814.002/12–1846

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

confidential
No. 2035

Sir: [Here follows report on statement made by the Guatemalan Minister for Foreign Affairs (Silva Peña) on December 17 concerning anticipated Cabinet changes.]

[Page 894]

The Foreign Minister then referred to the recent no-strike order23 issued by the Ministers of National Economy and Gobernación, and said that the statement was directly due to a conversation which he had with the President after his return from the United Nations Meeting at New York. Silva Peña said that he argued at some length with the President with regard to the impression being created abroad of chaotic conditions in Guatemala, the growing uncertainty with regard to foreign investments, the number of illegal strikes and the increasing feeling among outsiders that Guatemala is dominated by communistic labor leaders. He said that in order to prepare the President’s mind and further to convince him, he had requested that Ambassador Garcia Granados prepare an exposition of the feeling that he had gathered from conversations with officials of the State Department and notably in his conversation with Assistant Secretary of State Spruille Braden, regarding the difficulties of the IRCA and the question of the revision of contracts with the large foreign companies. He said that the President had been impressed by his arguments and had thereupon telephoned to the Minister of Gobernación, asking that a statement be prepared and made public concerning the Government’s position with regard to illegal strikes.…

Licenciado Silva Peña said that one of the points which he had emphasized in his conversation with the President, was the inadvisability of allowing Congress to proceed with any investigation of the contracts held by the leading American companies in this country, since such unilateral action, looking towards their revision could not be but viewed with disquiet abroad. He said that he had spoken with several Congressional leaders and that they have agreed not to continue with the investigation of these contracts. He asked my opinion with regard to the matter, and I said that I had always heard from the managers of the several companies concerned, expressions of willingness to enter into discussions with regard to a voluntary re-negotiation provided such re-negotiation meant a settlement of their troubles and was not simply the beginning of further demands on the part of the Government and the Congress. Licenciado Silva Peña said that he wished first to discuss the matter in a Cabinet meeting and would [Page 895]then again discuss the question with me to see whether it would be desirable to initiate conversations with the local managers of the several companies or whether instructions should be issued to the Guatemalan Ambassador in Washington to undertake discussions with the head offices of these interests. I said that I felt that while I believed that such discussions might be productive of gratifying results, it would be necessary first to remove any appearance of coercion because of pending action in Congress. The Foreign Minister said that he felt that the question of the contracts in Congress was now more or less settled and that sometime early in the new year it might be desirable to undertake conversations in an entirely informal manner to ascertain the views of the officials of the companies concerned. He said that he had told the President that a mutual re-negotiation of the contracts in a friendly spirit would be beneficial to Guatemala and to the feeling abroad with regard to this country, while the other course of unilateral action on the part of Congress was politically inexpedient as well as illegal. He said that he did not agree that such subterfuges should be engaged in, such as claiming the contracts were illegal under one or another of the constitutions, but that the renegotiation should be on the basis of a frank and friendly discussion.

Respectfully yours,

Andrew E. Donovan ii
  1. Despatch 2019, December 11, 1946, from Guatemala, indicated that workers in Guatemala were not to be allowed to go on strike until Congress completed action on the new labor code and put it into effect, probably in March 1947 when the regular session of Congress was to convene. The prohibition on strikes was set forth in a public statement on December 10 by the Ministries of Economy and Labor and of Government which indicated that strikes and stoppages were forbidden by laws already in force. (814.5045/12–1146)

    Despatch 2059, December 27, 1946, from Guatemala, indicated that peace between the International Railways of Central America (IRCA) and the Guatemalan Railways Workers Union (SAMF) was temporarily achieved with the signing of an agreement on December 21, 1946, that neither would “create new conflicts until the issuance of the labor code.” (814.5045/12–2746)