Created: 6/7/1954

OCR scan of the original document, errors are possible





SUBJECT: Meeting with Mr.*

1. Mr. Holland reported the prepared press conference with the Secretary icheduled fort which time the Secretary willuestion on the UFCO which will permit hia to say that the Government had endeavored to see that the UTCO-Guatemala financial dispute ahould te negotiated, but that It was the Ouateaalane who did not want the matter to be settled; thus clalme that the dispute with Guatemala are based on IfFCO matters are falsethe dispute ln fact Is one with rocmc-nlsm and nothing else. Mr. Holland elatedimilar line would be taken ln the Secretary's Seattle speech June 9.

Mr. Leddy confirmed that he waa coordinating the matter of the cables describing documentation on the OERAR eras shipment.

Ecuador, It was reported, la likely to oppose the OAS meeting Means for Influencing Ecuador's poaltion vera dlaeueeed.

fc' Mr- Holland discussed the probabilities that the Guatemalan government might, at some time In the near future, attempt toase to the Security Council. It was concluded that such en action

be damaging because (a) our strength at the DM Is sufficient so that on this Issue tbe Guatemalans would find themselves Isolated with only Soviet and satellite support, and (b)ovewould enable ua to point out that thisy-paaaing ofront to the lnter-Amerlcan system.

5- Mr. Leddy reported that tbe Department la at this momentm result In the separation of Jorge Torlello from. financial affiliation, particularly Vestinghouse.

6. The desirability of Mrs. Roosevelttatement on communis, in Guatemala waa discussed, and it was concludedove la this direction ahould be taken only with the Secretary's foreknowledge and approval. ,

7" ck of precise information on the nature of the AI.PHEM arms

l8ht of th* contmuance of the Military Miselon to Quateaale. Mr. Holland decided againelegram should be sent to Ambassador Peurifoy requesting him to report definitively whether the Military Misilon can or cannot supply information oo the nature of the arms.

confusions which It was thought could result fromCHO directive on the Interception of arms-bearingwere reviewed, and lt was concluded that the Intention ofvould be enforced and general efficiency laproved If itwith tha Havy that the Department, rather than cko, lavhich ships are "suspect".

Nr. Holland, afterroposed telegraa to Bonn, asked jabather we vould still pick up the check on Oeraan flag ships aeiayed during arms Inspection and found to be carrying arms. Mr r" ^replied In principle yes, and since it was not appropriate to discuss this natter before the group, conferred with Nr. Leddy, who was advised that he preferred to ascertain whether the Director stillsuch support frcai us before the release of the cable. Kr. Leddy replied that he had discussed the Batter withast week and thatad said all right but that he would prefer to discuss it with the Director. Mr. Leddy aod Mr greed that the cost Is likely to become considerable and far ottjvm cbe liability resulting from the single case of the WOLFSBBOOK. It waa concluded that before the Agency should agree to be liable for suchn understanding should be rormalised between tbe Agency and the Department.

With regard to the afreeting of tha blockade after the OAS Agreement, Nr. Holland pointed out that If ve are to interfere with Guatemalan foreign trade, tha stopping of American flag vessels will prove more Important than interrupting European traffic, and that wo shall use ao anearch for Communist agents and courier syetems. Mr. Holland asked tbe group to considerormula for this. Subsequently Krthla matter with Mr. Leddy and offered to undertake acme reaearcn which amyactual basis or grounda for laying ontory.

Kr. Holland requested o initiate actionis American dcawatlc groups to publicise against the purchase of Guatemalan bananas and coffee. Nr. Holland vould use this ln connection with his attempts to persuade those countries vho are so far reluctant to support tha GAB meeting--he vould pointrowing pressure for unilateral action and urge tha reluctant countries to collaborate vith the united States before tba domestic pressure should become too heavy. SubsequentlyMr. Leddy to handle this aa an overt measure vith Amarus, civil groups and suggested that Mr. Holland has ample proof of domestic pressure existing today- It vas concluded that Nr. Leddy vould only call on the Agnecy in the event the Department could not make th* naceeaary arrangements.



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