File No. 814.51/199.

The British Ambassador to the Secretary of State.

Dear Mr. Secretary: A copy of your memorandum of the 2nd1 December was duly communicated to the Foreign Office, and has received their consideration, and I am now instructed by Sir Edward Grey to inform you that the question of the conversion of the Guatemalan bonds is one entirely apart from the question with which the Foreign Office are at present dealing, and is in the opinion of His [Page 511] Majesty’s Government a matter for the private consideration of the bondholders.

His Majesty’s Government have not been asked to assist in any scheme of conversion, but have been asked for their support in obtaining the restitution of the rights to which the bondholders are entitled by contract and which have been unjustly withheld since the year 1899.

In spite of representations to the Guatemalan Government, the latter have, in a way the injustice of which has been admitted by the United States Government, refused to comply with the request made to them, and His Majesty’s Government, in their wish that a method to which no objection can be taken should be adopted, have now proposed that the matter should be settled by arbitration, and what is now asked of the United States Government is that they should lend their diplomatic assistance in obtaining from the Guatemalan Government a compliance with this obviously moderate demand.

His Majesty’s Government do not doubt that the bondholders will, once their rights have been restored to them, be willing to entertain proposals for the conversion of the bonds, should it appear to be to their interest to do so.

His Majesty’s Government have continued to hope that the United States Government, recognising the reasonableness of the attitude taken up by His Majesty’s Government, would be willing to use their friendly offices with the Guatemalan Government to obtain their compliance, and Sir Edward Grey still trusts that this assistance of the United States: Government will be given, as His Majesty’s Government desire to avoid the necessity of considering what other measures can be resorted to for the purpose of inducing the Guatemalan Government to comply with their request.

I am [etc.]

James Bryce.
  1. Should be 3d.