Memorandum of Conversation, by Mr. Edward W. Clark of the Office of Middle American Affairs


Subject: Priority Assistance for Ebasco1 in Guatemala

Participants: Mr. Koppelmann, Vice President of Ebasco
ARA—Mr. Mann
MID—Mr. Siracusa2
Mr. Clark

Mr. Koppelmann explained his Company’s plans for expansion of its power plant facilities in Guatemala. He said they had given up the idea of obtaining a loan from the Export–Import Bank since they had been unsuccessful in getting the Guatemalan Government to guarantee such a loan. They had instead raised the necessary capital from private sources in the United States and in Guatemala. He said that the power facilities of the Company were greatly over taxed and that the plant was operating at a maximum capacity at all times. [Page 1449] This was dangerous and expanded facilities were therefore necessary. Some time ago the Company had placed an order with the General Electric Company for a large power generator, a hydraulic turbin, and other needed equipment but there had been indications recently that the order was being held up by the Office of International Trade of the Department of Commerce. Mr. Koppelmann stated that the purpose of his visit was to try to find out what the exact status was of the equipment on order as far as the United States Government was concerned.

Mr. Mann, after reviewing the situation in Guatemala regarding communist penetration and the attitude of the Guatemalan Government toward the United States, especially toward United States business interests, outlined in general terms what the United States Government was endeavoring to do to cope with this problem. He stressed that the cooperation of private business was necessary if our policy was to be successful. In the long run, he said, it was the hope of the Department that, if the experiment in Guatemala should be successful, it would have a salutary effect on the way in which all countries in Latin America, not only Guatemala, treated United States business interests. He said that some or all United States companies doing business in Guatemala might have to suffer somewhat because of our present policy but he said that it was the Department’s belief that in the long run United States interests in Latin America generally would benefit.

With regard to the specific matter at hand, i.e., the equipment which Mr. Koppelmann’s company needed for expansion, a defense order, which in effect meant priority assistance, was necessary. The Department’s opinion had been asked by the OIT and, because of the prevailing situation in Guatemala, the needs of the defense effort and those of countries more friendly to the United States, the Department had not been able to recommend to the OIT that priority assistance be granted for expansion of power facilities in Guatemala. Mr. Mann said that he realized that while this might make it difficult for the company, it would also have an adverse effect on Guatemala and the Guatemalan economy.

Mr. Koppelmann stated that he understood the position of the Department and of the United States Government but of course regretted that his company’s plans for expansion had to suffer. He said it would be helpful, in the probable event that the Company were attacked if there were power failures, to have some sort of a letter from the Department which would indicate that the company had tried to obtain the necessary equipment but had not been able to get it because of the defense effort. Mr. Mann said that the authority for approving or denying applications for priority assistance lay with the OIT and the National Production Authority and not with the Department but [Page 1450] he thought that one or the other of these organizations could issue such a letter. He asked Mr. Clark to look into this matter.

The need for treating the information given Mr. Koppelmann regarding United States policy toward Guatemala on a strictly confidential basis was emphasized. Mr. Koppelmann stated that he understood the necessity for this and his cooperation and that of his company could be depended upon.

Note: Mr. Wythe of the OIT has agreed to send an appropriately worded letter3 to Ebasco per Mr. Koppelmann’s request.

  1. Ebasco International Corporation.
  2. Ernest V. Siracusa, Officer in Charge, Central America and Panama Affairs.
  3. No copy of such a letter was found in the Department of State files.