711.14/6–3049
The Secretary of State to the Ambassador in Guatemala (Patterson)
No. 114
Sir: Reference is made to the Department’s Restricted Instruction No. 80 of June 14, 1949 which directed you to express to President Arévalo this Government’s concern over the attitudes adopted and the measures taken by the Guatemalan Government in disparagement of American rights and of good relationships between Guatemala and the United States.
The Department fully approves of the manner, as reported in the Embassy’s Despatch No. 331 of June 30,1 in which you approached the President.
The Department is, however, seriously concerned that although you made specific reference to the developing conflict between the International Railways of Central America and the Guatemalan Labor Union SAMF, no evidence has been developed to indicate that the President or any agency of his Administration has taken positive action to insure that the IRCA would receive fair and just treatment in accordance with the established law of Guatemala. On the contrary, the Government of Guatemala, by indifference and inaction, seems to have condoned if not approved, what appears to have been an attempt to coerce the IRCA into entering into compulsory arbitration of the dispute, without first attempting to utilize conciliation procedures, as stipulated in the Labor Code.
Furthermore, the Department is seriously concerned that the Arbitration Tribunal, accepted with reservation and under protest by the IRCA, was composed of labor and management representatives of dubious competence; that the Court Representative has given evidence of bias in favor of the Union case; that there is evidence of unseemly participation in the deliberations of the board by the Coordinating Magistrate of the Labor Courts; that the management representative has given reason to believe that he was coerced into signing the arbitration award, without having been given an opportunity to study the case, or interview witnesses and obtain qualified and expert advice; that the award was apparently rushed through in an effort to complete action before the Supreme Court had had an opportunity to decide [Page 657] upon the IRCA’s appeal for an injunction against the Arbitration Board on legal grounds; and that labor elements endeavored to intimidate the Supreme Court of Guatemala which was considering the IRCA’s appeal.
It is further a matter of deep concern to note that when the President of the IRCA2 personally requested the intercession of President Arévalo, he is reported to have agreed with the IRCA’s position and promised assistance. However, nothing positive has been accomplished by him nor is there evidence that he endeavored to act forcefully upon his reported commitment.
In the face of these circumstances, the Department has been reluctantly led to have grave doubts that United States firms will be in a position to secure impartial justice in Guatemala so long as the Government appears to condone obviously improper activities and takes no action to insure the right, long recognized and established by international usage, of foreign elements to live and work within the framework of the laws of host nations.
As a consequence of these developments, and provided you perceive no objection, you are requested to seek an immediate interview with President Arévalo to discuss with him specifically the critical situation which now confronts the International Railways of Central America and the significance which the Department places upon this case as a portent of the future of good relationships between Guatemala and the United States.
In this interview you should remind the President of your previous discussion of the case and should review for him, step by step, as reported in your several communications to the Department, the progress of the dispute and the facts as they are known to the Embassy and to the Department. You should state that the Department’s viewpoint is based upon these facts, and you should indicate that if they are considered by him to be incomplete or inaccurate, the Department would welcome full clarification. Otherwise, you should state that the IRCA is now faced with the choice of refusing to comply with the award of the Board, thereby appearing to defy the majesty of the Guatemalan courts, or of complying with the award of the Board, which it considers to have been illegally constituted and granted and thereby placing itself in serious economic jeopardy.
You should imply that the Department considers it very regrettable that the President has not seen fit to use his influence to assure fair treatment of American interests, and that if the Department’s information is well founded, the IRCA is fighting for its very existence against circumstances which may ultimately force it into an appeal [Page 658] for intervention of the Government of the United States on the grounds of a denial of justice.
In making this statement you should refrain from indicating that this Government in any way prejudges the situation and considers that there has in fact been a denial of justice. Rather, you should indicate that the situation appears at this time to be serious enough to warrant and require the immediate attention of both Governments so that every effort may be exerted to avoid a possible consequence of this disagreeable nature.
In a convincing manner you should indicate to the President that public opinion in certain parts of this country has been aroused by the reported Guatemalan treatment of Americans and American enterprise. Therefore, the question has now arisen as to the extent to which the Government of the United States can continue, with technical aid and funds, to join with other nations in friendly cooperative projects when a reciprocal desire for mutual understanding is not demonstrated by the insurance of fair and impartial treatment to American individuals and firms resident in such countries.
For your information, it is contemplated that the Guatemalan Ambassador will be requested to call at the Department, at a time to coincide with your interview with the President, for a full and frank discussion of the IRCA case.
You should make it entirely clear to the President that you are acting on the specific instructions of your Government in this matter.
Very truly yours,
Assistant Secretary