816.00 Revolutions/87: Telegram

The Chargé in El Salvador (McCafferty) to the Secretary of State

23. All indications now point to the fact that the de facto government has the situation well in hand. However, the danger is by no means past. The continual maintenance of order during the next few months seems [to] depend largely on the ability of the authorities to obtain sufficient funds to pay the armed forces. At the present time the revenues from all sources except the customs are negligible. Therefore, the government has issued a decree providing for the temporary collection from January 25 of 100 percent of the import and export revenues directly by the government. The decree states that it has been absolutely necessary to take this measure because the serious communist movement threatens the very life of the state, emphasizes its temporary nature and reiterates the government’s intention of complying with contracted obligations as soon as circumstances permit.

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I have discussed the situation fully with Admiral Smith who arrived at La Libertad yesterday on the Rochester and we believe that presence of the Canadian destroyers is no longer necessary since we now have adequate forces to meet any situation which may arise.