814.504/8–847
Memorandum of Conversation, by the Ambassador in Guatemala (Kyle)26
On Thursday, July 31, at 5:00 P.M. I called on President Arévalo to discuss with him two important matters: First, the forthcoming trip of Governor Beauford Jester of Texas to Guatemala, around August 14, and, second, the troubles which the United Fruit Company is having because of the provisions of the Labor Code of Guatemala approved by Congress some months ago, and which we believe detrimental to the interests of the United Fruit Company and discriminatory against American interests in this country.
Since the pleasantries had already been exchanged at the beginning of the conversation about Governor Jester’s trip, I said I had this unpleasant matter to bring up regarding the trip of Mr. Robert Newbegin to Guatemala and the conferences he had had with the Foreign [Page 711] Minister about the alarm of the United Fruit Company officials in the United States regarding the effect the Labor Code was having on its interests here. The President had apparently been talking earlier in the day with the Foreign Minister regarding Mr. Newbegin’s visit, so he immediately cited Article 243 of the Labor Code as the source of trouble. President Arévalo attempted to explain the said article in terms of the whole Code by indicating that although the Code appeared to be radical, in fact it was not, that under the provisions of the Code, there could be no strikes. The Code, he went on, provided for the economic and moral improvement of the workers of Guatemala and definitely had not been aimed against the foreign interests in the country; that if anyone said something else, it was possibly due to a misunderstanding or mis-translation of Article 243. I then said that the provision authorizing the workers of corporations employing more than 500 persons to strike at any time would only be aimed against the United Fruit Company and perhaps the International Railways of Central America, which was also an American company; that the United Fruit Company could not possibly feel the security it needed for its interests when the workers could refuse to collect the crop when the bananas were about to ripen. Such conduct could undoubtedly cause tremendous losses to the company.
I also made reference to the provisions of the Code which limit the number of foreigners which may be employed by any one organization and which hinders the development of new American enterprises especially in their early stages when normally no nationals of this country have been trained to do essential jobs. To this he replied that the Code applied only to workers (trabajadores), not to executives or technical personnel (directores o personal técnico). I stated that I had a different understanding of the said provisions of the Code based on their actual application and that the matter should receive careful consideration.
The President then read the article and after reading it twice, he himself agreed that it was rather obscure, but he could assure us that there was no intention whatsoever to hurt the interests of the United Fruit Company. He added that last year when the Company had a strike, the workers, to a certain extent, had been encouraged in the movement, which was more or less aimed against the Government. When the Government wanted a settlement, it was the Company that hindered such settlement. Furthermore, he said that the lawyer of the Company, whose name he did not mention, was one of the people who were definitely against his Government and who had been prominent in every activity against “my Government”. After some other comments on the Labor Code, he said that if United Fruit Company would [Page 712] present to him or to the Minister of Economy and Labor a series of suggestions for amendments, he would give them very serious consideration and together with other amendments suggested by local labor organizations and that the Government itself was thinking of putting before Congress, they would be submitted as soon as Congress met in September.
He added that he would be most willing to have the Company do so because he knew what the interests and the activities of the United Fruit meant for this country and they certainly would want to offer every possible cooperation so that they could help develop the country further. I then asked if I could understand I was authorized to indicate to the Company that they could present this memorandum and the possible amendments to him, and he said by all means to do so at the earliest possible date because he was most willing to have this matter cleared as soon as possible.
- Copy transmitted to the Department by the Ambassador in Guatemala in his despatch 2594, August 8; received August 14.↩