814.24/490
The Ambassador in Guatemala (Long)31 to the Secretary of State
[Received June 21.]
Dear Sir: I have the honor to refer to the Department’s Circular Airgram of June 7, 1943, 6:10 P.M.32 transmitting the request of the [Page 222] Board of Economic Warfare that the consent of the Country Agency in Guatemala be obtained to the issuance of export licenses by the Board of Economic Warfare in Washington for other than allocated materials although covering Import Recommendations for such may not have been issued by the Country Agency.
Import Recommendations have been issued in Guatemala in the period April 1 to date for commodities and materials whose shipping weight totals approximately 8,000 long tons, of which, according to latest advices, the Board of Economic Warfare has licensed approximately 650 long tons, leaving a backlog of such materials for immediate licensing and shipment of approximately 7,350 long tons. Current information on the backlog for Guatemala of licensed materials not covered by Import Recommendations is not available here, but it is apparent that such backlog must be in excess of 3,000 long tons, there being at least 1,500 tons of steel alone licensed but not yet shipped. Therefore, the unshipped backlog for Guatemala made up of licensed materials, plus unlicensed materials for which Import Recommendations have been issued, could scarcely be less than 10,000 gross tons, exclusive of materials for projects—a backlog which, under the existing estimates of supply of shipping for Guatemala, would be sufficient to fill ships destined} to Guatemala for more than three months. The existence of this backlog, together with the fact that the mechanical processes involved in the issuance of Import Recommendations in Guatemala have been so developed that all essential requirements are being promptly certified, leads to the conclusion that any temporary advantages to be gained from the large scale approval of applications for export licenses not supported by Import Recommendations, are far outweighed by the long-term disadvantages.
Decentralization Plan “A” was presented to the Government of Guatemala and accepted by that Government in the sense that it offered the best solution to the problems raised by critical shortages of supplies and shipping from the United States. Upon this premise the plan was announced and importers in Guatemala were informed that after the effective date, export licenses could not be obtained in the United States without the presentation of Import Recommendations issued in Guatemala. There followed a transition period during which personnel was recruited and trained in the details of the operation of the plan both by the Country Agency and by the Embassy. By various publications and countless individual interviews importers have been familiarized with the preparation of Import Recommendations, with the possible groupings of commodities, with the export aspects of the Controlled Materials Plan and with other regulations of the United States affecting export trade. As a result of these preparations officials of the Country Agency and of this Embassy now feel confident [Page 223] that no essential requirements in Guatemala will lack prompt documentation for want of any flexibility in the mechanics of the plan as operative here. Under these circumstances, to approach the Country Agency with the proposal that a substantial volume of applications for export licenses be approved in Washington without the support of Import Recommendations from Guatemala, would necessarily indicate to the Guatemalan Government either that the Board of Economic Warfare has been unable to implement Decentralization Plan “A” in the United States or that shipping has ceased to be a problem.
At this point attention is invited to this Embassy’s Airgram No. 307 of June 11, 1943, 4:45 P.M.33 and previous communications in connection with the specific problem that has arisen in respect to the proposal that import control over wheat flour be taken out of the hands of the Guatemalan Government.
For these reasons, it is deemed inadvisable in the case of Guatemala, and it may well be that a similar situation is applicable to the other Central American countries, to relax the operation of Decentralization Plan “A” until our Government is able to assure the Government of Guatemala that such a step is predicated upon a permanent improvement in the shipping situation. The content and purport of the Department’s Airgram under reference are, therefore, being withheld from the Country Agency pending the Department’s reconsideration of this problem in the light of the existing facts.
To assist the Department and the Board of Economic Warfare in its appraisal of the operation of the Decentralization Plan “A” in Guatemala, the enclosed tables33 are submitted. The enclosures portray the weekly progress of the Plan as recorded by this Embassy from the week ending May 22, a date seven weeks after the inauguration of the Import Recommendation procedure, which date was taken as an arbitrary fixture for beginning a regular analysis of the mechanics of this Plan by this Embassy.
It will be noted that as of June 12 the Country Agency in cooperation with this Embassy has examined 3,600 applications for Import Recommendations, had issued 2,507 Import Recommendations and that the shipping tonnage represented by these documents amounted to 7,693 long tons, Table 2 enclosed. Since the 12th of June additional documents have been issued and more shipping tonnage has been allocated.
An analysis of the data available here on the shipping that has actually been landed in Guatemala indicates that the cargo tonnage that was received per month by Guatemala in the months of February to May inclusive, surpassed by a substantial margin the target tonnage [Page 224] figures prepared by the Board of Economic Warfare and the War Shipping Administration and reference is made for purposes of illustration to Table 3 enclosed.
Respectfully yours,
Acting Commercial Attaché