Memorandum of Conversation, by Mr. Murat W. Williams of the Division of Central America and Panama Affairs

Participants: Col. Oscar Morales López, Military Attaché, Guatemalan Embassy,
Mr. Robert Newbegin, Acting Chief, Division of Central America and Panama Affairs,
Mr. Murat Williams, CPA

Colonel Morales López called at Mr. Newbegin’s request this afternoon. Mr. Newbegin explained that he had heard that Colonel Morales [Page 889] López and other Guatemalan officials were interested in making some changes in the equipment being transferred to Guatemala in final settlement of the lend-lease program. Mr. Newbegin said he wished to point out that any such changes were virtually impossible. The proposal, which the Guatemalan Government had accepted, had previously been approved by President Truman. It had been formulated in an effort to satisfy a just Guatemalan claim. No other way of meeting the U.S. obligation had seemed feasible.

Colonel Morales López said he appreciated this Government’s position. He realized fully that the terms of settlement had been accepted by Guatemala. However, there was a great difficulty in that no storage facilities existed in the country to accommodate the bulky equipment of a base maintenance unit, one of the items included in the allocation. Furthermore, there was great objection in Guatemala to transfer of equipment, of which such a high proportion was for aviation. “That,” said Colonel Morales, “is my fault. I could not go through all of the tables of organizations included in the allocations.” He also realized that the Ambassador had signed the note accepting the agreement for lend-lease settlement and that there was accordingly no basis for a Guatemalan protest. He added that he thought Guatemala was fortunate to have this “money from the skies”.

Mr. Newbegin explained that this Government did not wish to force upon the Guatemalans any equipment that the Guatemalans did not want, and he reiterated our desire to settle the matter at the earliest possible moment. Colonel Morales said he did not suppose this Government would approve of Guatemala accepting matériel and reselling it in this country. Mr. Newbegin replied that he assumed there might be objection to this and that there would undoubtedly be criticism.

Colonel Morales said that he was negotiating with the United Fruit Company for space to send sheds to Guatemala to house the equipment. He was optimistic about obtaining such space on a ship in the near future because of the good relations now existing between the Guatemalan Army and the Fruit Company (as a result of the Army’s assistance in the recent strike at the Fruit Company’s plantations).

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December 31, 1946. Colonel Morales López telephoned Mr. Williams this morning and reported that he had spoken by long distance to the Chief of Staff in Guatemala. He was told that Guatemala would accept all of the equipment allocated, but it would take one or two months to ship it. He asked if that would be agreeable to us. He was informed that the difficulties were appreciated and that it was assumed that there would be no objection.