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

GT–20. Despatch from the Ambassador in Guatemala (Mallory) to the Department of State¹

No. 14

Guatemala City, July 9, 1959

REF

• Deptel 521,.June 24; Embtel 6, July 4; Embtel 14, July 9, 1959;Embdespatches: No. 624, May 13; No. 669, May 25; No. 667, May 29;No. 677, June 4; and No. 726, June 24, 1959.²

SUBJECT

• Revision of United States Aid to Guatemala.

[Here follows two paragraphs on Ambassador Mallory’s consultations in Washington.]

Upon the Ambassador’s return to Guatemala³ and with officials USOA/G, the details of the “package”⁴ were prepared in the form of talking notes to be taken up with President Ydígoras.⁵ It was desired to go over these notes with Mr. Rollin Atwood, Regional Director of the Office of Latin American Operations of ICA, who was to arrive in Guatemala on July 2.⁶ President Ydígoras, in the meantime, had requested that the Ambassador call on him on July 2, but it was possible to delay the appointment to July 3. A copy of these talking notes is attached.⁷

The appointment of July 3 with the President was kept. The discussion lasted two hours. The President was in general agreement with the many points raised and went over each item of the program in detail. It is clear that he has now been aware of just what is involved in each program. It was arranged that a meeting be held at 3:00 p.m., July 8, 1959, in the Casa Presidential of the President and Ministers concerned, etc., to discuss reprogramming.

On the technical assistance side, the President demurred over the cancellation of SCIDA, saying that this would look like censure. I told him it was necessary to clean the slate. After about three attempts on his part, he got the point.

With respect to the industrialization loan of the Export-Import Bank, he stated that Dr. Mirón could go to Washington for this purpose.

During the discussion, the President was given a copy of the talking notes. He asked if he might keep them, to which assent was given. This, it appeared, would be helpful in any thinking or review he might make before the meeting, which it was felt reasonably sure he would do. While his English is very adequate, he does like to read slowly by himself.

Notice of termination of United States support of the Agricultural Servicio was prepared. It took the form of simultaneous letters to the Minister of Agriculture and to the Personero del Presidente⁸ from the Director of the USOM/G. In order that there be no possibility of misunderstanding, copies of these letters were forwarded, on July 8, to the Foreign Minister under cover of a first person note. Copy of the note and its enclosures is enclosed.⁹

The meeting set up with the President and heads of government entities concerned was held in the Casa Presidencial at 3:00 p.m., July 8. People were seated about the dining table which accommodates 40 people and there was a solid bank of about that many more close around. The various Ministers concerned, plus the head of the Agrarian Department, the Bank of Guatemala, the Foreign Minister and their deputies, advisers, etc., were present. The President began the session by stating that the meeting was for the purpose of considering possible changes in the aid program. He pulled out the talking notes referred to above and asked if the Ambassador wished to go through them. This opportunity was taken. A review was made of the President’s wish to adapt the program more to present-day conditions and to the situation faced by the Government in the country, the Ambassador’s trip to Washington and the results thereof. (See enclosures, especially talking notes). After running down a series of items on special assistance and noting the amount of funds remaining in each as of June 30, discussion was invited as to each of the items and question was raised as to what changes the President and his Government might wish to make in the program.

The most extensive discussion occurred under the heading of Rural Development. This likewise has the largest amount of funds remaining, amounting to over $7 million. The President spoke at very considerable length contending that land distribution, or the promise thereof, is a principal weapon of the Communists or leftists, that nothing in this respect had been done by his immediate predecessors and that some vitality must be given the program even at the expense of handing out small parcels of land. He maintained that land ownership was a principal deterrent to Communist ideology. He agreed that the kind of land distribution or land resettlement with which the United States has assisted is important in the long run and in raising the productive level of Guatemala. However, he felt that urgent distribution of small tracts was needed on a political basis. After he had finished and before the head of the Agrarian Department could reply, the Minister of Agriculture took the floor and by the clock spoke for 18 minutes. This discussion has been aptly described as a sustained tirade damning the rural development program, American technicians, the direction of U.S. aid in Guatemala, improper budgetary practices of the Guatemalan Government, a defense of Indian farming practices and practically everything else in the book except a defense of oxcarts. His statement, if such it may be called, was greeted by others present with a mixture of curiosity and amazement. He finished without any comments by the President or anyone else present. Attempt was made to progress to the next item on the agenda when Colonel Peralta, head of the Agrarian Department, only after some insistence, was able to get the President’s permission to speak in defense of the Rural Development Program. This he did at some length refuting many points brought up by Lic. Clemente Marroquin Rojas, the Minister of Agriculture. When this was over, the President still made no comment. Before the day was finished, it looked as though the President was acting as umpire between the unruly members of his family, including a slightly weak-minded member thereof.

With respect to other projects under the subject of special assistance, such as housing, malaria eradiation, environmental sanitation, education, public safety, community self-help, the various Ministers spoke in turn. Each expressed himself as very much satisfied with the program and demonstrated resistance to giving up any of their funds for the use of any other project. Certain worthwhile and revealing discussions ensued, for example, the desirability of combining work in environmental sanitation with water supplies in the Ministry of Communications and Public Works in order to avoid any duplication of effort. Following the discussion of these several programs, the Minister of Finance¹⁰ delivered himself of a rather thoughtful, but at the same time very vigorous, attack on all heads of projects, stating that they had failed to provide him with data as required, that he did not have material for the budget, that he had found Guatemala was far in arrears on its contributions, that they should assist the Ministry of Finance, etc., etc., No one escaped this castigation which apparently is well merited. The Minister went so far as to state that in the past when the Ministry of Finance had need for data on the aid program and joint expenditures that he had to take the embarrassing route of asking the Americans for it.

The Ambassador then turned to the technical assistance program, stating that this operates on an annual basis rather than as part of any longer term or pipeline fund, such as might be true of special assistance. With respect to the several ministries involved, he thought that the programs could continue along the same general lines as they appeared to be desirable and to meet needs. With respect to agriculture, however, it had become apparent that this program no longer met the purposes of the two governments. He thought it better that all activities be handled unilaterally by the Ministry of Agriculture and, therefore, notice of termination of U.S. participation on SCIDA had been given, to be effective August 31. The Ambassador said that in order not to be too negative concerning these matters on which Guatemala might need technical assistance, that it were possible, if requests were made, that a few technicians might be maintained on the staff of USOM to assist in an advisory capacity. These might include, for example, some rubber technicians to assist the Bank of Guatemala which was the agency receiving a loan for rubber development from the Development Loan Fund. Similarly, a few technicians might be maintained to help complete the work already started in the rural development program, such men as extension advisers. Dr. Miron, of the Bank of Guatemala, indicated his desire for the rubber technicians and also asked if the United States could not also continue to make available the services of a pathologist in connection with the establishment of the production of Kenaf fiber and a bag factory. It was indicated that this might be possible. Colonel Peralta indicated that the Agrarian Department would be interested in some assistance from extension technicians.

The Ambassador then again referred to the presence of Mr. Rollin Atwood, Regional Director of ICA for Latin America, who is here to assist in connection with revision of the program. It was pointed out that the 1960 budget would have to be approved soon, that work could proceed rapidly if decisions were made during Mr. Atwood’s visit, but otherwise considerable delays might ensue. The suggestion was then reiterated that the President and his Ministers state what changes they wished to have in the program. There being no direct requests made at the moment, it was agreed that individual Ministers and program chiefs would meet early the following day with Mr. Atwood, Mr. Powell, and Mr. Colmenares, Coordinator for the Guatemalan Government, to review the programs in detail.

The meeting was useful as it provided a substantial clearing of the air. It provided an opportunity of placing the responsibility for future conduct of the program, or changes thereof, squarely on the President and his Ministers. It settled the question of the Agriculture program in the best possible form.

It is not expected that very substantial changes will occur in the aid program, except for agriculture. There may be some shifting about to make it appear more attractive to the present Government as both an administrative end a political exercise. This all appears to have been necessary and substantially worth-while. Any significant changes will be reported.¹¹

1. Source: Department of State, Central Files, 814.00-TA/7–959. Secret.
2. None printed; these telegrams and despatches dealt with the revision of the U.S. aid program and with Marroquin’s attacks on the program. The respective file numbers are 814.00–TA/6–2459; 814.00–TA/7–459; 814.00–TA/7–959; 714.00/-5–1359; 714.5–MSP/5–2559; 714.00(W)/5–959; 714.5–MSP/6–2459; 814.00–TA/7–959.
3. Upon returning from consultations in Washington, Mallory resumed charge of the Embassy in Guatemala on June 30.
4. Reference is to the revised program of aid to Guatemala submitted by Mallory in his memorandum to Rubottom, June 24, printed as Document GT–19.
5. Reference is to a paper dated July 2 which is enclosure 3 to the source text.
6. Atwood was in Guatemala in July 1959, to assist in the revision of the U.S. aid program.
7. Not printed.
8. Adolfo Colmenares, Coordinator for the Guatemalan Government, and Government Deputy for Technical Cooperation Affairs.
9. Not printed; see footnote 5 to the memorandum from Mallory to Rubottom, June 24, 1959, Document GT–19.
10. Julio Prado García Sales, Minister of Finance and Public Credit.
11. In despatch 168 of September 21, Mallory reported the following allocation of assistance for fiscal year 1960: $313,000 for the Army Mission including military assistance; $2,400,000 for ICA technical cooperation; $70,000 in ICA special assistance for the Public Safety Program; and $3,500,000 for the construction of the Inter-American Highway. (714.5–MSP/9–2159).