The Chargé in Guatemala (Woodward) to the Secretary of State

No. 394

Sir: I have the honor to refer to the Department’s air mail Instruction No. 36 of July 2, 1945, transmitting a draft note for presentation to the Guatemalan Government, in the discretion of this Embassy, expressing the concern of our Government that no effective action has been taken by the Guatemalan Government to give just compensation to the American owners of the Aerovías air line which the Guatemalan Government has expropriated.

The Department’s Instruction No. 36 and the draft note have been utilized, so far, by this Embassy for two discussions of this subject with the Guatemalan Minister of Foreign Relations, Licenciado Guillermo Toriello. The Embassy has as yet not formally presented the note, for the following reasons:

As reported in this Embassy’s Despatch No. 224 of June 21, 1945,13 [Page 1088] entitled “Liquidation of the Expropriated Commercial Aviation Company—Aerovías de Guatemala, S.A.”, Pan American Airways has been in active negotiation with the Guatemalan authorities for an adequate liquidation of its shares in Aerovías. The Manager of Pan American Airways in Guatemala14 is optimistic that a satisfactory settlement can soon be made. It has been pointed out to the Manager carefully by this Embassy that any settlement made by Pan American Airways is likely to be considered as a precedent.
The present Guatemalan authorities are inclined to be so resentful of any official representation on behalf of Alfred Denby, or on behalf of any former property of Denby’s, that it seems that the interests of the American owners of Aerovías may best be served for the time being by informal representations, at the most.
When this matter was discussed with the Foreign Minister on July 12, he said that he thought he would have a definite reply on July 17, indicating that arrangements would have been made by the Guatemalan Government to liquidate the shares of Aerovías at an acceptable rate. When no reply was forthcoming on July 17, the matter was again discussed in complete detail concerning the views expressed in the Department’s Instruction No. 36. He said he would be away on a trip to Lima, Peru for about six days, but that he thought the liquidation would be effected and the amounts of compensation deposited in the various accounts (Denby’s presumably, in his frozen account) within a very short time.15

Respectfully yours,

For the Chargé d’Affaires, a.i.
Archibald R. Randolph

Acting Commercial Attaché
  1. Not printed.
  2. J. H. Wilson.
  3. On September 17, the Guatemalan Minister of Finance, Jorge Toriello, offered the owners of Aerovías $212.47 per share of stock (814.796/9–2245). On October 9, in a note to the Secretary of State, not printed, the Guatemalan Ambassador to the United States, Jorgé Garcia Granados, informed the Department that his Government had deposited the sum of 120,045.55 quetzales to the blocked account of Alfred Denby, in compensation for his 565 shares of stock (414.11–Denby, Alfred E./10–945).