1941: Guatemala

The Constitutional Assembly, on Sept. 12, 1941, approved a third term for President Jorge Ubico without the necessity of an election. According to this latest example of continuismo, President Ubico will now hold office until 1949. In June it was reported that the Liberal Progressive party which put him in power (a euphemistic name in view of the dictatorial nature of the Government) had received a request from the 'workers' front' for permission to put Ubico forward as candidate when his term should expire in 1943.

Like all the Central American republics, Guatemala declared war against the Axis Powers in December. The serious credit consequences of this act, which blocks transactions with the nationals of those powers, have been pointed out in Guatemala's case, and it has been recommended that this problem be raised at the Rio Conference of Foreign Ministers (See BRAZIL). The United States blacklist of business interests sympathetic to the Axis hits Guatemala especially, since the German colony there is very wealthy and Germans own about 50 per cent of the coffee plantations. In order not to affect Guatemala's coffee trade too seriously, special arrangements were made with the State Department to permit the importation of limited amounts of coffee grown on blacklisted fincas. Under the recent coffee quotas (see BRAZIL) Guatemalan planters will be entitled to sell 75 per cent of their annual output in United States markets. With an allotment of 535,000 bags only a small carry-over from the crop year ended Aug. 31 is expected. The Guatemalan Department of Agriculture was instructed by President Ubico, in April, to take steps to increase the production of staple food crops, for fear of the effect war might have on food imports.

1940: Guatemala

The finances of Guatemala are in a sound condition, with the quetzal on a par with the U. S. dollar, gold reserves strong, and a balanced budget, estimated for 1940-41 at 10,258,000 quetzales. President Jorge Ubico's methods of securing this result work a disadvantage to the masses, however, and, in part, account for the abortive revolt late in December, led by Julio Marín, head of the Unionist Party. Little is spent on public education or public health, and the heavily mortgaged coffee industry is threatened with bankruptcy by low prices and the high export tax on that commodity. Coffee forms 50 to 60 per cent of total Guatemalan exports. The loss of the European market, which normally absorbed about 45 per cent of the Republic's coffee, has resulted in a relatively large coffee surplus and has led to a general reduction in foreign trade in the first nine months of 1940, when export values shrank to $11,914,000 as compared with $13,150,400 in the corresponding period of 1939. Guatemala has accepted the coffee quota of 535,000 bags assigned it in the United States market (see EL SALVADOR). In the past ten years the United States has steadily increased its purchases of Guatemalan coffee, and about 70 per cent of the 1939-40 crop went to the North American republic. Banana exports are about one-third lower than in 1939, but expanded production, because of the successful operation of new Pacific coast properties, has about doubled the output in the past five years. The money spent in this development has provided much needed foreign exchange.

In view of Great Britain's present difficulties, President Ubico has suspended efforts to reincorporate British Honduras (Belize) with Guatemala until a more appropriate time. This dispute dates back to the Convention of 1859 whereby, in exchange for British sovereignty over the contested area, Great Britain promised to cooperate in establishing communications between Guatemala City and the Caribbean coast. A study of the proposed highway convinced Britain that the cost was prohibitive, but Guatemala has insisted on compensation for the unfulfilled commitment. Arbitration negotiations in 1937 bogged down over the choice of an arbitrator. The latest arbitral proposals, originating with Great Britain, agree on an arbitral board of three, one chosen by each of the disputants and the third by President Roosevelt.

A new development in Mexican-Guatemalan relations was indicated in the spring when President Cárdenas, at the Guatemalan border, asserted that the two countries enjoyed a profound friendship based on mutual interests, in spite of the fact that the highly conservative government of Guatemala, now in its tenth year in power, has always been suspicious of the revolutionary administration in Mexico.

1939: Guatemala

President Jorge Ubico, on Feb. 4, celebrated the eighth anniversary of his accession as Guatemala's constitutional dictator. The most drastic restrictions on Fascist and Nazi propaganda activities in all Latin America were provided by presidential decree, issued in May, prohibiting foreign political organizations and not exempting foreign diplomats from the ban. Nazi propaganda through the local German schools has also been checked. Guatemala has the largest German colony in Central America, and the Third Reich has been very active in developing trade relations with the Republic, although these efforts have left Germany far behind the United States, and have resulted in an unfavorable trade balance of almost $3,500,000 for Guatemala. On the other hand, Guatemalan-American trade, export and import, has risen steadily from $9,000,000 in 1934 to nearly $19,000,000 last year, with a favorable balance for Guatemala at the end of 1938 of $3,850,000. The United States is the Republic's best customer for coffee, which represents 80 per cent of Guatemala's exports, and also for bananas and chicle.

Treasury representatives of the twenty-one American republics met in Guatemala in Nov. 14-21, to consider trade and monetary questions. Although Mexico proposed the creation of a central bank for all the Americas, to stabilize currencies through credit extensions, and in a resolution the monetary committee expressed its unanimous agreement on the necessity for 'a stabilization of the different currencies which would make exchange possible and regularize the economies of the different countries,' the net result of the conference was the adoption of an expression of hope for such stabilization and for an improvement in inter-American trade.

1938: Guatemala

The report from Mexico City on Jan. 6 of a widespread revolt in northern Guatemala against the government of General Jorge Ubico was denied by The New York Times the following month. President Ubico is considered one of the strongest of the Central American dictators. The Fascist tendency of his regime is demonstrated by his early recognition of the Franco government in Spain. Press judges to serve for one year as censors of newspapers and other publications were elected at the March municipal elections in Guatemala City. In case the presidency should become vacant the Guatemalan Congress in March elected first, second and third designates to succeed him.

Since coffee and bananas represent approximately 90 per cent of Guatemala's export trade, the lowering of coffee prices by Brazil's cancellation of its coffee valorization program and severe windstorm damage reduced the high levels of 1937. The 1937-38 budget estimated receipts and expenditures at 9,788,500 quetzales. Actual figures for the first half of the fiscal period showed a deficit of 115,000 quetzales.