Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

GT–18. Memorandum from the Director of the Office of Central American and Panamanian Affairs (Stewart) to the Assistant Secretary of State for Inter-American Affairs (Rubottom)¹

Washington, June 12, 1959

SUBJECT

• Consultation with Ambassador Mallory.

During his consultation in Washington,² Ambassador Mallory’s discussions of the problems that he faces in Guatemala will probably center on three or four general themes:

The question of how to help maintain President Ydígoras in office for his full term and of how, in so doing, to ensure his succession by elements friendly to or willing to work with, rather than against the United States.

2. The leftist swing of popular sentiment in Guatemala, and the problem of growing communist and pro-communist activity.

3. The “Arevalo Problem.”

4. Inter-American Highway

1. YDÍGORAS:

Ydígoras has not forgotten nor been allowed to forget we were lukewarm toward his plans to reach the Presidency of Guatemala in 1954, 1957 and 1958. He was somewhat placated during his post-electoral visit to the United States and our relation ran fairly smoothly until a few months after the visit to Guatemala of the Dr. Milton Eisenhower mission. Despite all the efforts made to forestall such a development, Ydígoras wanted to believe and did believe that we would heed a large part of his requests for $95 million dollars in loans. Perhaps this belief was encouraged by the fact that his submissions were prepared with the assistance of Americans whom the Guatemalans consider “quasi official”, i.e. Klein & Saks experts.³

It now becomes apparent that in announcing that Guatemala wanted to shift from grants to loans Ydígoras did not mean quite what he said. He was playing up to growing nationalist sentiments and expected us to play along with him. His subsequent resentment over the “relatively high” interest rate assigned to the rubber development loan indicates he had hoped for token interest rates that would have turned grants only technically into loans. It must be recognized that Clemente Marroquin Rojas’ loud complaints that United States aid is a “national shame” have wide appeal even to persons who feel that United States aid must be continued.)⁴ These people therefore look for ways to remove the stigma attached to aid (i.e. the supposed subservience that it imposes on Guatemalan governments), as minimum interest rates and the transfer to Guatemalans of major authority for the administration of such aid.

Our inability to go along with such an approach had made Ydígoras susceptible to the intrigues and murmurs of a weird assortment of [text not declassified] counselors who include (for different reasons and with varying motives) the Gonzalez Siguí brothers, Roberto Alejos, the Colombian Luis Morales Gomez, Jorge Garcia Granados and the American Felix McBride, of Washington.

Ydígoras’ recent actions suggest that, since loans he had hoped to obtain from such sources as DLF and the Eximbank are likely to be subject to what he considers high interest rates, he has been led to believe that he can do as well on the private money market and therefore is testing it, in the hope that simultaneously he can demonstrate his credit abroad, raise hopes for settling the country’s economic problems, and flaunt his independence of the United States Government. Nevertheless, the cold reception given to one Ydígoras emissary (Alejos),⁵ the colder one due another (Morales Gomez) and possibly to a third (a Venezuelan, Carlos otto) raise the probability that their failure to satisfy Ydígoras desires will be attributed, not to their own shortcomings, but to Departmental intrigue.

Ydígoras is rumored to have said that he will do anything to prevent the Department from handling him “as it did Arbenz”. He is quite capable, if led to believe that such a fate is imminent, of turning over the Government to the forces he believes would give us the hardest time in Guatemala. One group that seems to be candidate for succession in such an event (and would no doubt the characterization of “difficult” from our point of view) includes the Gonzalez Sigui brothers⁶ and the Arevalista (to put it mildly) Col. Carlos Paz Tejada. However, he does not seem to have made up his mind definitely to throw the game to the nationalists and/or leftists. While toying with the idea, he also is assuming anti-Communist postures, as in calling ODECA Ministers of Government together to discuss the communist problem and in (presumably) inspiring Consul General Urrutia’s warning to the Wall St. Journal on June 3 that, if the pro-Communist left wins the November congressional elections and subsequently the presidential elections, it will all be our fault.

Ydígoras is volatile and if ways could be found to support tangibly our assurances that his advisors are wrong in claiming the Department seeks his downfall, it might well be possible to work fairly peacefully with him while he remains in office.⁷ His “economic development” plans cover the field from housing, industrial development through electrification. To bolster national pride and armed forces support, he wants six B-26s, at least. For political reasons, he wants to put on a big show of developing the Peten region. We should think of what can be done for him within this framework. In discussing the overall question of aid, Ambassador Mallory no doubt will have strongly in mind the recent fracas between Clemente Marroquin Rojas (Minister of Agriculture and “La Hora” Editor) and USOM Director Oscar Powell. The Ambassador and Mr. Powell have somewhat different views on the future of aid programs, their usefulness, and the general political picture.⁸ Marroquin’s insistence that Powell and most of his staff be removed has reduced our flexibility for maneuvering.

We should keep in mind that Ydígoras’ resentment toward the Department is currently reflected in his attitude toward other things American. Recent new regulations imposed on oil companies patently reflect suspicion that the companies are plotting to hide oil discoveries from him and so deprive his Government of the means for resolving all its problems. If he goes militantly nationalistic, it seems probable that the first to suffer will be American enterprises, beginning probably with the Empresa Electrica, and so on down the line.

2. SWING TO THE LEFT:

The Embassy has reported a marked swing to the left in Guatemala and Ambassador Mallory has urged that we view this in its overall aspects, guarding, against any inclination to see it in terms of individuals on whom hopes and fears can be pinned.

The objective to be pursued would seem to be the development of a moderate left capable of promoting a healthier social, political and economic climate than has been possible under the traditional ruling classes. Unfortunately, liberal elements in Guatemala seem to be almost as badly split (although perhaps not so violently at odds) as the right. The one element responsible for attempting to hold them together (for the time being) is the communist.

The Guatemalan left generally tends to be intensely nationalistic, or at least to value greatly the political uses of hyper-nationalism. American business in Guatemala seems likely, in certain cases, to play into the hands of demagogues and keep the nationalism issue alive, making our efforts to sponsor a moderate left more difficult.

Ydígoras’ approach to the communists has been a source of grave concern to us. However, we must recognize that it has not been entirely devoid of merits. It has enabled him to boast of respecting individual liberties and has reduced tensions. It has also helped to sort the goats from the sheep, which was an almost hopeless task under Castillo. The return of some prominent, fondly remembered Arbencista exiles has deprived them of martyrs’ crowns and revealed some as ordinary human beings who are somewhat out of step with the times. The great defect in Ydígoras’ handling of the communist problem has been his unwillingness to clamp down on clearly identified agitators and organizers.

3. AREVALO:

The Embassy’s views about Arevalo are that we must recognize that he is alive, that we cannot confidently hope that he will be run over by a truck and that, at the present time, he is the only sure-fire rallying point for the bulk of Guatemalans—either because they love him or because they believe his return is inevitable. The Department recorded its views on the subject in its instruction No. A-155 of May 29.⁹ This will probably serve Ambassador Mallory as a point of departure for some phases of his discussions.

4. INTER-AMERICAN HIGHWAY:

Ambassador Mallory will probably bring us up to date on the problems connected with completion and surfacing of the Inter-American Highway in Guatemala. It might be interesting to discuss with him ways and means of diverting to this purpose some of the unexpended grant-aid money that is now earmarked for projects that do not interest Ydígoras, because they are identified with Castillo and might be credited to the MDN if carried through.

1. Source: Department of State, ARA/OAP Files, Lot 63 D 146, “Ambassador Lester J. Mallory: Guatemala, 1959.” Secret. This memorandum, drafted by Gorrell, bears the following notation by Rubottom: “A very good paper.”
2. Mallory was in Washington for consultations, June 16–29, 1959. For these consultations, he wrote a 16-page situation report, June 12, in which he reviewed events in Guatemala and requested guidance on whether or not to help Ydígoras stay in office. The covering memorandum bears Rubottom’s notation: “An excellent paper. Read during meeting 6/16.” ARA/OAP Files, Lot 61 D 473, “Guatemala”) No memorandum of conversation on Mallory’s June 16th meeting with Rubottom was found, but see Document GT–19 for a report by Mallory on the meeting.
3. A report on Guatemala by the consulting firm of Klein and Saks is in decimal file 814.00/2–2858. In a memorandum of a conversation with Ambassador Antillón on June 10, Assistant Secretary Rubottom pointed out that more than $30 million of the Guatemalan request for loans was for assistance to a housing program, and “overall policy made it impossible to satisfy Guatemalan hopes in this connection, but that other ways have been and are being sought to help Guatemala find a solution to its housing problem.” (Rubottom Files, Lot 61 D 279, “Guatemala, 1959”)
4. In a note to Foreign Minister Unda Murillo, May 11, Mallory asked if Marroquín’s statements of May 8, expressed the views of the Guatemalan Government. (Enclosure to despatch 624 from Guatemala City, May 13, 1959; 714.00/5–1359) On May 13, Mallory met with Unda Murillo who gave him a copy of a note in reply and then said that the statements of the Minister of Agriculture of May 8 did not reflect the views of the Government. (Memorandum of conversation by Mallory, May 13, 1959; ARA/OAP Files, Lot 63 D 146, “Ambassador Lester D. Mallory: Guatemala, 1959”)
5. See the memorandum of conversation by King, March 25, Document GT-16.
6. Carlos González Siguí, Private Secretary to the President of Guatemala; and Col. José Rubén González Siguí, Guatemalan Minister of National Defense.
7. During a farewell visit of Ambassador Antillón of Guatemala on June 10, Assistant Secretary Rubottom told the Ambassador that “he confirmed fully the expressions of admiration and friendship for President Ydígoras that he voiced in December.” (Memorandum of Conversation by Gorrell in Rubottom Files, Lot 61 D 279, “Guatemala, 1959”)
8. Powell and Mallory had a disagreement over the administration of the ICA program, and Powell had questioned U.S. support of Ydígoras, but Mallory felt the United States should continue to support him. (Letter from Mallory to Stewart, May 27, 1959; ARA/OAP Files, Lot 61 D 473, “Guatemala”)
9. The referenced instruction set forth two objectives: “(1) To minimize the threat to our interests if Arévalo, a man with a long anti-American record, should reappear on the Guatemalan political scene in the near future, and (2) to postpone, if possible and as long as possible, Arévalo’s return to Guatemala and utilize the time available before a successor to the Ydígoras Government must be chosen to ensure the most satisfactory possible succession.” (714.00/5–2959)