File No. 812.00/5306.
The American Chargé d’Affaires to the Secretary of State.
Mexico, October 21, 1912—12 noon.
Diaz is hourly losing strength and prestige. The failure of the army to declare for him immediately after the capture of Vera Cruz has greatly weakened his position and helped the Government, which [Page 859] is now stronger than for some time. Diaz counted on prestige of his name and position as an army officer and did not sufficiently plan capture or revolt of other important strategic centers.
There is a great drain on the Treasury caused by the immense sums of “pacification money” constantly being paid by Madero to individuals all over the country, ranging from 1,000 pesos. These payments can not be indefinitely continued and when they cease beneficiaries will doubtless make trouble.