834.00/796: Telegram
The Minister in Paraguay (Howard) to the Secretary of State
23. I have just received two notes from the Ministry for Foreign Affairs. The first announces that Colonel Franco today took oath as [Page 861] Provisional President “by decision of the plebiscitary decree of the liberating army,” and that he has constituted his Cabinet as follows: Minister of Interior, Dr. Gomez Freire Esteves. Minister for Foreign Affairs and ad interim Minister of War and Marine, Dr. Juan Stefanich. Minister of Justice, Worship and Public Instruction, Dr. Anselmo Jover Peralta. Minister of Agriculture, Don Bernardino Caballero. Minister of Finance, Dr. Luis Freire Esteves.
The second notifies this Legation that the Minister for Foreign Affairs, “has fixed tomorrow, Friday, the 21st from 9 to 11 o’clock to receive in special audience the members of the Diplomatic Corps accredited before the Government of Paraguay.”
The members of the Cabinet are not persons of prominence and probably were chosen largely because of their personal friendship with Franco. Hastily gathered information indicates that the two Freire Esteves are brothers, are not party members, have so-called extremist views and were implicated in the 1915 January revolution (see despatch 40, January 4, 19155). Stefanich is the former representative in Paraguay of the League of Nations and leader of the virtually inactive Liga Nacional Independiente. (See despatches 100, February 14, 1936, 247, June 22 [20], 1935, and 662, November 14, 1928.6) Peralta is a former deputy, also said to entertain extremist opinions. He was accused by the Ayala administration of being Communist and unquestionably is the person referred to in the first paragraph of my despatch 168 [68], January 11, 1936,5 as having been deported. Caballero is said to have returned recently from Germany and to approve Hitlerism. He is a member of the National Republican Party and also was implicated in the 1915 January revolution.
It is generally believed and is my opinion that the insurrection which placed the Franco government in power may properly be designated a military coup, that it was based upon jealousies and possibly just grievances among the military resulting from favors bestowed upon a few while the majority of the ex-combatants considered themselves to be neglected and that its first objective was the overthrow of the Ayala-Estigarribia regime rather than the establishment of any system. The deportation of Colonel Franco furnished a popular pretext for action. In consummating the uprising, however, other groups joined the army and the ex-combatants, such as the militant students and certain civilian elements hostile to the administration and the Liberal Party. Such participation was in part based upon economic grounds, discussed in despatches 293, September 3, 1935; and 324, October 8, 1935.7 Their victory almost certainly implies the eclipse of the Liberal Party although not necessarily the supremacy [Page 862] of another, such as the Republican, for the time being. The so-called extremist or allegedly Communist tendencies of some members of the Cabinet, the advanced program of the ex-combatants (see despatch 15, November 15, 19358), and the references in hand bills and similar literature circulated during the last few days to “foreign capital” et cetera probably will not influence the conduct of the Government to a dangerous degree although it is likely that Colonel Franco may find himself committed to numerous social reforms affecting land holdings, food prices, pensions and similar domestic questions. No indication of foreign policy has as yet been made but several of my informants are of the opinion that while the Chaco protocols may not be popular among all members of the new Government (in this connection see despatch 247 above cited) they will be respected, as is asserted by tonight’s newspapers. The army decree mentioned in paragraph No. 1 confers upon the Provisional President the power to convoke a constituent convention “to modernize the Constitution” but I am not informed regarding the intentions of the Government in this respect.
While unbiased information is not available it is probable that the authority of the Franco government is established throughout the Republic. The principal leaders of the liberal regime are refugees in legations in hiding, or have escaped to Argentina. This [they?] presumably only await a propitious moment to undertake to recover. For the moment, however, it is probably safe to assume that they are impotent. The uncertain element in any appraisal of the immediate prospects of the Provisional Government is General Estigarribia. There is reason to believe that he may be boisterous [sic] in the Chaco and that he might be able to utilize a portion of the forces there against Franco although he might be unwilling to weaken those forces in view of possible danger from the Bolivian side.
Concludes as No. 24, February 20, 7 p.m.9