Foreign Relations of the United States: Diplomatic Papers, 1942, The American Republics, Volume VI

814.24/339

Memorandum of Agreement Between Guatemala and the Rubber Reserve Company ³⁵

Guatemala, September 4, 1942

In the City of Guatemala, on this fourth day of September, one thousand nine hundred and forty-two, the undersigned, Arturo Andrés Bickford, acting in his capacity as Chief of the Section of Economic and Financial Coordination in Guatemala, party of the one part, and Ernest Golsan Holt, as special representative of the Rubber Reserve Company (an Agency of the Government of the United States of America, organized in conformity with the laws of that country, and with offices in the city of Washington, D.C.), party of the other part, duly authorized, enter upon the agreement contained in the following articles:

1. The Rubber Reserve Company, to effectuate the present agreement, will establish in Guatemala an Agency, which hereinafter will be designated simply “the Agency”.

2. The Chief of the Section of Economic and Financial Coordination in Guatemala, who hereinafter will be referred to simply as “the Coordinator”, especially delegates to the Agency the faculties conferred upon him by the Governmental decree dated the first of April of the current year, which relate to the purchase and sale of crude rubber and rubber products in Guatemala. For these purposes, the Coordinator confers upon the Agency all powers necessary for the best development of its activities; and empowers the Agency, through its own employees or its delegates, to buy, sell, and export all kinds of rubber or rubber products produced in the territory of the Republic of Guatemala.

3. The Coordinator recognizes the present necessity of the United States for rubber and rubber products for war purposes and grants to the Agency the right to export said products from the Republic of Guatemala, with the understanding that the Coordinator will supervise and control all exports effected by the Agency in accordance with the present authorization.

4. During the term of the present agreement, the rubber exported by the Agency will be free of all taxes now existing, or that may hereafter be established.

5. The Coordinator agrees to use his best efforts to obtain a maximum production of rubber and to promote in every way the sale of said product to the Agency as his delegate; he will also take all necessary measures for the best conservation of rubber and its employment in essential war uses. The Coordinator will also employ all means at his command to avoid the hoarding of rubber and rubber products.

6. The Rubber Reserve Company agrees that the Agency will buy and the Coordinator agrees to cause to be sold to the Agency all the rubber produced in the territory of the Republic of Guatemala that is not required by this country for its domestic use and consumption. The quantity of rubber (including the rubber contained in rubber products) required by the Republic of Guatemala for its domestic use and consumption is estimated at present at an amount not exceeding sixty-five tons per year; but it is understood that said amount may be increased by mutual agreement between the Agency and the Coordinator, if it is proven that such increase is necessary to meet the essential requirements of the country.

7. The Coordinator and the Rubber Reserve Company agree that the base price for the purchase of rubber under this agreement, which the Agency will pay, will be thirty-three cents United States currency per pound for rubber known in New York as Usual Good Quality Castilloa Scrap (rubber that contains no more than 25% moisture and impurities), f.o.b., maritime ports of the Republic of Guatemala, to be designated by the Agency. For rubbers of other types and qualities corresponding differentials will be fixed, and the base price of thirty-three cents per pound with the said differentials will be denominated “the fixed price”. The base price herein established may be modified after two years from the date of the present agreement, in order to adjust it to market conditions at that time, upon mutual agreement between the Rubber Reserve Company and the Coordinator.

8. The price that will be paid for the rubber purchased at points of delivery in the interior of the Republic will be the fixed price less transportation expenses to the port designated and all the other expenses to place the rubber aboard ship. The Coordinator will make known to the producers of rubber the total expenses that will have to be deducted from the fixed price, according to the points of delivery.

9. The price to be paid to the producers or their representatives for rubber shall be in cash at the points of delivery designated by the Coordinator in concurrence with the Agency.

10. The fixed price will prevail in the local market for the purchases, effected by the Coordinator, of rubber destined for domestic use and consumption.

11. The Rubber Reserve Company and the Coordinator agree that, during the term of the present contract, the Agency will invest the sums of money that may be necessary or desirable for the increase and development of the production of wild rubber in the Republic of Guatemala, as well as for the betterment of its quality.

12. The term of this agreement will begin with the present date and end on the thirty-first day of December nineteen hundred and forty-six; but the parties hereto, by mutual accord, may terminate it at any time.

In witness whereof we sign this agreement in six copies of the same tenor, three in the Spanish language and three in the English language.

__________________
Chief of the Section of Economic and Financial Coordination in Guatemala
__________________
Special Representative of the Rubber Reserve Company

35. Copy of the English text of the original signed at Guatemala, September 4, 1942, by Señor Bickford and Mr. Holt; this copy was transmitted to the Department by the Minister in Guatemala in his despatch No. 3195, September 11, 1942 (not printed).