Memorandum by the Director of the Office of American Republic Affairs ( Briggs ) to the Under Secretary of State for Economic Affairs ( Clayton )


Shipments of supplies to Guatemala in settlement of our lend-lease obligation have been suspended, by order of the General Accounting Office.2 The failure to make these deliveries leaves us owing Guatemala about $1,000,000 in materials under our Lend-Lease Agreement of 1942.3 It is important that shipments be resumed and the obligation liquidated.

It will be recalled that this secret Lend-Lease Agreement provided that Guatemala should receive without charge $3,000,000 worth of Lend-Lease supplies in return for letting us occupy two air bases in that country. When hostilities ended, we had shipped only about $1,500,000 of lend-lease supplies to Guatemala. It was then proposed that our remaining obligation be liquidated by transferring to Guatemala all the materials included in her interim arms allocation. After President Truman approved this proposal4 (see attachment), it was presented to the Guatemalan Government and accepted.5

[Page 701]

Some of the shipments to Guatemala were completed before the G. A. O. ordered the suspension. The bulk of the material, however, is yet to be transferred.

In emphasizing the importance of expediting deliveries, it should be noted that Guatemala has already paid a large part of the accessorial charges for suspended shipments.6 These Guatemalan payments apparently satisfy the G. A. O. requirement that accessorial funds be paid by the foreign government.

Inasmuch as your office has been at work on the general question of the suspended lend-lease shipments, the particular problem of Guatemala is brought to your attention with the hope that some action can be taken with a view to removing G. A. O.’s objections. Anything that can be done to enable us to meet our obligation to Guatemala will be very much appreciated.

  1. A ruling was issued by the Comptroller General (Warren) on January 10, 1947, that not only could the funds appropriated in Public Law No. 521, Seventy-Ninth Congress, July 23, 1946, not be used for any of the expenses incident to the shipment abroad of lend-lease articles after December 31, 1946, but in addition, funds deposited by the foreign governments could not be used for that purpose (800.24/4–2447).
  2. Signed November 16, 1942, Foreign Relations, 1942, vol. vi, p. 444.
  3. See memorandum of May 14, 1946, by Acting Secretary of State Acheson to President Truman, ibid., 1946, vol. xi, p. 885.
  4. See notes of May 23 and October 18, 1946, to the Guatemalan Embassy, ibid., pp. 886 and 888, respectively.
  5. A payment of $65,000 had been made in December 1946.