822.00 Revolutions/90

The Minister in Ecuador (Gonzalez) to the Secretary of State

No. 941

Sir: In confirmation of my telegrams No. 61 of October 23, 9 a.m., 1937, and No. 62 of October 24, 4 p.m., 1937, I have the honor to report that the political situation which became acute on October 18th with the resignation of General G. Alberto Enriquez, Minister of National Defense, culminated on the morning of October 23rd in the resignation of the Acting Constitutional President, Federico Páez, the dissolution of the Constituent Assembly, and the assumption of the Supreme Power by General Enriquez.

It is still not certain as to what were the fundamental reasons which caused the change in Government. The most persistent reports are that during the celebrations at Guayaquil on October 9th, which were attended by the President and most of the Cabinet, General Enriquez was informed by certain prominent persons of that city of many incorrections in the Government involving malfeasance of office, bribery and graft. One or two notable cases were reported … It is said that upon the return of General Enriquez he prepared a four hundred page report setting forth the charges against different officers which was submitted to the consideration of President Páez. Apparently the action taken by the President was not satisfactory to General Enriquez who resigned on the 18th of October and left the city. President Páez went to the country place of Enriquez that evening and induced him to withdraw his resignation. The only information reported in the press during the following days was to the effect that the resignation had been due to a difference of opinion on administrative matters.

However, on the evening of October 22nd it was apparent that the situation had reached a point where important developments must follow. It is reported that General Enriquez, supported by the Minister of Finance, insisted upon the immediate removal of many Government and Semi-Government officials and the immediate dissolution of the Constituent Assembly. It is understood that President Páez was disposed to accede to the first suggestion, but that [Page 472] as concerned the Assembly he categorically refused to take any steps looking toward its dissolution. He held that the Assembly was entirely of his making and that, therefore, he could not and would not dissolve it. The Department will recall that the Armed Forces were never in accord with the convocation of the Assembly. It is reported that while Colonel Salgado, the Minister of Government, and Lieutenant-Colonel Guerrero, the Minister of Social Prevision, were opposed to the holding of the Assembly, they were of the opinion that the Assembly should not now be dissolved. This opposition to General Enriquez subsequently resulted in the retirement of these two officers from the Government.

The exact nature of the dissatisfaction of General Enriquez with the Assembly is not yet clear. It is reported that he was primarily displeased with the fact that the Assembly has been in session some two months without accomplishing anything definite. Also, individual members were accused of improper practices contrary to the best interests of the State. However, more important was the fact that the Assembly was not representative of the country in view of the abstention of the organized political parties in its election.

An important factor in the developments of Saturday morning was that President Páez was not at all desirous of continuing as the Chief Executive of the Nation which position he has made clear on innumerable occasions both publicly and privately. It is reliably reported that if he had wished to continue in power he could have done so since he had the support of the majority of the armed forces. He finally decided that he would withdraw and he presented his resignation to the Constituent Assembly which had appointed him Constitutional President ad interim. Upon this decision a committee of ten high army officers resolved to allow General Enriquez to assume the Supreme Power and to ignore the Constituent Assembly. The decree announcing this action stated that General Enriquez had assumed the Supreme Power pending the convocation of a new Assembly elected by the duly organized political parties. A further decree adopted the 1906 Constitution in so far as its provisions are not contrary to the purposes of the new Government.

The situation on Saturday morning was potentially critical in view of the fact that division of opinion existed among the armed forces. It is reported that the majority preferred that President Páez continue as the head of the Government. However, when the President made it clear that he was determined to retire to private life, this had a steadying influence on subsequent developments.

During the course of the day a Manifesto was issued stating the reasons why the Army had again assumed the Supreme Power. The substance of this statement was that the Government had degenerated [Page 473] into cliques which were enriching themselves at the expense of the nation.

In view of the decision of the President to withdraw, all of the Cabinet remained loyal to Páez and resigned, with the exception of Lieutenant-Colonel Heliodoro Sáenz who was immediately reappointed Minister of Finance and temporarily charged with the Ministry of Foreign Affairs. Lieutenant-Colonel Jorge Quintana was appointed Minister of Government and Colonel Guillermo Freile Cruz, Chief of Staff, was appointed Minister of National Defense. It is generally understood that General Enriquez desires Carlos Manuel Larrea, the former Minister for Foreign Affairs, to continue in that post. The latter, out of personal loyalty to President Páez, has repeatedly refused but this morning’s press indicates that he will probably accept.

The President of the Constituent Assembly, Alberto Donoso Cobo, was arrested. He was subsequently released but yesterday he was again put in prison. The nature of the charges against him have not been revealed. Alberto Wither Navarro, President of the Central Bank of Ecuador and former Minister of Finance, has also been arrested. The Government revealed that the charges against him are in connection with a decree issued while he was Minister of Finance involving the payment of 400,000 sucres by the Government to the Central Bank. This morning’s press contains a statement by the Directors of that bank which indicates that the transaction was entirely correct. Under the circumstances it is thought that Mr. Wither is being held in prison because of his outspoken antipathy toward General Enriquez. It is known that these two gentlemen have had many personal disagreements because of the excessive expenditures by General Enriquez for armaments. Also, it is reliably reported that Mr. Wither actively advocated armed resistance to the pretentions of General Enriquez to assume power on the morning of October 23rd.

It is anticipated from current reports that the Board of Directors of the Central Bank as well as that of the Mortgage Bank will be required to resign. A commission has already been appointed to investigate the operations of the former and a like one will probably be designated in the near future to examine into the affairs of the Mortgage Bank. It is expected that other committees will investigate the contracts concluded by the former Minister of Public Works with the purpose of determining whether they are to the best interests of the State and, particularly, whether there has been any bribery. The Scotoni contract8 for the construction of the Esmeraldas Railway [Page 474] will receive particular attention. It is said that the German merchandise credit arrangement is being studied with a view to its repudiation.

Respectfully yours,

Antonio C. Gonzalez
  1. This contract was between Eugene and Edwin Scotoni, citizens of Switzerland, and the Ecuadoran Government, for the completion of the railroad between Quito and the port of San Lorenzo in the province of Esmeraldas.