Created: 5/31/1954

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ith Minor Rene KEILHAUER and Jorge TORIELLO Reference:able04

The reference cable reports evidence of extreme nervousness of the Guatemalan Government reflected in an approach to Sydney Gruson by Guatemalan Tourist chief Palmieri, an associate of Minister of Interior Alejandro Charnaud MacDonald. Gruson believes the approach was on behalf of the Minister. Gruson was asked what Guatemala must do to satisfy the US. Will it be enough if several Communists are removed from posts or must Arbens leave office? Gruson replied that he could not speak authoritatively and expects to be queried again.

Charnaud MacDonaldrofessional politician who is well known for his opportunism. Heon-Communist record, although he has accepted Communist collaboration and support.

Minor Rene Keilhauer who arrived yesterday in New Orleans,ery close personal friend of President Arbenz. The purpose of his visit may possibly be to probe for answers to the same questions put by Palmieri to Gruson. If ihds proves to be the case, the two approaches probablyseparate feelers of political leaders who arc lookingay to get ahead of the game and direct the internal situation so as to fend off international sanctions and protect their own interests. The fact that Keilhauer is meeting with Jorge Toriello suggests that he is seeking some solution on behalf of the President and his intimates, including the Toriello brothers and others who may be classed apart from the professional politicians.

Also arriving in New Orleans yesterdayuatemalan physician. Dr. Alejandro M. Palomo. The slnted purpose of his visit iso conduct business for the Government of Guatemala." We have no information on Dr. Palomo immediately available. ourth arrival was Humberto C

who stated that he is traveling forheck will be made on Capua no to see if he ia connected with the pro-Communist lawyer Ernesto Capuano. If so, he may be trailing the other two.


peculiarities of President Arbenz' temperament are wellis neurotic ond subject to periods of marked depression. According toMinor Keilhauer is almost the only man he is willing to see atlime. We also have the report onlleged statement to his military

in the late fallo the effect that pressures mounting against

his administration made him feel that if they continued he would withdraw and leave the direction of the country to the military. Keilhauer perhaps has information about Arbenz1 present state of mind which he wants to pass on. Possibly the physician. Dr. Palomo, is in this country simultaneously with the purpose of arranging for medical attention for Arbenz here.

All in all, we believe that the time has come when it may be possible for the US to workeal to rid Guatemala of its Communists. We think thateal, while doubtless subject to imperfections and short of some of our aims, would be Infinitely preferable to forcing the overthrow of the Arbenz government by international conference and subsequent sanctions. Wc are of this belief because we think thatourse with leave us with more friends in Guatemala, would contribute constructively to continuing peace and good relations among the American States, and would give the Communists less material for anti-US propaganda. In other words, we think that an opportunity now exits for the US to help the Guatemalans to help themselves, so that they can claim to make the removal of Communists from the government their own accomplishment.

The terms of the deal of course should be such that the action would be effective: Communists must be removed from the Congress, from the positions in which they control Government funds, from the Government propaganda offices, from the electoral machinery, from schools, from control of the labor organizations, and from domination of the Agrarian Reform. Thisargee believe that nothing less drastic than suspension of Constitutional guarantees, followed by full investigation and subsequent new elections under strict protection against Communistwill suffice to break the hold Communism has gained in that country.

We believe, however,leaner, faster sweep could be made in this way than through the imposition of sanctions which would be odiousif determined by unanimous vote of all the other American States and would give the Communist forces the advantage of at least some support from nationalistic opinion, not only within Guatemala but throughout the Hemisphere.

Reverting to Arbenz1 personal situation, we alsothat it may be appropriate to recall at this time the circumstances preceding the sudden trip to Europe made by Major Alfonso Martinez, another person close to the President. Martinez' trip resulted in the acquisition of arms from Eastern Europe. Just prior to that journey, however, Martinez, as Chief of the National Agrarian Department, went to Escuintla for the announced purpose oftop_ to Illegal land seizures and disorders by peasants acting under the incitement and leadership of the well-known Communist CArlos Manuel Pellecer. When Martinez arrived he was confrontedob of agrarians brandishing machetes. He refused to deal with them in the open square where they had beeneeting was arranged

all. Martinez accomplished nothing, returned with what seemed almost headlong haste to Guatemala City,ew days later left for Europe, In the light of subsequent events, especcaLlly the arrival of arms for which Martinez negotiated, the following speculations may be totally unrealistic. The possibility lingers in our minds nonetheless, that Martinez may have been genuinely alarmed by the Escuintla situation. We wonder if he may have returned to the President with the report of his inability to control Pelleccr's organized agrarians and if he warned the President that the situation was going out of hand in the provinces unless the President was pepared to take drastic action, including the use of force, Arbenz could have decided at that point to take advantage of some pending arms offer of which he knew and could have despatched Martinez to consummate the purchaseudden decision to get the means, from any source, and then use the Army to maintain internal order. It was already evident, and doubtlessknown to Martinez, that the Civil Guard would be unlikely to stand against the agrarianshowdown.

Obviously the questions wc raise in this specuation can only be answered by knowing what Martinez did and said before and after his trip to Escuintla, and more than that, by knowing to what officers or what branch of the armed forces or police the recently acquired arms are being distributed.

We may be indulgingross recalculation of Martinez' motives.has been impure, wc know he was one of the trigger men whoArana by assassination from the path to Arbenz' nomination for He has never been identified with theatter of practical politics, however, and his precipitateEscuintlaood deal unanswered. If therehred ofthe foregoing, if the incident made him afraid of the growing power ofand if he communicated any of that fear to Arbenz, thereally be looking for an out and may be readier than wc think.toin refie ving himself of the Incubus ofrovidedformula can be

Copy to: Mr. Esterline

Original document.

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