21. Memorandum of a Telephone Conversation, January 25, 1955, 12:15 p.m.1


  • Guatemala


  • American Ambassador Norman Armour—Guatemala, Guatemala
  • Mr. Thomas C. Mann, Counselor, American Embassy, Guatemala, Guatemala
  • Assistant Secretary Henry F. Holland

Amb. Armour telephoned and referred to Mr. Holland’s telegram to him and Mr. Mann.2 He said his first reaction was that it was a bombshell. Since then they have tried to think up constructive suggestions to give on how to smooth out the situation. Amb. Armour said Mr. Mann would explain one or two suggestions but asked if, in the meantime, Mr. Holland had talked with Amb. Cruz. Mr. Holland said he had stepped out of his meeting with Amb. Cruz to take this call.3 Amb. Armour said he would like to be advised by telephone of that transpired at that meeting. Amb. Armour asked if Mr. Holland knew if Amb. Cruz was going down to Guatemala. Mr. Holland said he would find out. Amb. Armour [said] that, putting aside all personal feeling, he had in his cable to Mr. Holland set up his analysis of the causes of the problem. Now they had some more analysis to give him. Mr. Holland said that insofar as his analysis went, he thought they were 100% accurate. Next it was Mr. Holland’s feeling that some sort of course of action as suggested in the cable to them would completely eliminate the problem.

Mr. Mann said that their telegram 4594 was done very quickly on Sunday afternoon. Since they sent it they have had more time to think it through since it was a surprise to them there. Mr. Mann said when he hit town in September he was handed a request for $260 million. He said there was severe disappointment when he told them it was unrealistic and when [then?] they shifted to programs that could be carried out. Disappointment was caused by US promoters, carpetbaggers and others who were all promising how easy it was to get it. An air of expectancy had been created by statements in Congress, by the press and others. They had a proposal for a highway network covering the country at an estimated cost of $60 [Page 60] million. He said that they had had a talk with the people there (including the top people) about it and convinced them that they could proceed road by road and not talk in terms of program now but in terms of work as the banks are ready to move. That was a shock and a disappointment as Mr. Mann looks back on it now. He said he is not even sure he is right. They say that if everybody wants to give them a large deal of $60 million, there must be somebody sabotaging it and who would be doing that except the American Embassy, and why would the Embassy do it except that they are talking with other elements who are of the same mind and so there must be a conspiracy to hold up economic recovery to help others come in. Mr. Mann said this was the situation we have to face up to.

There are two ways to eliminate the distrust. One is for the Ambassador and Mr. Mann to talk to the President in Guatemala explaining to him, as they have tried to do there, what the realities are in Washington and that it is according to US policy. Mr. Mann said Mr. Holland couldn’t do any more than they could in Guatemala because they suspect the entire State Department. Twice the Guatemalans have talked about going straight to the White House. The other course and the one Mr. Mann recommends is to have the President or the Secretary call in the Ambassador so that the Guatemalans would know that what the folks are telling them is not correct. He thinks, however, that it is a policy decision for the Department to make. He thinks if this were done then they would have a reasonable chance to work out the details. If not, it would be futile to try to get anywhere.

Mr. Mann said that he has reason to suspect that the allegations about our relations with the companies, etc., by the Ambassador up here is because it is evident that he has a bias against them. There is no evidence that responsible people down there share that opinion. Mr. Mann said he could be wrong but he doesn’t think so.

Mr. Mann said they wanted Mr. Holland to have this analysis before he talked with Amb. Cruz.

Mr. Holland said he believed that these things are sensible: First, that the conference recommended in his cable to them should be held and should be frank and sparse and objective. Mr. Holland said he had the hunch that if it is held much of the problem will disappear. He has the further hunch that the conference Mr. Mann suggests Mr. Holland work up with the Secretary will be helpful. The combination of the two talks will achieve the results we want. However, he would not want them to postpone their talk there until the talk takes place up here and they should go right ahead.

Amb. Armour asked if the Secretary would see the exchange of telegrams. … Mr. Holland said that he would arrange that.

  1. Source: Department of State, Central Files, 714.00/1–2455. Confidential; Limited Distribution. Drafted by Mabel Karydakis, Holland’s personal secretary.
  2. Document 17.
  3. See the memorandum, supra.
  4. See footnote 6, Document 17.