714.00/2–954: Telegram

The Secretary of State to the Embassy in Guatemala 1

confidential
priority

387. Though unconvinced sincerity practicality Foreign Minister’s proposal to refer problems of American companies to neutral commission [Page 1098] (Embtel 308, Feb 9)2 Department agrees positive response desirable prior Toriello’s departure for Caracas Conference and recommends following for oral presentation:

(1) Department interested in most feasible methods of settling these problems but regards direct negotiations between companies and Guatemalan Government as normal means to be exhausted before considering any other action; (2) companies always disposed discuss conflicts or any phases their contracts, and any justifiable modifications, as has been demonstrated in negotiations with other Latin American governments; (3) corresponding Guatemalan disposition toward settlement could be shown in pending disputes, solution of which could better relations and define any issues not soluble by negotiations; and (4) details of Minister’s proposal (per your draft) desire by Department for further consideration, as matter viewed of high but not primary importance in our relations.3

Dulles
  1. Drafted and signed by Mr. Leddy.
  2. The referenced telegram, from Ambassador Peurifoy, reads in part as follows:

    Toriello said he had made suggestion to President Eisenhower which he hoped I would Help to carry forward. This was that a neutral commission be appointed to investigate whether contracts between American companies and Guatemalan Government were in line with modern concepts of such relationships and whether companies were making adequate contribution to government and national economy. He said the President had received idea favorably and that Arbenz had subsequently approved it.” (714.00/2–954).

  3. In telegram 345, from Guatemala City, dated Feb. 23, 1954, Ambassador Peurifoy reported that he had suggested to Foreign Minister Toriello that his proposal to refer problems of American companies to a neutral commission be reduced to writing, and that the Foreign Minister had replied that he would consider the matter further upon his return to Guatemala from the Caracas Conference (714.00/2–2354).