Created: 10/10/1952

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Although President Arbenx appears to collaborate with the Communists and extremist! to the detriment of.Guatemala's relatione with thea quite certain that he personally does not agree with the economic and political idear. of the Guatemalan or Soviet Communista,m equally certain that he is not novosition where they can force hia to make declalona in their favor. Tbe reasons for ay opinion are as follova:

Praaident's social reform ldoaa stem from the US Hev Deal rather. from Soviet Comnunism.

Preaident Arbenx ia still convinced that he is "using" Communistsommuniem to further his own enda.

Ee la fully aware of Guatemala's economic dependence on the US.

has no fearonservative coup and has taken no active steps. guard against one.

"opposition" of buainess groups and conaervatlves (with the exceptiona few landowners) baa been greatly exaggerated. This Is evidenced by the

"surprising" lack of serious concern in moat business circles about the effects of the new land reform bill.


It la my peraoaal fear tbat the chief threat to the Arbenz regimeoup by ran*within the "palace clique" who hare boid out to Coaaunist penetration. oup vould first assassinate the popular arbenx, blase the reectlonarieB for hia death, and then proceed to violently wipe out alloppoaition.

Bather than settingommunist state, Arbenz desires tomodern democracy" which would improve the lot of its people through paternalistic social reforms. Arbant' personal idolad hia reforms are patterned after Sew Deal reforms and adjusted to tha backyard economy and social structure ofe of the reforms are substantially extreme aa compared to many of those in the US, Europe, aadkevMoan other Latin American countries. Tba extremities are relative and aeem radical In Ouatemala only because of tho backward feudalthey are meant to remedy. Also they seem extreme compared to tbe ineffective piecemeal aeaeurea of bis predecessor, Arevelo. Duringrm, Arbenz often became angry at his veaknesshief-of-state and reelizea that no effective social measures could be implemented while Are-alo ns president. Satlefying hie ambition to become president himself, and alsolncere desir to fulfill hia promlaes to hia people, Arbenz went to vork Immediately and impatiently to implement hiB reforms and, as he put it, "to Jar Guatemala out of the Middle Agos".

President Arbenz ia still convinced that be i^ "using" Ccamonism to furtherends and in no sense is he dictated to by Cccmroaiat elements 'althoughplays into their bands ln bis attempts to useand the Party line

Arbenz came te power heopular revolt more than anythingpictured himself2 and followed what he thought vaacourse, that-is, he achieved popular support by relieving acme ofeconomic and aocial pressure on the very poor at'the expense ofrich. The reactionary group, in which Arbenz had many personal friends,

fully expected him to reverse bis field once his presidency was "assured andhie reform promises. When It became evident tbat be was serious about lereeJtnaaiytihe landowners became quite bitter and opposed him at every turn. The reactionaries immediately turned the Communist spotlight on all reform measure

regardless of merit.

Sincere about reform and unable to get support for his program from any other source, he found the Party line ofeady-made toolwhich he could organize the proletariat and control the country. Harping on US financial Imperiallam and on Guatemala's oppressive land system, Arbenzopular hero at the calculated price of eroueing US indignation. Els best emotional appeal to the peoplelatform that vas anti-US and defiant of US corporate imperialism, meanwhile the Ccomnmist organization which lined up and manifested popular support for Arbenz succeeded ln penetrating his government. m not aware of the-'extent of *alB penetrationoubt that Arbenz is aware of it.

The president deals with hi* subordinates as individuals rather than thlnkinr of them as members ofgroups. Robertc^anjul, Minister oflose friend of Arbenz, told me several weeks ago tbat he vaa certain tbat the President's sources of information were elwaye "filteredommunist screen*. (PanJul is loyal tom convinced, but undepressure could not be expected to act effectively In his behalf.) Fanjul feela that Arbeaz does not believe the Communists bave penetrated far enough to harm hia and that he does not realise the extent that tha Coamuniats claim bis reforms as their own. Arbenz still feels be can carry out bis objective of using tha Communists without being controlled by them. ould say that eight out of ten of the government officials would swear they are not in favor of Communism but that they are using it for their own purposea.


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(d) Incidentally the President's wife, .Maria Christian Vi^MMoy^raeaz,

daughtereal thy family of El Salvador, has far more -radicallythan her husband and erpresees these, ideas at will. Thia. lady educated' la the US and vas raised and spoiled-in the luxurious-styleinbred aristocrats. Ser socialistic, left-wing ideas are, ina definite reaction to this background. So far the Presidentnot appeared to have been influenced,deas. One exceptionis in the case of relations with El Salvador, These have been andquite'cordial on tbe top governmental leve_ aa long as Axbeoa_ . vV.VL A

, v .

Arbenz realixee that Guatemala is economically dependent on the: US but intends to bluff through his defiance of US corporations to any^length'abort of national suicide.. An inlSg^fpart-of hie program-theuatemala from the categorysubsidiary of UnitedHo-eiiniVstuboort

willing to riak his owe, wealth and who ia able to enlist tbe aupportvof-otherstheir wealth on the gamble of getting nationalend chicle industries and its mineral and petroleum,potential. to be expected under .thia program and Arbenz ic willing to make than. that any hardships oa hia people resulting from-defiance, of USbe politically offset by its nationalistic appeal so as not to effectof his

Bis goal is to assert the.rights of the Guatemalan Government to dictateunder which foreign firmsn the*-courtryeuppciallyexploitation of natural resources is concerned. Shoving tbat hiearge Industrial nation and yetound economy to carryreform programs, Arbenz.sees the Only answer is'expanding productiona larger share of*what is produced. letvhe-realiaeethls'ls notUS markets aad US capital. He realizes that If prices fell In the OSUS import restrictions barred Guatelala's goods,his country vottld:'golo determined this will not happen.' He can only bluff-because, he hasto turn. The one possibility would be the Soviet bloc, vhlch mightfinance the country in order toestern hemisphereThis ie one. thing Arbenz does not'-vant.He definitely vould*:preferto Soviethe-best-example of: this is^the'faet-bluffing of US Interests he baa never used the potential weapontrade treaties with Soviet bloc countries, although It seems logicaltbat such commercial overture* 'have been-made to him. It is' an> beliefwill not go that far in bluffing the US- Haumayj however, bluff toothe good of his

Hight now the entire economy Is propped up by the price of coffee. lose friend of mine-who hasesident buyerS -coffee firm for several years told mo that if the price of coffee dropped five ceata he vould get out of Guatelala immediately. The price of coffee is high but the government depends onit to offset some of. the losses of the other branches of the economy. Aviateca la bankrupt, aeveral public works projects are in the red, there Is trouble ln the mining Industry and Vrigley stopped buying chicle ln the Peten. Despite these reverses, if the price of coffee hold* up- the regime.will stand-financially and still carry out aost of ita social reforms. let most of the growers feel that it will take five mere years of today'a high prices tooint where they conubstantial drop in coffee prices: Once the price goes down, only the large growers will be able to bold their land. Theee will alao be able to bey up other lands.merely to keep them idle in an attempt to cut-down the aupply until the prlcea riae. These tactics would centralize the wealth and etarva the works*s. These deserted fjpcae would" become overgrown immediately in thia climate andlnce Is idle Just one year lt takes at least five years to put one back.into production. Inituation it would be impossible for the preseat regime to stay ln power.

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olM ofdrop in pricca Arbens-has -hla'Cxi land*-to- fall- backhis use of themast- resort might-come too late politically. held up their exploitation so fax on nationalistic grounds, holding outright to dictate terns for oil exploitation, xne-government ovns cost oflands outright "and also ovns the rights- to all. underground minerals asrights are included in private-titles.

Ti. f> : :i'-ty-'V' r* 1 y.

doeo not fear overthrow ftfos reactionary groups-. Vhen'I leftweeks ago ton- President'snd three children baa flown to Washingtonthere to Switzerland where the children will be put ln school. Someone

tho President if this household evacuation indicated that he He denied it emphatically, stating -the family'had planned the moveego (Arbenx'wisshane, it,'little realArbont -sWl^'an^snti-Communist or reactionaryrbens andfeel that there are Just not-enough large landholders >potarjs*Interestedofoup and that they could-not.line up the other The Preaiient has several very close friends'ia^gfie reactionaryof whom are wealthy-and would have less personal' gain,|fron Arbenz'some of the left-wing governmenteUeye'the- Presidentlnfcrmed on activities in the rightist opposition emu1'than withinsupportr-ffSJj

9- The President has not taken the obvious prscautlons,to guard against reactionary

ilo arms have been distributed te Communlst'-cells or labor-groups (at

least vlth his .

conservatives have cose to view Arbenxany^^Pat Tejada, a

staunch reactionary who had once threatened to kill Arbens, is new on verywith him. The Communist-Inspired agrarian reform bill whjch was 'towith'fierce opposition from all conservative*elements*has actuallywith surprising calm by business interestsj^t'part of the One reason for the relaxing of their fears'is the retention of thepower by the President*and by the appointment'of his private seer.tary . .- s

President Arbenx, who is constantly aware-of the danger of aomini strati ve-corruption in all reform legislation, has reserved the final 'authority on refora meas;TbB to rest with himself. This relieved*the'buBioese interests*andus lt was an indication* of-a* "realistic"o land reform. There is confidence that the President himself vould-veto any attempt to expropriate land vhich* is in active cultivation.

This reservation of authority la the case of the nevlead reform lav isnconstitutional by severalis- that thect definitely was -unconstitutional.dvised him- of this foeit off to expediency. *No-one else-seemed to take-it too seriously.

As most landowners are not too worried; about having their cultivated land takeney have also calmed' their fears that-tha-opening of new-land vould dimini their coffee labor force. 'It-is pretty well agreed-among the landowners tbat to Indians will not take on the extra labor and risk involved ln leaving their commi:nitie5 andsteady source of food to take the chancos* involved in clearing nhd punting uncultivated, inaccessible-

1*. There- maylight temporary shortage of auxiliary part-time helo. iut-ork and live On-the flncas will probably notare

ftilies living there peraanently. During coffee harvest aboutorsre recruited in thehese hill people* are more or less independ* but ell envy the life of the workers* on ouror vhom ve provide shelter* ar c. year-round source of food. -The flnca dwellers feel they would be fools toend trytrange plot of lend. They would lose their place on the fjncp and risk crop failure on the government land, which would mean they would have tc give it up. There If no entrepreneurial spirit smong the native workers.

coOTiDKrrriA^tis ofticials only/

" 5

Possibilityeft-Wing Coup Against Arbenz

15- elieve that the regime Is is no dangeronservative coup but say

possibly be In dangerlot to sand Guateaala violently to the left. Tbla will not be possible while Arbenz la President, but there axe many opportunlatB around Arbenz whose personal ambitions outweigh any political convictions. ersonally am afraidpalace coup" which vould accomplish the assassination of the popular Arbenz by tbe plotters vbo would blame the killing on reactionary elementa. They vould use this "outrage" as an excuse to violentlyightist's revolution" andpeoples' democracy" in Guatemala with themselves at the head.

16. These opportunists ofpeak are such that they could be, and may already nave been> approached by the Communist organizapion in,Ouatemala. Theeel would be most capable of this iaecently appointed by Arbenz to head the government department charged with administering the new land reform law. Heat, jovial, extrovert vbo has succeeded inthe complete confidence of Arbenz and who haa acted as the President's personal secretary. It vas the President's desire for direct personal supervision that prompted him to appoint Martinez to head this important department ratherendency to repudiate the known left-wing advocates of the* bill, such as Chamaud MacDonald. This appointment vaa viewed with relief by the business and coffee growing interests. This view is correct aa long as Arbens le president, but the reform machinery has now been set up end with someone else as president who is of more leftist orientation or under actual Coaaunist control, the situation would be radically different. Martinez' recent, though nominal, promotion, his position close to Arbenz, and his greed for power make him on ideal target for Coaaunist penetration. Another opportunist is Chamaud MacDonald, of whose politicalnow very little. It is my opinion that he does not enjoy the President's.complete trust.

17- Incidentally, the health of the President ie excellent, although he haa loat aboutbs ln the paet few years. He is quite robust and active. Ee onjoya' recreational sports, especially swimming and horseback. His morale is also excellent.


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