"Practically Confiscation"

Glum and pessimistic, United Fruit Co. officials in Boston and Guatemala City waited last week to see what Guatemala proposed to pay for 233,973 acres of company land at Tiquisate, expropriated by the land-reforming government. A curt official telegram to Almyr Lake Bump, the U.S.-owned firm's Guatemala manager, finally brought the answer: $594,572, or $2.54 an acre--and that in 25-year, 3% government bonds. The company's unofficial valuation: $11.5 million. "The measure constitutes a heavy blow to the voracious imperialist company," gloated the Communist weekly Octubre. "Practically confiscation," snorted United Fruit.

Keeping faith with its stockholders, the company announced that it would appeal to the Guatemalan supreme court, challenging a provision of the agrarian law which bars court appeals from land-reform decisions. The last four supreme-court justices who ruled in favor of a landholder were thrown out and replaced by stooges of the Red-tinged government; thus the company appeal seems doomed. United Fruit may then peg its hopes on a statement of principle enunciated by Cordell Hull after Mexico expropriated U.S. oil companies in 1938. Secretary of State Hull conceded that a government had the right to expropriate property, but insisted that compensation must be "adequate, effective and prompt."* By depositing bonds of doubtful worth to United Fruit's account in the National Treasury. Guatemala seems only to have been prompt.

*Indemnity for the 1938 seizure of U.S. oil interests in Mexico was set by the two governments, after the companies finally dropped objections, in 1943; Mexico's last payment was not made until 1947.

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