Office of the Historian

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 [Page 871] 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
  1. Not printed.↩