entered Honduranian territory from both the Nicaraguan and Salvadorean borders and have apparently made arrangements for uprisings to take place in Choluteca and other cities. Please cable brief report stating whether such uprisings have occurred and if so, whether there is any probability that the movement will become general in character. COLBY 815.00/2230: Telegram The Chargé in Honduras (Spencer) to the Secretary of State TEGUCIGALPA, September 25, 1920—11 a.m. [Received September 30-9:55 p.m.] 65. Replying to your cipher telegram of September 21, noon, number 48. I send herewith report of situation. 1. The Government's belief, confirmed by information available, is that revolutionary movement of last week has failed. 2. Preliminary conversations with President regarding coalition cabinet show him favorable but indicate that steps in this direction. would be very difficult before result of local congressional elections, end of October, is known. 3. Young has urged insistently upon the President and Minister of War that effective financial reform is impossible without radically reducing expenditures of the Department of War, which absorbs [two-thirds of revenues and have shown no tendency to diminish during the past year. They have agreed in principle but declare such reduction impossible until the political situation improves which they expect after Nicaraguan election and local congressional elections end of October. On September 17, Minister of War promised Young he would reduce extraordinary forces in the interior and on Salvadorean border by 500 men at once and would gradually reduce garrison of Tegucigalpa from 800 to 300, but apparently recent events have prevented compliance. Government has accepted also in principle recommendation that civil police be substituted in large part for the army. 4. The President and the Cabinet have shown commendable disposition in adopting many of Young's recommendations for reorganization and economies in [government]. The President promises to give him [wide authority] in preparing budget for submission to Congress in January. However, under the present conditions money saved in civil branches only goes to increase spending capacity of War Department. 5. The present financial situation of the Government is very grave. [La] Ceiba, considered as chief source of revenue, has not produced for several weeks. The Government has about reached limit of ability to borrow from banks and private firms. It is to be feared that discontent of civil employees, whose salaries are two or three months or more in arrears, may lead them to disloyalty to the present administration while the failure to pay soldiers would be even more serious. 6. I sent report of Young's work my despatch number 8, September 16, last.14 SPENCER 815.00/2237 The Chargé in Honduras (Spencer) to the Secretary of State No. 15 TEGUCIGALPA, September 25, 1920. SIR: I have the honor to report on the revolutionary activities in different parts of the republic which have taken place during the past two days. There had evidently been a plan formulated for some time that the revolution should break out on the date fixed, namely yesterday, but the secret was known to Government officials as well as to the organizers, and while the public was wondering from what point news would first come of an outbreak, Tegucigalpa was not a little astonished to learn that yesterday afternoon General Cárcamo, Juan Planas, Carlos Laínez and J. de Roques had been quietly arrested and lodged in the penitentiary. This wise move on the part of the Government completely blocked all further activities. It showed also very clearly to everyone that the President and Cabinet had a clear knowledge of what was going on. There were a few other arrests of minor importance. Near La Ceiba there was a conflict between a small band and Government troops, but from the account given out by the President's office, it was not serious. In two other sections military stations were attacked, but advance information enabled the Government troops to fight off the attacking force. The talk of Tegucigalpa today is that, after so much preparation for a revolution, which was organized by a small body of malcontents, working almost a year, this effort, skillfully nipped in the bud by the Government, was nothing short of ridiculous. I have [etc.] 815.00/2229: Telegram WILLING SPENCER The Chargé in Honduras (Spencer) to the Secretary of State TEGUCIGALPA, September 28, 1920—4 p.m. [Received September 29-2:30 p.m.] 64. Your cipher telegram 50, September 23, 5 p.m. After a thorough examination I do not believe there are revolutionists in "Not printed. any number now assembled on either Nicaraguan or Salvadorean frontier. About September 1st a movement was on foot to enter from Nicaragua but nothing serious developed. The President has assured me as late as day before yesterday that he is perfectly satisfied with the cooperation of the Governments of Guatemala and Salvador but he does not feel that the President of Nicaragua is friendly. There are several Honduranean revolutionists living in Managua but no particular indications of any movement general in character. SPENCER APPOINTMENT OF ARTHUR N. YOUNG AS FINANCIAL ADVISER TO THE GOVERNMENT OF HONDURAS 815.51/383a: Telegram The Secretary of State to the Consul in Charge of the Legation in Honduras (Lawton) WASHINGTON, December 15, 1919-10 a.m. Department desires that if possible during an informal conversation with President Bográn you discreetly discuss with him the desirability of having a report prepared of the Honduran financial system with a view to eventually placing Honduran finances on a satisfactory basis. It is suggested that if possible Bográn request the Department for the services of an expert to make the report referred to. LANSING 815.51/384: Telegram The Consul in Charge of the Legation in Honduras (Lawton) to the Secretary of State TEGUCIGALPA, December 26, 1919-2 p.m. [Received December 27-11:50 a.m.] In reply to your telegram December 15, 10 a.m. Bográn approves the plan but as his term of office is so short suggested that I discuss the matter with the President-elect with the result that General López 10 asks that the Department of State suggest some person suitable and cable conditions under which he could be sent to Honduras. 16 LAWTON 16 Gen. Rafael López Gutiérrez. 815.51/390: Telegram The Secretary of State to the Consul in Charge of the Legation in Honduras (Lawton) WASHINGTON, March 23, 1920-6 p.m. 20. Your February 7, 11 a.m. and Department's February 16, 3 p.m.17 Department has been in communication with Prof. E. W. Kemmerer, in connection with obtaining his services as Financial Expert for Honduras. He is a leading expert in banking and finance and recently did most excellent work of this kind in Guatemala. He has expressed a willingness to go to Honduras and to leave the United States early in June. Department would be glad to be informed as to whether Prof. Kemmerer is acceptable to Government of Honduras and desires to learn what compensation the Government of Honduras would be willing to pay him. COLBY 815.51/391: Telegram The Consul in Charge of the Legation in Honduras (Lawton) to the Secretary of State TEGUCIGALPA, April 17, 1920-3 p.m. 38. Department's March 23, 6 p.m. The Honduranean Government offers Professor Kemmerer one thousand American dollars a month not exceeding six [months] and five hundred dollars travel expenses. Full report by mail.18 LAWTON 815.51/395: Telegram The Secretary of State to the Chargé in Honduras (Belden) WASHINGTON, May 28, 1920-3 p.m. 32. Kemmerer unable to accept. Department is able, however, to propose most satisfactory substitute. Dr. A. N. Young of the Trade Advisor's office and former professor at Princeton has had considerable experience in Latin-American finance and is well acquainted with Spanish. Department recommends him most favorably and if acceptable, he will arrive at Tegucigalpa on or about July 20. Advise Department as soon as possible. COLBY 17 Neither printed. 18 Not printed. 815.51/397: Telegram The Chargé in Honduras (Belden) to the Secretary of State TEGUCIGALPA, June 3, 1920-3 p.m. [Received 9:55 p.m.] 47. Department's telegram number 32 May 29 [28], 3 p.m. Doctor Young will be acceptable under the same conditions as previously stated. BELDEN 815.51/397 The Secretary of State to the Chargé in Honduras (Belden) No. 368 WASHINGTON, June 9, 1920. SIR: With reference to your telegram of June 3, 3 p.m., by which you reported to the Department that Dr. Arthur N. Young would be acceptable to the Honduran Government under the same conditions as previously stated, the following outline of Dr. Young's career is given for your information: Dr. Young, who is at present Regional Economist in the Office of the Foreign Trade Adviser of the Department, received his Ph.D. in Economics and Finance at Princeton in 1914. Thereafter he was Instructor and Professor of Economics for three years. In 1917 he served as Financial Expert for the Doheny Commission to study the Mexican situation, and subsequently as Adviser on Taxation to the Commission on Administrative and Financial Reorganization of the Mexican Government. In 1918 he was Trade Expert for the War Trade Board; from 1918-1919 he was Trade Commissioner of the Department of Commerce to investigate banking and finances in Spain. He has been in the State Department since December 1919. He is the author of several books, including one on the finances of the Federal District of Mexico (1918) and one on Spanish finances and trade, now in press. The Department believes it would be difficult to find a man better equipped for this post than Dr. Young. He combines a thorough economic and financial training with actual practical work in investigating Latin American financial conditions. As an economist, Dr. Young has an unusually high reputation for a man of his age. Furthermore, he speaks Spanish fluently and is thoroughly familiar with Latin American characteristics and institutions. The success of Dr. Young's mission in Honduras will obviously be greatly facilitated by your good offices, and to this end you are instructed to give him access to all material in the possession of the Legation of an economic, or social nature. |