Minutes of a Meeting, Held in the Department of State, August 13, 1954



  • El Salvador
  • Participants: Assistant Secretary Holland
  • Ambassador Michael J. McDermott 1
  • Mr. Raymond G. Leddy
  • Mr. John W. Fisher

President Osorio

Ambassador McDermott said one of the principal problems in San Salvador was handling the President and other government officials. Osorio was to be treated as an Indian, but a very sagacious one who had acquired considerable political knowledge during the past year. Osorio will do nothing which will make him appear as a satellite of the United States. This attitude is traditional in Salvador, which is only too conscious of the fact that it is the smallest country in the hemisphere. Ambassador McDermott recalled how the Salvadoran delegate, Guerrero, launched a strong anti-U.S.-intervention movement at the Sixth Inter-American Conference in 1928.2 The seeds planted there have flourished throughout Latin America.

Osorio not only will sign nothing which would suggest making any Salvadoran act conditioned on U.S. approval, but is chary of receiving grants or gratuitous favors. An example of the kind of thing he wants from the U.S. is his request to Ambassador McDermott that the United States give its moral support to Salvador’s efforts to get Honduras to join with Salvador in constructing a through toll road from La Union in Salvador to Puerto Cortes on the Caribbean coast of Honduras. This would give Salvador an alternative outlet to the Atlantic, freeing it from dependence on the IRCA. The uncompleted portions of the road are all in Honduras and would require about $12 million to finish.

Osorio proposes an IBRD loan to be guaranteed by the two Central American Governments. President Black of the Bank is supposed to be favorable, but Galvez is reluctant. Osorio wants the United States to help get Galvez in line. Mr. Holland thought offhand that the highway was a meritorious project.

Ambassador McDermott described Osorio’s careful neutrality during the Castillo Armas rebellion. In conversations Osorio said Salvador [Page 1024] “would incline” toward Honduras in the event Arbenz won and invaded that country. Lower ranking Salvadorans were much more affirmative in expressing support of Honduras.

Communist Problem

The Ambassador stated it isn’t presently of consequence but it could easily become so. While the rich are becoming richer, the poor are getting poorer, even despite high coffee prices.

Osorio is trying to expand the middle class, and has not directly clashed with the rich. He has no organized opposition either from right or left, and appears to be drifting toward the conservative side. Osorio has no visible successor. Colonel Bolaños, a presidential aspirant, would be an unfortunate choice. He is indecisive and ignorant of government.

Osorio showed Ambassador McDermott letters from students, women and certain union groups praising his neutral position. Osorio told Ambassador McDermott the signers were “Communistic”.


Salvador’s labor movement is Government sponsored and controlled. No confederation is allowed to exist and the Government restricts the right to strike. Ambassador McDermott pointed out that Salvadoran railroad workers have never forgotten that the Guatemalan railroad union failed to support them a number of years ago, and the Salvadorans have ever since withheld their support from the Guatemalan organization.

Somoza 3

The Ambassador characterized Somoza as a man bent on establishing a family dynasty in a country which he virtually owns. Somoza is a rich man and has not avoided rough stuff to become so.

Osorio is neither intimate nor distant from Somoza. Osorio’s interest in obtaining anti-aircraft guns to protect his new Lempa hydroelectric dam was perhaps prompted as much by the existence of the Nicaraguan air force as the Guatemalan.

Figueres 4

Osorio tried to be friendly with Figueres, but feels that Pepe went back on his word, given during a visit to Salvador as President-elect, to refrain from stirring up trouble with Somoza. As a result, Osorio would mediate the present squabble only on written request.

[Page 1025]

Ambassador McDermott thought Figueres … caused his country to go broke in his … war in 1948. He thought he would do so again. Figueres voices support of the United States, but that is as far as it goes.

Army Mission Agreement

Ambassador McDermott had not seen the latest instruction on this topic, which arrived in Salvador after his departure for Washington. He will attempt again to conclude the agreement, held up by certain Salvadoran nationalistic feeling’s relating to our article on exclusive functioning in the military advisor field. The Salvadorans like the present Army Mission Chief, Col. Machery, and would probably keep him on in the country indefinitely despite the continuing lack of an agreement.5


There has been no progress toward agreement since Osorio took up the question to “study”. It was recalled that the Salvadorans originally insisted on maintaining secrecy at least until after desired military equipment arrived in the country.

Ambassador McDermott felt we should not push it but let the Salvadorans know, at least for the present, that a military defense assistance pact with us is available if they want it.

It appeared that Salvador was principally interested in a military agreement as a means of acquiring a loan for the purchase of arms. This is, of course, unfeasible.6

Commercial Treaty

The United States proposed a revised Friendship, Commerce and Navigation treaty with Salvador months ago,7 but has had no response. Ambassador McDermott recommended that, if Salvador desired such a treaty, it should be negotiated in Washington with Ambassador Castro.

Technical Assistance

The agricultural program has been concluded and the industrial productivity agreement is progressing toward conclusion.

[Page 1026]

Inter-American Highway

Salvador was slow to take up and match the proffer of $500,000 to continue work on the Inter-American Highway. Salvador’s share was $200,000. Work was started and scheduled for completion in December 1954, but it has gone so slowly that it will be at least a year late. Salvadorans have worked up very little interest in our desire to pave the 50 miles at the eastern end of the highway.

[Here follows discussion concerning the Embassy’s need for clerical assistance.]

Rio Conference 8

Ambassador McDermott said Salvador’s basic position was that there should be a floor price on coffee. Proponents of this thesis argue it would give the necessary assurance to permit growers to pay higher wages. Mr. Holland said the United States could obviously accept no such proposition.

  1. Ambassador McDermott was in Washington for consultations at the Department of State.
  2. For documentation on the Sixth International Conference of American States, held at Habana, Jan. 16–Feb. 20, 1928, see Foreign Relations, 1928, vol. i, pp. 527621.
  3. Anastasio Somoza García, President of Nicaragua.
  4. José Figueres Ferrer, President of Costa Rica.
  5. An Agreement providing for a U.S. Military Mission to El Salvador was signed at San Salvador, Sept. 23, 1954, and entered into force, Nov. 17, 1954; for text, see TIAS No. 3144, or 5 UST (pt. 3) 2870.
  6. No military assistance agreement was signed with El Salvador in 1954.
  7. No treaty of friendship, commerce, and navigation was signed with El Salvador in 1954.
  8. Reference is to the Meeting of Ministers of Finance or Economy of the American Republics as the Fourth Extraordinary Meeting of the Inter-American Economic and Social Council (commonly referred to as the Rio Economic Conference), held at Quitandinha, Brazil, Nov. 22–Dec. 2, 1954; for documentation concerning the meeting, see pp. 313 ff.