314.115C43/42

The Minister in Guatemala ( Geissler ) to the Secretary of State

No. 2016

Sir: I have the honor to report, that, as a sequel to the conversation covered by despatch 2013 of July 7, 1928,5 Minister for Foreign Affairs Salazar, on June 27, suggested, that I act “as a sort of unofficial arbitrator” in the matter of the controversy between the Government of Guatemala and Mr. P. W. Shufeldt, regarding his chicle concession; that I informed him, that I prefer not to act in that capacity; that, on July 6, I expressed to Mr. Salazar, unofficially, the hope that it will be possible to effect an adjustment of that controversy, at an early date, either through direct negotiation or with the aid of somebody chosen by the parties to mediate or arbitrate, and that today I asked him, orally, whether it is true that, as reported, the Government contemplates, without further procedure, to grant licenses to other persons to extract chicle in the territory covered by the Shufeldt concession.

It will be recalled, that, about three weeks ago, Mr. Wilson, representative of Mr. Shufeldt, told me, that he had talked with the Minister of Agriculture about a plan under which Mr. Shufeldt would renounce his contract and all claims upon payment of $100,000., and that Mr. Wilson said, that he would recommend acceptance, if the Minister makes a definite offer to that effect.

On June 21, Mr. Wilson called at the Legation and requested Secretary of Legation Hawks to inform me, that the Minister of Agriculture had offered $80,000; that he, Mr. Wilson, had said that he is sure that Mr. Shufeldt would not accept and that the Minister of Agriculture had then suggested that Mr. Wilson try to get the American Minister to persuade Mr. Shufeldt to accept, which Mr. Wilson had declined to do. See enclosure No. 1.5

I transmit herewith memorandums of my above-mentioned conversations of June 27 and July 6, with the Minister for Foreign Affairs.6 They have both been read by Mr. Wilson.

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I have told Mr. Wilson, that I am not inclined to undertake to arbitrate or even to mediate in the matter, without specific instructions from the Department. He says, that he appreciates my disinclination to arbitrate, but would like for me to participate in the negotiations between him and the Minister of Agriculture. I stated in reply, that I feel, that it may prove to be possible to effect a satisfactory arrangement with the Minister of Agriculture without direct participation by the Legation.

This morning Mr. Wilson told me, that he had heard, that the Minister of Agriculture has prepared a set of regulations, to be submitted to a cabinet meeting this afternoon, under which the Government would sell permits for the extraction of chicle in the territory heretofore worked by Mr. Shufeldt. He said, that the Government contemplates granting individual licenses to about 500 chicle gatherers who, it is thought, would then at once proceed to get busy, without recourse to any court procedure to test their right. Mr. Wilson was anxious to have some sort of action taken immediately.

I called on the Minister for Foreign Affairs and asked him, whether that report is true. Mr. Salazar stated, that he had heard, that the Minister of Agriculture is preparing to take some sort of action with reference to that territory, but that he did not know just what is contemplated. I inquired, whether, under the constitution and laws of Guatemala, it would be appropriate for the Executive to grant authorization for the seizing of property which is in the possession of another. Mr. Salazar thought, that it might be said, that, under the contract, Mr. Shufeldt never had possession, but only a right to extract chicle. I replied, that my information is, that, in 1922, the then Minister of Agriculture had held, in writing, that the right of Mr. Shufeldt to extract chicle in that zone is exclusive, and that it seems to me, that it may be asserted by Mr. Shufeldt, that he has possession of all chicle trees in that territory for the purpose of extracting chicle therefrom, and that the action of the Government in licensing other persons to extract chicle from those trees might well be construed as authorization to take those trees from Mr. Shufeldt by force, and that it seems to me, that it might be well, for his office to consider whether such action would be legal and constitutional.

Mr. Salazar said, that he would take the matter up this afternoon with the Minister of Agriculture. He remarked, that he had hoped, that, before other licenses were granted by the Government, a mutually satisfactory agreement would be effected between the Minister of Agriculture and Mr. Shufeldt, but that the latter’s representative, Mr. Wilson, is too exacting. I made the observation, that the Minister of Agriculture, Mr. Shufeldt and Mr. Wilson are all [Page 127] of them good traders, and that therefore it should still be possible for them to come to an agreement.

I reported that conversation, orally, to Mr. Wilson, who expressed himself as being very much pleased with what I had done.

I have [etc.]

Arthur H. Geissler
[Enclosure]

Memorandum by the American Minister (Geissler) of a Conversation With the Guatemalan Minister for Foreign Affairs (Salazar)

The Minister for Foreign Affairs stated to Mr. Geissler, that, at a recent meeting of the Cabinet, some members had indicated, that, rather than for the Government to have controversy with Mr. Shufeldt, in the matter of his concession, they would be disposed to pay him a reasonable sum; that Mr. Wilson, as representative of Mr. Shufeldt, had told the Minister of Agriculture, Mr. Solorzano, that Mr. Shufeldt would accept $100,000.00; that the same Ministers think that amount too high; that, without conceding that the Government is legally liable for any amount, he would like for Mr. Geissler as a sort of an unofficial arbitrator, to say what, if anything, the Government should, in justice, pay to Mr. Shufeldt, in full satisfaction of all claims he may have.

Mr. Geissler replied, that he appreciates very much the confidence implied in the suggestion of Mr. Salazar, but that, under the circumstances, he prefers not to act in that capacity.

(The original of the foregoing was handed to Minister for Foreign Affairs Salazar, by Mr. Geissler, on June 28, 1928. After reading it, Mr. Salazar pronounced the Memorandum correct.)

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