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

HO–20. Memorandum of Conversation, by the Officer in Charge of Honduran Affairs (Chaplin)¹

Washington, November 30, 1960

SUBJECT

• Financial Difficulties of the Standard Fruit Company

PARTICIPANTS

• Acting Secretary Douglas Dillon
• Representative Hale Boggs
• Dr. Thomas S. D’Antoni—President, Standard Fruit Co.
• Mr. Robert Smith Standard Fruit Co.
• Mr. D. J. Kirchhoff Standard Fruit Co.
• Mr. Kenneth H. Gormin—Bauerlein Inc., New Orleans
• ARA—Deputy Assistant Secretary Milton Barall
• ARA:OAP—Mr. Chaplin

Representative Boggs said that he had requested the appointment at the suggestion of Mr. Waugh of the EXIM Bank, who felt that the political implications of Standard Fruit’s financial problems should be brought to Mr. Dillon’s attention.²

Dr. D’Antoni related the history of the Standard Fruit Company, the circumstances of its critical financial condition, the fact that some 50,000 people in Honduras were directly or indirectly dependent on company operations, and presented a memo³ showing that the company had lost $6.4 million in the first 8 months of 1960, primarily as a result of low banana prices. Mr. Dillon questioned Dr. D’Antoni to clarify that the primary reason for the banks’ refusal to renew credits to the company was the depressed banana market, with Latin American political conditions being a contributory factor.

Mr. Boggs suggested that if Standard were to cease operations, the consequent economic dislocation in Central America would give rise to demands for U. S. assistance far in excess of the amount needed by the company.

Mr. Dillon commented that this situation was one which the Reconstruction Finance Corporation might have been able to remedy, but that it was not clear that the U. S. Government now has a legal avenue by which it could come to the company’s aid with loans, either through existing lending institutions or through Mutual Security Act funds. Mr. Dillon said that the critical political and economic consequences of the bankruptcy of the company demanded that the Department investigate carefully every possibility by which the company could be aided. Mr. Barall said he would discuss the matter with the appropriate offices in the light of Mr. Dillon’s feelings, and communicate the results to Dr. D’Antoni on the following day.⁴

1. Source: Department of State, Central Files, 815.05111/11–3060. Confidential. Theodore L. Eliot, Jr., the Special Assistant to the Under Secretary of State, initialled his approval of this memorandum on December 2.
2. According to Chaplin’s memorandum of conversation dated November 28, 1960, D’Antoni had outlined the Standard Fruit Company’s financial problems to Assistant Secretary of State Mann and had raised the possibility of obtaining financial assistance for the company from the United States Government. In the course of this conversation, D’Antoni revealed that Standard Fruit was no longer able to secure financing from American banks, that the company had a $5.6 million note with the Chase Manhattan Bank that the bank was unwilling to renew, that Standard Fruit required $10 million in new financing to continue operations, and that he was meeting with Waugh on November 29 for the purpose of trying to obtain assistance from the Export-Import Bank. (Rubottom-Mann Files, Lot 62 D 418, “Honduras 1960”)
3. No memorandum concerning such matters has been found.
4. No record of such a communication from Barall to D’Antoni has been found in Department of State files.