Foreign Relations of the United States, 1958–1960, Volume V, Microfiche Supplement, American Republics

NI–17. Telegram from the Ambassador in Nicaragua (Whelan) to the Department of State¹

Managua, August 18, 1959, 5 p.m.

55. Following Embassy conclusions reached after Ambassador’s personal attention Department’s telegram 36.²

1. In view current Caribbean unrest, only “responsible” opposition in terms of U.S. standards is that which has refrained from active steps looking to violent overthrow GON. This particular segment Conservative and Independent Liberal opposition believed to be small part total opposition. It is only moderately influential political in financial and other economic circles but is aspiring to greater if not predominating influence assuming this position can be attained as result intransigent Conservative and Independent Liberal attitude in face GON’s overwhelming strength.

Embassy has valid reason believe only small minority so-called responsible opposition leaders identified this category would not at this time vocally object to EXIM loan. All others this classification would either be highly critical of loan or adopt resentful attitude toward U.S. in protest over alleged U.S. economic intervention in support Somoza’s dynasty and economic domination. Most representatives this category have in past repeatedly told Embassy their choice between (A) peaceful coexistence with GON assisted by U.S. loans and (B) economic deterioration implicit in other groups active efforts for exchange of government by any means including total isolation from U.S., would unequivocally be latter. Hardship to themselves involved this choice they contend would be assumed as their contribution eventual welfare Nicaragua.

Basis past experience Embassy believes however, these same patriots if loans were granted would not refuse share directly or indirectly in its benefits.

2. Brief comment other opposition elements follows: Hard-core Conservatives and its offshoot Conservative Youth. Both are estimated to be so basically opposed Somoza regime on emotional grounds regardless damage to country or odds against them that any consideration to GON however slight will be interpreted as direct U.S. opposition their aspirations. Because they have shown themselves so resentful of U.S. dealings with GON in minor matters, it is inconceivable to Embassy that these groups would not as full resent EXIM loan under any conditions approximating those now applying to Nicaraguan situation. On occasion recent contemplated $12 million bond issue to be underwritten by U.S. banks spokesmen this group publicly said new government would not honor debt. Such statements would seem good indication irresponsibility.

3. Independent Liberal Lacayo Farfans violent reaction to loan negotiations set forth Department telegram 38³ can be taken as reliable indication dedicated opposition Independent Liberal faction. In this connection Embassy reasonably certain that lacking issue of loan, Lacayo Farfans’ supporters would seize upon any pretext attack U.S. if they feel would help their cause against Somoza psychologically. Embassy does not regard Lacayo Farfans group responsible as presently constituted.

4. In Embassy’s opinion balance opposition composed adventurers clearly linked with foreign international schemers and Communists and devoid any claim responsibility. Many of this group working with classification three above. Their attitudes toward loan will of course be completely adverse to U.S.

Despite general impression of considerable opposition to loan created by foregoing evaluation Embassy wishes emphasize its conclusion that substantial majority Nicaraguan people who have not abandoned task of forming nation through constructive effort would welcome loan as measure greatly needed bolster economy in difficult circumstances. It is this majority which in last analysis will eventually assert itself in present difficulties and for benefit of which Embassy strongly recommends loan be granted soon.

These views offered as careful evaluations based on Embassy’s intimate knowledge opposition motivations rather than as result current inquiries. Embassy convinced that any inquiry to groups above mentioned however discreet in present circumstances would be taken as opportunity wage anti-loan campaign in which U.S. would be prominently featured and as result of which country’s future economic prospects would be further aggravated. For this reason Embassy earnestly recommends it be excused from requirement making inquiries to ascertain viewpoints.

In conclusion with reference Department’s information to effect that opposition Somoza regime has increased because of shooting Leon students,⁴ Embassy points out that example opposition statements to contrary there is no evidence to support their exaggerated claims. Internally vast majority Nicaraguans remain unmoved politically by deplorable Leon occurrence. Student demonstration reactions are natural result of involvement their own numbers and in view of known Communist agitation in university circles it was indicated that disturbances would sooner or later occur with or without shooting incident.

Whelan

1. Source: Department of State, Central Files, 817.10/8–1959. Secret; Priority; Limited Distribution. Information on the source text indicates that the telegram was not for distribution outside of the Department of State.
2. Telegram 36 to Managua, July 31, informed the Embassy that the Export-Import Bank was considering a loan to Nicaragua and solicited the Embassy’s evaluation of the “responsible” opposition’s attitude toward the United States if the loan were granted. (817.10/7–3159)
3. Telegram 38 to Managua, August 3, transmitted the text of a message from Farfans to Rubottom in which the former protested the U.S. plan to extend Export-Import Bank loans to Nicaragua. (817.10/8–359)
4. On July 23, the Embassy at Managua reported that a communist inspired university student demonstration at León, having antagonized the National Guard, resulted in the Guard’s killing of at least four students. (Telegram 26 from Managua, July 23, not printed; 717.00/7–2359)