DATA ON BAG FACTORIES; FAILURE OF KENAF PRODUCTION

Created: 2/8/1954

OCR scan of the original document, errors are possible

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Data oa Bag factoriaaj failure of Kenaf ProduoUon

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SUPP. TO REPORT NO.

OB^tlo^l, owner of tvo eoffoo plAataticca la Cia^aui and raaiasat of Owteamle

Heraanatearge eastern university aU ia named toUS cltlaaa. and hla wife apeak fluaatt gpaalaa and be is belaud tocuallfiaaaeationa Ia regard to tba eeonoar/ or

l' UmtUmChrtpe* of Bagging and Cordage Fibers In CmtrsrUa

There are two princlral factories for anting bags in Cuetcamla. Onen Coban. Here toey uae magueyproduce aoout one hundred thoueexiear. an by tbe nane of Torroblate la tbe owner. The aecoad factory ia smaller and produces aboibouaandear. It io called "Alca" and ia cvoed by Roberto Fwujul, forasri the Minister of Economy. Thereax ofilo for importing bagsax ofag to export then. The idea behind this tax is to protect tbe local industry. However, tba tax vaa imposed by Roberto Fanjul cs the Minister of Bcoooxy on the pretext of helping the indue%.ry, whereas, in fact, he hicself isat profit out of it.

/ government mill eing constructed near Guatemala City and is expected to be completed. Here, fiber machinery has been imported froa northern Ireland. Faojul ie also involved in this and be is making every effort to get tbe farmers (agraristaa) toiber called kenaf to sell to the factory. This will tie in with the government agrarian program. In ay opinion, this effort to get the agrariatas to grow kenaf win fail, because it ie very difficult to harvest kenaf and efforts to decorticate it b: ve failed in tbe paat. The agrr.rietas will probably continue to grow corn and buaus which ia easier for then to do. The larjjvr planters don't want to grow kenaf because it la so difficult to harvest and becausee experience two engineers had who putot ofor raising kenaf uod failed. Theee men were Prado Velezan called JacocStahl whoerman refugee. Tfaes. two nen borrowed noney from the Instituto de Poncnto do Proiuecirfn (Iafep) and rented five hundred acres from the United Fruit Coopany ln Tiqu'sate Ti-ey planted this five hundred acres with kenaf which grew veil, but vhcr. it oiae tifc to harvest it, they bad labor troubles and lacked tne proper machinery, andesult, lost abst of tbe crop. Shortly afterward, tbe land was expropriated by the government and they were forced out, still owing money to Info*. Two other men. Colonel Fred Shervoc. whoormer US Air Attache in thi Embassy there, lardon, have

lost noney also in attempting to harvest r- . Tmcdemoralized any effort on tc

port of others to invest any moccy ir. the growingM'.

SET LASTRfvEA COSES

L. S. Officials Only

ft 1

ThU report Is lor the use within thr USA of ilio Intelligence iw Spoil "ii is nfgencies Indicated It ise iraiumuiMlho-Jt rhetce of Hie 'origlnaUng office- through theDirector ol tltc Office ofndnloAuoa.

The purpose of the Guatemalan Government inew factory vaa so that the) vould be able to produce enough bags to take care of coffee production. This voult dud the production of about one sill looear which is aaoy times aore than can be produced at tbe present tin. Host of the bags are nov imported froa India.

2* Land Refers frc^rram

I believe thereustification for the land reform prograa ln the cue of the largest land ovnere, sueh as Carlos Benera and C'-cuany and the Ibarguens. However,

reform baa been too drasttot only the large land owners, but also tee small ones vho ttffl trying to do eomettiag vitn their land. It is especially unfair to the United Fruit Coupauy and-ave lost about tvo hundred thousand acres vhlch they vera keeping in reserve for tbe rotation of tbe banana crop, fry*oas have to Vi rotated every eight to tec yearr.. Txisc refonn* vill reduceproduction drastically in so far as coffee udnas are concerned. It vill also reduce the production of meat, because tne cattle owners haveot of trouble vlth the government la keeping their pastures un. eventually there will not be adequate paeture land and cattle production will fall off. There will probably be an incraaae ln production of corn and beans. There is au over supply of labor, because the larger land owners are up and deaorallzed by the government's actioa and they are not working their baclendaa.

3- Heed for the Sev Port at Santo Toaaa

Tbe building of the port at Santo Tomesonceive* and la the result of nationalism plus hatred for the United Fruit Company and for the UB. Tbe money vould be aoeh better spent on otber roads, ln ay opinion, such as tbe Cerreteia Xaternsclc; dal rmcifioohich runs froa Ayutla to Bscuintlm, and tbe Highland Boad, vnici runs from the Mexlcac border to Hueauetenmngo. The port of Santo Tcrvj and the Carretera al Atlaatlco vere unnecessary, ln ay opinion, coapared to Clpa and the Highland Bond. Millions of dollars are being poured into the construction of this Carretera al Atlantico, vhlch runs from Bast to Vest through svaaps and over mountains and the government Bay not be able to finish it because of the dlffj ies of ave talked to people in Guatemala vho think that the goreraaent is pushing the Beat-Vest road since lt vould help the USSR in tbe ceae of invaaloa, vhere-as the government is against conpletlog the Clpa and tbe Highland Road, vhiah^raa froa lorth to South, since lt vould help the UB. Tbe Atlantic Road will take about another six years to complete and tbe government amy run out of money before that time.

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