GT–34. Telegram from the Ambassador in Guatemala (Muccio) to the Department of State1
224. For Mann from Barall.2 In meeting with Dillon on grant aid to Guatemala, I recall he used words: “You may even have to announce it while you are there.”3 This statement prophetic. Immediate action called for to shore up friendly Chief of State in confused but dangerous situation. If Ydígoras now overthrown, even by moderates or military elements, GOG would still be weakened and susceptible Castro/Communist overthrow near future. Principal weakness of Ydígoras and therefore principal basis for attack, whether from left, moderate, or right, arises from his economic and fiscal policies. It is clear that GOG submission to IMF was merely optimistic forecast which cannot materialize. Budget cuts first quarter have been so deep as to jeopardize current GOG efforts retain power, affecting mobility troops and police, availability pol, spare parts, etc. I believe immediate action indicated with next 48 hours decisive. Accordingly I propose inform president at meeting scheduled nine a.m. fourteenth that ten million dollars budget [Typeset Page 723] support forthcoming and that Rio Hondo loan receiving positive action DLF. Johnston concurs.
- Source: Department of State, Central Files, 714.5-MSP/11–1360. Secret; Niact.↩
- Telegram 322 to Guatemala City, November 8, reported that Milton Barall, Deputy Assistant Secretary of State for Inter-American Affairs, accompanied by an ICA officer, would visit Guatemala to discuss the Guatemalan budget with Ydígoras, Bendfeldt, and the American Embassy. (714.5-MSP/11–860). John W. Johnston, Jr., Deputy Regional Director for Latin America, International Cooperation Administration, accompanied Milton Barall to Guatemala City.↩
- The referenced meeting was not further identified. Regarding Barall’s meeting with Ydígoras, see telegram 226 from Guatemala City, November, 14, Document GT–40.↩