 11, 1944, in which the possibility was suggested that an arrangement might be worked out with the Guatemalan Government for the conclusion of a Cooperative Agreement under the terms of Public 375 to provide for the contribution by the Guatemalan Government of the rental value of machinery and equipment obtained from our War Department, as its one-third share of such projects as might be agreed on. The Department’s Instruction No. 424 of March 2, 1944,14 authorized the Embassy to discuss this proposal with the Guatemalan authorities.

In view of the approaching visit of General Fleming of the Federal Works Agency15 and Messrs. MacDonald and James of the Public Roads Administration,16 I considered it desirable to defer discussion of this subject with the Guatemalan Government until I had an opportunity of going over the matter with the American officials named.

General Fleming and his party called at the Embassy on April 5, at which time highway matters and this problem were discussed. In the course of our conversation it occurred to us that before making such a proposal to the Guatemalan Government, it would be desirable to inquire carefully into the legality of accepting as the Guatemalan contribution the rental value on the equipment and machinery turned over to it by the United States War Department under the Agreement of September 28, 1943.

[Page 193]

In the hypothetical case that the Guatemalan Government should decide to suspend construction of the CIPA and withdraw the equipment and machinery for use on other projects, our War Department would presumably be in a position to cancel the Agreement of September 28, and insist on the return to it of the equipment. While it is true that this equipment was not turned over to Guatemala as an outright gift, in view of the fact that it undertook to make expenditures equal to the value thereof, some question exists regarding the actual moment at which Guatemala will acquire definitive title to the equipment.

In view of the question which has arisen in this regard, it occurs to me that either the Department or the Public Roads Administration might wish to submit the question to the Comptroller General for an opinion before I discuss the matter with the Guatemalan Government.

Pending further instructions in the premises, no action will be taken by the Embassy.

Respectfully yours,

Boaz Long
  1. Not printed.
  2. Maj. Gen. Philip B. Fleming, Administrator, FWA.
  3. Thomas H. MacDonald, Commissioner, and Edward W. James, Chief, Inter-American Regional Office, PRA.