1. In Guatemala Communism has achieved its strongest position in Latin
America, and is now well advanced on a program which threatens important
American commercial enterprises in that country and may affect the
stability of neighboring governments. Continuation of the present trend
in Guatemala would ultimately endanger the unity of the Western
Hemisphere against Soviet aggression, and the security of our strategic
position in the Caribbean, including the Panama Canal.
2. Communist strength is derived from control of positions of influence
and power in the labor movement, in the pro-Government political
parties, and in the Government itself which, though not Communist,
tolerates and encourages Communist support as useful to its own social
program. The Communists have succeeded in identifying themselves with a
nationalistic, leftist revolutionary movement that began with the
overthrowing of a military dictatorship in 1944, and they have crippled
their opponents by ranging the full strength of the Government’s
coalition against them. The Guatemalan Army, in which ultimate power
resides, has displayed indifference toward growth of Communist
influence.
3. The immediate Communist objective is the elimination of American
economic interests, represented in Guatemala by the United Fruit
Company, the International Railways of Central America, and the
Guatemalan Electric Company. The loss of these enterprises would be
damaging to American interests and prestige throughout Central America,
and a severe setback to programs for economic development in the
hemisphere through private capital investment.
4. The underlying Communist objectives in Guatemala are to prevent
collaboration of that country with the United States in event of future
international crisis, and to disrupt hemisphere solidarity and weaken
the United States position. The Communists are not seeking
[Page 1075]
Open and direct control of
the Guatemalan Government, at the present time, but are working to
convert it into an indirectly controlled instrument of Communism.
5. Communist success in Guatemala thus far does not constitute a direct
military or economic threat to the United States; but the uninterrupted
trend in its favor is of serious concern to our interests and future
security and requires determined study of means to reverse it.
6. The objectives of the United States with respect to Guatemala are:
7. The United States should seek to increase to the maximum the
likelihood of prompt and effective collaboration by Guatemala in event
of war or major international emergency by:
8. The United States should bring pressure on the Guatemalan Government
to take effective action against Communist influence in the country and
abandon its unfriendly attitude toward the United States by:
9. The United States should seek to prevent the spread of Communist
influence from Guatemala to other countries in the hemisphere by:
10. The United States should seek establishment in Guatemala of favorable
conditions for the conduct of business by United States interests on
mutually advantageous terms by:
11. The United States should seek establishment of conditions favorable
to Guatemalan participation in hemisphere defense plans by:
Annex
Staff Study
general considerations
1. Guatemala is the northernmost and third largest of the five small
republics between Mexico and Panama. It is roughly 1,000 miles south
of New Orleans and 750 miles northwest of the Panama Canal. Over
half of its 2,900,000 people are Indians who participate only to a
limited extent in the money economy and political life of the
nation. Guatemala is predominantly an agricultural country, and
although well endowed by nature for producing a variety or crops,
its economy is still heavily dependent on coffee.
2. In terms of its own resources and manpower, the contribution that
Guatemala can make toward United States security is slight. Although
useful sources of a few strategic materials might eventually be
developed, present production of such products is of negligible
importance to this country. In the event of war, Guatemala, as in
the last conflict, could provide the United States with the site for
an air base at Guatemala City, but the greater range of modern
aircraft may have considerably diminished its present or future
usefulness to us. The International Railways of Central America,
though of possible value as a trans-isthmian route in event of
destruction of the Panama Canal, is a narrow gauge (36′′)line of
limited capacity, easily sabotaged, and has only open roadsteads at
the Pacific termini.
3. Guatemala could endanger United States security, however, were it
to give refuge or aid to enemy saboteurs and propagandists, or were
it to allow use of its airfields, ports and other facilities and
resources by an enemy power. Sabotage to airfields and military
installations would be of importance only in relation to the degree
to which these
[Page 1079]
are built
up and used by United States forces in event of war. Sabotage
against the railroads and other United States-owned commercial
interests would injure the Guatemalan economy far out of proportion
to the adverse effect on the United States war potential. Since
Guatemala would be incapable of resisting a strong attacker, denial
of Guatemalan facilities and resources to an aggressive enemy power
would necessarily fall to the United States. Should the Guatemalan
Government assume a hostile attitude in an emergency, the United
States could secure the airport and other strategic points against
its forces with a battalion or two of well-trained troops.
4. Guatemala is of special importance to the United States primarily
for having provided the leading example of Communist penetration in
the American Republics. This situation tests our ability to combat
the eruption and spread of Communist influence in Latin America
without causing serious harm to our hemisphere relations. It may be
assumed that fundamental Communist objectives in Guatemala include
the following: (a) to prevent collaboration between that country and
the United States in time of future emergency, (b) to encourage the
growth of Communism elsewhere in Latin America, and (c) to provoke
the United States into action which would be contrary to our
Inter-American commitments and which would injure hemispheric
solidarity.
5. The principal subsidiary problem facing the United States in
Guatemala concerns treatment of private United States interests.
Influenced by extreme nationalists and Communists, the Guatemalan
Government has begun expropriation of substantial United
States-owned assets in the country, having for several years
followed a policy of increasing hostility and harassment toward the
principal American companies operating there. These are the United
Fruit Company; the International Railways of Central America,
(partially owned by the former); the Empresa Electrica de Guatemala,
(owned by a subsidiary of the Electric Bond and Share Company); and
Pan American Airways. All but the last named have large capital
investments in Guatemala. The crippling or expulsion of these
American enterprises would adversely affect the position of United
States commercial interests elsewhere in the hemisphere, and would
produce a number of subsidiary but troublesome local problems, such
as securing just compensation for property seized.
6. Communist influence in Guatemala grew up in the aftermath of the
Revolution of 1944, which brought an end to the latest of the
country’s many military dictatorships and replaced it with a
liberal-minded administration which promised quick change. Initial
popular enthusiasm for the 1944 revolutionary movement attested to
the depth
[Page 1080]
of discontent
with the political repression, social backwardness and “economic
colonialism” which had been the pattern of the past.
7. The Administrations of President Arevalo
(1945–51) and President Arbenz (1951–), in frustration at the frictions
caused by their own ignorant tampering with the national social and
economic structure, have attempted to shift responsibility for
Guatemala’s difficulties to forces outside its borders. Exploiting
nationalist sentiment to the utmost, they have insisted that
Guatemala is the victim of a conspiracy directed by the United Fruit
Company which is determined to prevent the betterment of the
Guatemalan people.
8. Communists ably supported Arevalo and
Arbenz in their attacks
on “economic imperialists” and in their efforts to legislate sudden
reform. The Communists identified themselves with every aspiration
of the revolutionary administrations. Toleration of Communist
activity which characterized the early years of the
Arevalo administration developed into an
effective working alliance between the Communists and Arbenz.
9. Key to present political
tensions in Guatemala is the Agrarian Reform Law, enacted in
mid-1952 and described by President Arbenz as the most important measure of the
Revolution. This law provides for the expropriation of large tracts
of unused land and their distribution to the peasants. Although
presented as a long-overdue measure of social and economic reform,
the law has strong political motivation and significance. Its
drastic provisions are designed to produce social upheaval rather
than to execute any economic plan. Communists and fellow travelers
instantly seized the opportunity afforded them by the
Administration’s proposal to institute agarian reform. They played a
leading part in the preparation and enactment of the agrarian law.
They have infiltrated the National Agrarian Department established
to administer it, and have incited disorderly peasant seizures of
privately owned lands. The Agrarian Reform Law is being used to
attack the United Fruit Company, to destroy the political
effectiveness of the large landholders, and to mobilize the hitherto
politically inert peasantry in support of the regime.
10. Militant Communists in Guatemala are estimated at a few hundred.
Of these perhaps two or three dozen are dangerous leaders or
agitators. Almost without exception they are indigenous to the area
and are Mexico-trained rather than Moscow-trained, although some
have visited the Soviet orbit and may have received brief
instruction there.
11. The Communists have achieved their present political influence in
Guatemala, not as a political party competing with others, but
through personal influence with the President and through the
coordinated
[Page 1081]
activity of
individual Communists within the leftist political parties and labor
unions which emerged from the Revolution of 1944.
12. With the assistance of the Government, Communist and
Communist-influenced labor leaders have been the most successful
organizers of Guatemalan labor. Their formation of the General
Confederation of Guatemalan Workers (CGTG) and Government pressure
for labor unity have facilitated the extension of their control over
all organized labor. The Communists are seeking to mobilize the mass
of rural workers through the CGTG and the National Confederation of
Guatemalan Peasants (CNCG), in which they exercise a strong
influence. The basic weakness of Guatemalan Communist labor
leadership is that it is imposed from above through top control of
the machinery or labor organization and cannot be sure of rank and
file support.
13. Through their leadership in organized labor and their influence
with the President and within the pro-Administration political
parties, the Communists have gained many positions of influence
within the Government: In Congress (where they dominate the Special
Committees on Agrarian Reform and Labor Code Revision), in the
National Electoral Board, the National Agrarian Department, the
Institute of Social Security, the Labor Courts, the Ministry of
Education, and the Presidential Secretariat of Propaganda, and in
the official and pro-Administration press and radio. Their influence
is extended by an indefinite number of Communist sympathizers in
similar positions. At the same time, no Communist holds any position
of Cabinet rank and the Communists appear to have made little or no
effort as yet to infiltrate the Police or Army.
14. Opposition to the Arbenz
regime is disorganized and ineffective. There is no likelihood it
could alter the course of the Government by political action. It
could not succeed in a revolutionary attempt opposed by the
Army.
15. The Governments of El Salvador, Honduras, and Nicaragua are
fearful that the trend in Guatemala will lead to Communist
subversion and social upheaval in their territories. They are
probably giving serious consideration to clandestine support of
revolutionary action in Guatemala. It is highly unlikely, however,
that they would or could mount an open military intervention against
Guatemala. The Guatemalan Army could probably defeat any force which
they could deploy against it.
16. The Army is the only organized element in Guatemala capable of
rapidly and decisively altering the political situation. There is no
reason to doubt that President Arbenz still has the loyalty of the Army, which has
taken its lead from him and thus far refused to concern itself over
the growth of Communist influence in political life.
[Page 1082]
17. It is possible that President Arbenz thinks of the Communists in Guatemala only as
reformers and useful allies rather than as Soviet agents. Since he
has no support of consequence from any propertied interests other
than those created by the Revolution, he is probably unwilling to
repudiate the Communists and risk the loss of much of his organized
political backing. Therefore, even though Arbenz still exercises personal
control of the Administration, the Army and the Police, and could
break his ties with the Communists and moderate the policies of the
Government, it is not likely that he will voluntarily do so under
present conditions.
18. In addition, Arbenz and
other Government leaders, as officials of a small country near the
United States who feel some resentment against it for one reason or
another, may tend to find satisfaction in deliberately affronting
the United States by showing friendliness to Communist leaders and
in observing the attention aroused by their attitude. In any event,
Guatemala’s protestations of friendship with the United States have
thus far been given against a background of official Guatemalan
encouragement to Communist activity.
19. On the other hand, there are certain factors which would impel
most Guatemalans, possibly including President Arbenz and other non-Communist
Government officials, to identify Guatemala’s ultimate interests
with those of the United States rather than the USSR and to desire
to cooperate with the United States in controlling enemy saboteurs
and propagandists in event of war or major international crisis.
These factors are: (1) Guatemala’s western cultural and political
orientation; (2) Guatemala’s proximity to and economic dependence on
the United States; and (3) the fact that the United States has built
up in the American Republics, especially in the Caribbean area, a
great reservoir of fundamental good will through our policies of
non-intervention, respect for juridical equality and abnegation of a
position of privilege.
20. Notwithstanding the disturbing amount of Communist influence in
Guatemala, its Government still votes with the free world on most of
the substantive issues between it and the Soviet bloc. There are
certain other small signs of its continued willingness to remain in
our camp, such as the fact that our Military and Air Missions are
still operating in Guatemala.
21. Nevertheless, any likelihood of voluntary cooperation by the
Arbenz Government with
the United States in a future crisis would vanish (a) if the Communists in the Administration should
overpower it completely, or (b) if President
Arbenz should meanwhile
conclude that all means of reaching an understanding with the United
States were closed, and commit himself to a policy of frank
hostility toward this country.
[Page 1083]
22. Our present position in Guatemala is progressively deteriorating.
Politically, Communist strength grows, while opposition forces are
disintegrating; economically, American enterprises suffer continuous
whittling away of their properties and contractual rights, while our
remonstrances are rejected. Ultimate Communist control of the
country and elimination of American economic interests is the
logical outcome, and unless the trend is reversed, is merely a
question of time. In seeking means to reverse this trend, we must
consider:
-
a.
- A policy of non-action would be suicidal, since the
Communist movement, under Moscow tutelage, will not falter
nor abandon its goals.
-
b.
- Ineffective defense of American enterprises will be
followed by similar attacks on these same companies in
neighboring countries, and subsequently on other U.S.-owned
industries in other Latin American countries.
-
c.
- A solution of the Guatemalan problem by means repugnant to
the rest of Latin America might cost more than it would be
worth, as it could create a larger problem with the
hemisphere than we would have ended with one country.
-
d.
- Any solution will depend on our action, since other
American republics have neither the capacity nor decision to
act.
alternate lines of policy
23. The United States could follow one of four general lines of
policy with respect to Guatemala:
-
a.
- Policy of direct intervention. Militarily, Guatemala would
be defenseless against direct United States action.
Imposition of unilateral economic sanctions, if mechanism to
enforce them were made available, would at least cause a
drastic and no doubt painful shift in the flow of
Guatemala’s trade, since the United States takes 85 percent
of Guatemala’s exports and supplies 60 percent of its
imports. However, the use of direct military or economic
sanctions on Guatemala would violate solemn United States
commitments and under present circumstances would endanger
the entire fund of good will the United States has built up
in the other American Republics through its policies of
non-intervention, respect for juridical equality, and
abnegation of a position of privilege. Loss of this good
will would be a disaster to the United States far
outweighing the advantage of any success gained in
Guatemala.
-
b.
- Policy of covert intervention. Our secret stimulation and
material support of the overthrow of the Arbenz Government would
subject us to serious hazards. Experience has shown that no
such operation could be carried on secretly without great
risk of its leadership and backers being fully known. Were
it to become evident that the United States has tried a
Czechoslovakia in reverse in Guatemala, the effects on our
relations in this hemisphere, and probably in the world at
large, could be as disastrous as those produced by open
intervention.
-
c.
- A policy of inaction. The United States could allow events
to take their course in Guatemala in the hope that the
problem will solve itself, possibly along the lines of the
Mexican Revolution, which also had Communist backing for
land “reform” and foreign expropriation. This is obviously a
false hope in the existing context of world affairs, and
disregards both the importance of Communist penetration and
the certainty that the United States must aggressively lead
the fight against it wherever it appears in the
hemisphere.
-
d.
- Policy of firm persuasion. As long as the Government of
Guatemala cooperates with the Communists we should decline
to cooperate with it. The United States should adopt courses
of action which will oblige the Guatemalan Government to see
for itself that its persistence in favoring the Communists
will lead the country to ruin; and which will induce it to
recognize the advantages of cooperating with the United
States. In exploiting all the possibilities of this policy
we should endeavor in all appropriate ways to bring the
pressure of Latin American public opinion to bear upon the
Guatemalan Government and people; we should encourage ODECA in its moves aimed at
the Communists in Guatemala; and, if and when it occurs that
a case has been developed which will command support from a
majority of the OAS, we
should initiate or support OAS action against Guatemala. If direct
unilateral action should become necessary in a future
emergency, the Arbenz
regime could easily and quickly be overthrown possibly with
less Latin American opposition than we would encounter under
present conditions, and very possibly with Latin American
support. Meanwhile, we must recognize realistically that our
present policy of firm persuasion, though avoiding an
outright break with the Guatemalan Government, has not
deterred it from its stated course.
Courses of Action
24. Although Arbenz is
sensitive to pressure exerted by the United States, he will resist
it without regard to practical consequences wherever he believes he
can gain political advantage by so doing. This makes execution of
our policies a delicate and dangerous matter.
25. We have frankly discussed the Communist problem with high
Guatemalan officials in Washington and in Guatemala. They have
brushed aside our views on Communist influence in the country as
exaggerated. They have described the Communist issue as a false one
fabricated by the United Fruit Company. We must continue, however,
in the effort to dispel the illusions of anyone in the Guatemalan
Government who believes the Government’s official version.
26. We have for some time withheld virtually all cooperative
assistance from Guatemala. The exceptions have been a reduced
Technical Assistance Mission (engaged in three small projects begun
during World War II) which we have desired to maintain at a minimum
level as a toe-hold pending improvement in political conditions; and
our military and Air Force Training Missions, which we have desired
to keep friendly United States contact with the politically
important officer corps.
[Page 1085]
27. The withholding of other favors has proven effective in
demonstrating to the Guatemalan Government the seriousness with
which we view its cooperation with Communism, and the policy should
be continued. However, consideration should be given the
alternatives of withholding or granting our cooperative assistance
in completion of the Guatemalan sector of the Inter-American
Highway.
28. Guatemala has formally offered to enter into an agreement with
the United States for the continued cooperative construction of its
sector of the Inter-American Highway, making all of the assurances
required by law for the expenditure of United States funds. We have
already made such agreements with El Salvador, Nicaragua, Costa
Rica, and Panama. On the one hand, our refusal to resume cooperation
with Guatemala on the Highway will constitute the most forceful
measure available to us under the policy of withholding favors, as
it is the one most urgently desired by Guatemala. On the other hand,
it would be in our interests to conclude a cooperative agreement
with Guatemala for construction of the Highway, for the following
reasons:
- (1)
- It is the only means of insuring that the
as-yet-unconstructed 25-mile gap immediately adjacent to
Mexico will not become a serious bottleneck for the entire
Central American portion of the Highway. Guatemala will
sooner or later attempt to build this section itself if we
fail to enter into the agreement, and will probably exercise
its consequent freedom to place on it the special tolls or
other restrictions which would be expressly forbidden under
the terms of the agreement.
- (2)
- It would open Guatemala and the rest of Central America to
Inter-American Highway traffic which is now unable to pass
beyond the Mexico–Guatemala border because of the gap on the
Guatemalan side. This would stimulate extensive tourist
travel and commercial movement on the Highway between the
United States and Guatemala and would to that extent
increase beneficial United States influence in
Guatemala.
29. Careful study should be given the concluding of Military Defense
Assistance Pacts with El Salvador, Nicaragua, and Honduras.8 Exclusion of
Guatemala would have the practical effect of emphasizing to the
Guatemalan Army the disadvantage to it caused by the Government’s
friendliness toward Communism. To be weighed against this is the
risk that conclusion of the pacts might stir nationalist feeling in
Guatemala and strengthen rather than diminish Army support of the
Arbenz regime. An
additional difficulty is the apparent disinclination of El Salvador
and Honduras to conclude such agreements. A pact with Nicaragua
should be pushed as a first step toward bracing Guatemala’s
neighbors with our military support.
[Page 1086]
30. Pending the conclusion of Military Defense Assistance Pacts which
would enable the United States to give military grant-aid to El
Salvador, Nicaragua, and Honduras, we should make arms and materials
available to them by direct purchase under Sec. 408(e) of the Military Defense Assistance Act, in
order to help strengthen those militarily weak governments against
Communist subversion and pressure from Guatemala.
31. The United States should continue to refuse to sell arms and
materials to Guatemala under Sec. 408(e) of
the Military Defense Assistance Act, and to continue to deny export
licenses for other arms and materials sought in this country for the
Guatemalan Armed Forces. This policy should be enforced so long as
they are loyal to the Communist-influenced central authority and
hence likely to employ their weapons against anti-Communists. It is
recognized that the withholding of arms will necessarily impede the
functions of the United States Military and Air Force Missions in
Guatemala. We should consider occasional approval of export licenses
for materials other than military arms and ammunition should it
appear in specific cases to be in our interest to do so.
32. An arraignment of Communist penetration in Guatemala and from
Guatemala to other American Republics should be prepared for use in
the event that OAS action appears
feasible and practicable. The United States should assist by
developing a factual case record of specific evidence of (1)
Communist influence in the Government; (2) encouragement or
toleration by the Government of Communist elements who are acting or
appear to be acting under Kremlin directives,
and (3) encouragement or toleration by the Government of attempts at
subversion of any other American Government. This case record should
be kept under constant review in order to determine whether or when
its nature is such that its presentation in the OAS would gain sufficient support from
the other American Republics to assure that collective
inter-American action will be taken to achieve the elimination or
marked diminution of Communist influence in Guatemala.
33. Many of the difficulties encountered by United States commercial
interests in Guatemala are the direct work of Communists, but
certain problems would remain even after elimination of their
influence. Deep-rooted nationalist feeling will remain an obstacle
to the solution of some of the principal ones. We should encourage
the United Fruit Company, the IRCA,
and the Empresa Electrica to negotiate with the Guatemalan
Government, whenever that Government is disposed to enter such
negotiations in good faith, with a view to revising their concession
contracts in such a way as to diminish nationalist prejudices
against the companies and at the same time obtain from the
Government satisfactory assurances of reasonable treatment of the
companies.
