File No. 817.00/1677.

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At the legation night before last Diaz for the first time frankly confessed his position, namely that of a figurehead, ignored by Mena’s followers, and no voice in decision on any executive act. I reiterated the Department’s attitude toward him, and said I looked to see a radical change. He left contented, after repeating his promise not to resign until the loan matter had been settled, at least. Yester-t day I had a long conference with Mena at the legation. He became contrite, and is now fully awake to the need for preserving the status quo.

Gunther.