The Officer in Charge of Central America and Panama Affairs, John M. Leddy, sent this memorandum to the Assistant Secretary of State for Inter-American Affairs, John Moors Cabot on May 21, 1953. This memorandum comes a year after the CIA information report included, and the perspective towards Guatemala described has changed significantly. It focuses primarily on the Soviet communist influence present in Guatemala: “A gigantic May Day celebration was used as a Commie display of strength, and the Communist labor leader Gutierrez made a rabid speech threatening the opposition with destruction.” The strong and fearful language used in this line is a sharp contrast from the mostly unconcerned reporting from 1952. This document shows an extreme escalation in fear towards Guatemala and communist influence, that would lead to Eisenhower’s approval of PBSuccess just a few months later, in August. The beginnings of this plan are seen in the final section, which discusses military and arms deals with El Salvador and Honduras.
Leddy also expresses concern about United States businesses under the subheading “American Interests Under Attack,” a section that takes up about a fourth of the document. He mentions UFCO first, writing, “The United Fruit Company remains a prime target of the leftist Government coalition. The seizure of three-fourths of the Fruit Company’s land on the Pacific side, under the Agrarian Law, has been finalized.” Though Decree 900 was compared to the New Deal in the 1952 report, after the expropriation of UFCO land, it is framed by Leddy as a communist threat to the United States. The fact that the section on U.S. business interests is so significant in the memorandum and that UFCO is named a “prime target” reveals the importance of economic motives to top U.S. officials.
“III. American Interests Under Attack
1. The United Fruit Company remains a prime target of the leftist Government coalition. The seizure of three-fourths of the Fruit Company’s land on the Pacific side, under the Agrarian Law, has been finalized. We have notified the Guatemalan Ambassador that we will wish to discuss this in the normal representation of American interests, in order that prompt, adequate and effective compensation may be made. No reply has been received. The Fruit Company will ask the Department to present a claim for the value of its seized holdings but it has not yet referred this claim to the Department for action.
2. International Railways of Central America is also under recurring attack. An embargo was placed on its property about two months ago on a tax claim of $3.5 million but was later withdrawn, since the tax case is before the courts.
3. The Electric Light and Power Company, a wholly owned American and Foreign Power subsidiary, is under threat from two sources: first, hydroelectric power development by the Guatemalan Government which would take water from the river supplying two of the company’s plants; and second, revision of its concession contracts as a result of action by a Congressional committee dominated by Communists. This American company has notified the Department that in spite of all its efforts to come to an agreement with the Guatemalan Government it regards its future outlook as very pessimistic.”
Link to full text: https://history.state.gov/historicaldocuments/frus1952-54v04/d423
Leddy, John M. Memorandum to John Moors Cabot. “Memorandum by the Officer in Charge of Central America and Panama Affairs (Leddy) to the Assistant Secretary of State for Inter-American Affairs (Cabot).” U.S. Department of State Office of the Historian, May 21, 1953. https://history.state.gov/historicaldocuments/frus1952-54v04/d423.