814.51/578
The Minister in Guatemala (Geissler) to the Secretary of State
[Received May 2.]
Sir: I have the honor to report, that, pursuant to the Department’s cablegram 22 of April 8, 3 p.m., I have indicated to British Minister Clark Kerr and to Mr. J. P. Armstrong, representative of the bondholders, that I shall be glad to assist in any proper way in arriving at a satisfactory adjustment of the matter of the deferred coupons of the so-called British Debt, pending between the bondholders and the Government of Guatemala, and that they expressed appreciation, and said, that, after, about thirty days hence, the Legislative Assembly will have adjourned and perhaps a decision reached as to whether Mr. Baudilio Palma is to remain as Secretary of the Treasury or somebody else be appointed in his place, they will press for action, and that then, if satisfactory results are not soon obtained, they will request me to convey to the Government of Guatemala the view of the Department of State, as set out in its communication to the British Ambassador in Washington, to the effect that the United States would be glad to see a suitable settlement in the interest of both parties.
During a conversation I had with those gentlemen, at this Legation, on April 20, I showed Mr. Clark Kerr a transcription of the Department’s reply to the British Ambassador, as quoted in the above-cited cablegram of April 8, 3 p.m., and, at his request, I gave him a copy thereof.
Mr. Armstrong said, that the present status of the matter is, that there is pending the proposal of the bondholders, that the Government [Page 33] refund the certificates through the issuance of four percent bonds payable within thirty years; that it seems, that neither the Secretary for Foreign Affairs nor the Secretary of the Treasury has studied the problem; that, furthermore, those officials are afraid of opposition by the Legislative Assembly; that, however, he believes, that when that body has adjourned, it should be possible to effect an agreement, substantially on the abovementioned basis. Mr. Kerr indicated, that he shares that view. I expressed no opinion concerning those proposed terms, nor as to the degree of possibility of their being accepted. It did not seem opportune to do so. However, if I understand correctly the attitude of Guatemalan public men, as expressed from time to time in unofficial conversations concerning the subject, they will not consider a proposal on that basis seriously.
I suggested to the British Minister and Mr. Armstrong, that it would be best not to let it become known that the Legation is disposed to aid in the matter of arriving at an adjustment, unless and until they find it desirable for me to speak to the Secretary for Foreign Affairs.
I have [etc.]