814.504/5–2847

Memorandum by Mr. Robert E. Wilson of the Division of Central America and Panama Affairs28

The attached is the long-awaited reply of the Guatemalan Government29 to the memorandum presented to the Guatemalan Embassy on May 28, 1947, following Assistant Secretary Braden’s conversation with the Ambassador held on May 24, 1947. A copy and a translation of the Memorandum are being forwarded to the Embassy in Guatemala for its information and comment. Meanwhile, the following observations may be made:

It has been noted that with respect to Article 105, which provides for the creation of special Parity Commissions for Minimum Wages for individual companies having not less than 1000 workers and activities in various departments or economic areas, that according to the Report these commissions could not be set up unless the companies themselves specifically request it.

With respect to Articles 116 and 121 concerning the normal work day, work week for pay purposes, and overtime pay, establishing differences for the large agricultural companies, the Report seeks to justify these discriminations, referred to as “a greater economic burden”, on the grounds that because of their size they must have a more efficient organization and are therefore in a better situation to share with the workers their economic benefits, and it is asserted that greater economic capacity rightly carries with it greater social obligations, such obligations being adjusted more to the economic capacity of the giver than the needs of the recipient.

Referring to the provision of Article 238 which places the rural syndicates of the large companies on the same level as urban syndicates, in contradistinction to rural syndicates composed of workers of the smaller companies, the Report states that the limitation on the activities of the smaller companies’ rural syndicates is due to the fact that most of the workers, because of lack of education, have not yet reached a cultural level justifying their assumption of these activities, whereas, on the other hand, the large companies, because of their better organization, require a greater number of educated employees, [Page 715] resulting in a higher cultural level in their syndicates, justifying their assumption of the same activities as urban workers’ syndicates.

The exclusion of large agricultural companies from the classification of public services, for strike purposes, in Article 243, is admitted by the Report to be contradictory, but is held to be justified in the light of the fundamental principle of the Law, which is tutelary and devised to give labor a greater bargaining position in its deals with powerful companies which have economic advantages on their side.

In its summary, the Report asserts that the seemingly discriminatory features of the Law are consistent with the tutelary function of the state, but insists that the Law is not discriminatory against American firms in particular, or even foreign firms, since it applies equally to Guatemalan firms, whether private or public, and it provides the names of seven Guatemalan firms which are affected by it. Finally, it closes with the reassuring statement that “These measures cannot be cause for reasonable concern for foreign capital invested or about to be invested in Guatemala, or for national capital which is also affected, because the obligations they establish are reasonable and do not destroy the legitimate margin of profit to Capital.”

  1. Addressed to the Chief, Division of Central America and Panama Affairs (Newbegin), the Deputy Director, Office of American Republic Affairs (Woodward), and the Chief of Area Problems Branch, Division of International Labor, Social and Health Affairs (Fishburn).
  2. Memorandum from the Guatemalan Embassy dated September 16, 1947, with an attached Report rendered on September 5 by the Juridical Division of the Guatemalan Ministry for Foreign Affairs; neither printed.