Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

30. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Holland) to the Under Secretary of State (Hoover)¹

Washington, May 20, 1955.

SUBJECT

• Outline Plan of Operations for Guatemala²

Discussion:

The Outline Plan of Operations for Guatemala under NSC 5432/1³ is to be discussed at the OCB meeting on May 25. The salient feature of this Outline Plan is the conclusion that the collapse of the present Guatemalan Government would be a disastrous political setback for the United States and that we should therefore provide the emergency assistance necessary to keep the Castillo Armas Government in power. In order to rebuild Guatemala’s economic health and strengthen the prestige of the Government, it is proposed to: (a) complete the Inter-American Highway in three years (estimated cost to the U.S., $38,500,000); (b) give Guatemala economic development assistance to pay part of the cost of completing the Atlantic and Pacific Highways and other projects ($14,000,000 in FY ’56) and (c) supply funds to help equip the Roosevelt Hospital, a building with U.S. technical assistance since 1943 ($500,000). In addition it is hoped through the technical assistance program to help the Guatemalan Government modernize its administrative and financial systems as well as to improve agriculture, public health and education. The paper also urges that solutions be sought for the problems of the three major U.S. companies operating in Guatemala which will harmonize the interests of the U.S. investors with the nationalistic aspirations of the Guatemalans, and it recommends that we continue to assist in drawing up a new basic petroleum law.

In the field of public opinion our efforts should be directed toward overcoming the effects of Communist propaganda which for the past ten years systematically distorted U.S. motives, and towards insuring appreciation, both within and outside Guatemala, of the efforts of the Castillo regime to steer a moderate course. The paper also recognizes the importance of the military class and recommends greater efforts to insure their orientation towards U.S. concepts and objectives. It states that Guatemala should be drawn into the Hemisphere defense system but that primary emphasis should be placed on the maintenance of internal security.

I concur in the suggested courses of action which are in line with the policies we are currently implementing in Guatemala, and I make the

Recommendation:

That you move its adoption by the OCB.⁴

1. Source: Department of State, OCB Files: Lot 62 D 430, Guatemala, 1954–1955. Top Secret. Drafted by Krieg.
2. Not printed.
3. For text, see Foreign Relations, 1952–1954, vol. iv, p. 81.
4. At its meeting on June 1, the Operations Coordinating Board approved the Outline Plan of Operations for Guatemala under NSC 5432/1. (Department of State, OCB Files: Lot 61 D 385: Latin America) In a memorandum dated June 2, 1955, Deputy Under Secretary Murphy informed Holland of the OCB action, stating that Under Secretary Hoover expected the Bureau of Inter-American Affairs to implement the recommendations as they applied to the Department of State. (Ibid., Central Files, 714.00/6–255) In a letter dated August 2, Hoover forwarded to Ambassador Sparks in Guatemala City a copy of the Outline Plan of Operations. (Ibid., OCB Files: Lot 61 D 385, Latin America)