50. Letter From the Acting Assistant Secretary of State for Inter-American Affairs (Rubottom) to the Ambassador in Guatemala (Sparks)1
Dear Eddie: I have your letter of October 23, 1956,2 supporting the need for further grant aid to Guatemala in FY–1958. Both your letter and Toica A–3043 have received careful consideration in the Department as well as in ICA.
The Department considers that the economic situation in Guatemala and Guatemala’s potential borrowing capacity are sufficiently good, compared with other areas of Latin America, that we would not be justified in requesting under present circumstances further emergency aid for next fiscal year. You will recall that the E area of the Department, even when funds for FY–1957 were being studied, considered that there was no economic justification for our asking as much as $10 million in grant aid, but did not oppose this sum because of the political considerations involved. In addition, we do not see how we can request additional grant aid funds for FY–1958 in view of National Security Council policy (see paragraph 24 of NSC 5613/1 of September 25, 19564).
I appreciate the danger you mentioned in your letter of our not achieving our objectives should the Guatemalan people not be convinced, before Castillo’s term of office ends, that they are enjoying a better life. However, I believe we have fully met our commitment to help Guatemala through its emergency. I do not see how we can justifiably ask for more defense support funds now in view of the relatively optimistic economic picture in Guatemala and the substantial aid already provided though still largely unspent. If in the future events indicate that the Guatemalan Government is facing a grave emergency, we can always reconsider our position.
We understand that ICA proposes to mention, in the forthcoming FY–1958 MSP budget presentation, that the Embassy and the [Page 131] USOM believe there will be need for further grant assistance to Guatemala which State and ICA do not support at this time. Should this possible need develop it would constitute a requirement to be met from the world wide Mutual Security Program contingency fund.
Sincerely,
- Source: Department of State, ARA Deputy Assistant Secretary’s Files: Lot 58 D 691, Guatemala. Secret; Official–Informal.↩
- Not printed. In this letter, Sparks wrote in part that “world opinion believes that the United States was responsible for the overthrow of the Arbenz regime. We can deny this charge, but the fact remains that we were publicly delighted with the change and that people, and the United States press in general, think that we have a special responsibility for the success of the new government. Entirely apart from the danger that failure to achieve our objectives here might spell a return of communism, is the enormous loss of prestige here and abroad which such failure would entail for the United States.” (Ibid.)↩
- Not printed.↩
- See vol. vi, Document 16.↩
- Printed from a copy which bears this typed signature.↩