Created: 7/22/1954

OCR scan of the original document, errors are possible


: Memorandum of Conversation vlth Mr. Joe Montgomery and Kr. Thomea Corcoran of Tha United Fruit Company Prosent at nesting onuly vera Hr. Montgomery, Mr. Corcoran and Col. King.

1. Mr. Corcoran opened the converaatlon by saying that Mr. Montgomery had Juat arrived from Central America and vould like to report on recent eventa and hla. Mr. Montgomery aald:

A. He hadatlafactory settlement vlth tba United Fruit Co. vorkers In Honduras, and that thia vould remain in effect until the nev government, vhlch vill take office inasses certain proposed social legislation.

The period of tranquility is estimated at approximately one year.

B. President Gal vet shoved himself toan of courage vlth considerable Iron la his backbone during tba critical period after the uprising began In Guatemala. While the outcome vaa in doubt he strongly resisted all pressure to turn against Castillo. Gel vet Is new feeling very happy and much relieved. Valenzuela, the Foreign Minister, vaa veak and of no help at all.


oastillo vaa not actingthe appointment of his people to keyparticular be vas delaying too long in selectingof the Security Police. It vas only afterto Peurifoy at the

C. Somoza bad planned to move against Figueroa immediately after Castillo's aucoasa in Guatemala and vaa only prevented from doing so by Washington. Be still intends to moveore opportune moment.

D- MontgomeryGuatemala City onh

and found him much dlsturbea about the future becausen his opliujlon Castillo vaa not acting promptly enough in tha appointment of his people to key positions. In particular be vaa delaying too long inead of the Security Police. rent to Peurifoy


In turn spoke to Castillo, that Col. Mendoza waa made the head of the police. Col. Mendoza la coneldered an excellent selection.

The fact that almost all the leading Cosunles were successful in taking asylum In the Mexican and other embasalea instead of being caught and thrown In Jail, lehreat to future stability. There is talklandestine radio in tbe Mexican Embassy being used for their purposes.

There Is no criticism however, of the speed with which

the minor Commies were rounded up nor with the number who are In jail.

1. Mr. Montgomery said be had heard that Col. Horizon vaaa good man althoughsome doubts about him.

3. Mr. Corcoran then got tom sure was the naln reason for today's visit. He said be bad never seen anythingimed than the announcement of the anti-trust suit against the United Fruit Co. as It weakened their bargaining position vlth the Hoodurans since it vaa announced prior to the settlement of the strike, snd would undoubted*)raake things more difficult In Guatemala. He compared tbe suit agalnat the Fruit Co. at this time vlth tbe breaking up of the old Austro-Bungarlan Empire vtaen there vas nothing good to ropJa.ce it at the end of World War I. He Indicated that the breaking up of the Fruit Co. vouldhaotic situation. He vented to knov what guidance oould be given to Mr. Montgomery because of the political importance of all Central America, and Kr. Montgomery added that he vould like to knov If tbe Fruit Co. were considered expendable. They had heard on tho Hill, prior to tho up-rising in Guatemala, that CIA vould bring about the fall of Arbenz and then see that the blame fell on tbe Fruit Co. eplied that tbeeard of the anti-trust suit vasead about it on the front page of the Washington Post, that nothing had come to me since,as sure CIA had nothing to do about It,id not believe the Fruit Co. waaexpendable. sked Mr. Montgomery whether be still planned to carry out various of the steps be had promised to make In Guatemalaemocratic government cams Into power. lie replied that such vas still his intention, and among other things he had In mind turning over tba railroad. However, he did not vlsh to do thia Inay that everyone vould say tbe Fruit Co. was responsible for tbe revolution, and that be was avaltlng an invitation initiated by Castillo to discuss arrangements. Another step vould be to give Guatemala an Increased share of the profits. tated that since be waarame of mind to be on the giving rather than the collectingid not see vhy bo was too concerned about any charges of complicity in tbe revolution because it would appear more natural. If that were so, for them to be reoolving rather than turning over the railroad. aid that thereecent cartoon (and described

the one ofaysbout second chances, and that this seemed the opportunity they had long been waiting for to do thingseasonable government which we all hoped that of Castillo's would be. Mr. Montgomery agreed and said he felt that the outcome could builduch more favorable impression of the Fruit Co. in tha Caribbean. Mr. Corcoran then said he had not been able to find out who was responsible for the suit, that Henry Holland said he had nothing to do with it, the Secretary of State said he was not responsible, that others with whom he talked all declined to accept responsibility. aldad no idea who was behind it exceptished toas quite cortain the Agency had nothing to do with it because this was not our business, and that if he wished to discuss the political implications in otherelt the proper place to make hie facto known was with the Department

of State.

ft C. KJJW -Chief, VH/

Original document.

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