Editorial Note
On February 26, 1953, President Arbenz signed an order issued by the Guatemalan National Agrarian Council calling for the expropriation, under provisions of the Agrarian Reform Law of June 17, 1952, of approximately 234,000 acres of United Fruit Company property near Tiquisate on the Pacific side of Guatemala, and offering the company government bonds as compensation. The company appealed the expropriation order to the Guatemalan Supreme Court, requesting an [Page 1057] injunction against its implementation; the court denied the appeal on March 18, 1953. A translation of the text of the Agrarian Reform Law was transmitted to the Department of State under cover of despatch 1299, from Guatemala, dated June 19, 1952, not printed. (814.20/6–1952)
On March 25, 1953, Assistant Secretary of State for Inter-American Affairs Cabot handed an aide-mémoire concerning the expropriation, drafted by Mr. Mann and Mr. Leddy and dated March 25, to Guatemalan Ambassador Toriello at the Department of State. The aide-mémoire indicated that the United States Government did not consider deferred payment in the form of agrarian bonds as constituting prompt and effective compensation to the company, that the amount of compensation offered was inadequate under well-established principles of international law, and that the views of the Guatemalan Government were invited concerning the continued operation of the company in Guatemala. (814.20/3–2553)
In Guatemalan Embassy note no. 596, dated June 26, 1953 and delivered to the Department of State on that date, not printed, the Guatemalan Government set forth its position concerning the expropriation of UFCO lands. The note stated in part that the expropriated lands were unproductive and vacant and of no benefit to the company, the expropriation was an exercise of Guatemalan national sovereignty and therefore not subject to international discussion, and that full protection was afforded all foreign-owned property in Guatemala. (814.20/6–2653)
In an aide-mémoire, dated August 27, 1953 and handed to Ambassador Toriello on August 28, the Department of State set forth the legal basis for the UFCO’s claim for compensation from the Guatemalan Government, and requested that direct negotiations concerning the issue be undertaken either between representatives of the Guatemalan Government and the company or between the two Governments. (814.20/8–2753) For text of the aide-mémoire and additional information, see the Department of State Bulletin, September 14, 1953, pages 357–360.
In an aide-mémoire, dated February 5, 1954 and handed to Guatemalan Chargé Alfredo Chocano at the Department of State on the same date, not printed, the Department renewed its request for direct negotiations, and suggested international arbitration as an alternate means of settlement. (814.20/2–554) Department of State files indicate that the Guatemalan Government acknowledged the Department’s communications of August 27, 1953 and February 5, 1954.
[Page 1058]On February 24, 1954, the Guatemalan Government announced final expropriation of an additional 172,532 acres of UFCO property located near Bananera on the Caribbean slope of Guatemala, again stating its intention to pay compensation in the form of long-term agrarian bonds.
On April 20, 1954, in a memorandum of the same date handed to Chargé Chocano at the Department of State, not printed, the United States presented a formal claim against the Guatemalan Government, on behalf of UFCO, for the seizure of the company’s lands at Tiquisate. (814.20/4–2054) For additional information, see the Department’s press release 206, dated April 20, 1954, in the Department of State Bulletin, May 3, 1954, pages 678–679.