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

PE–11. Memorandum of Conversation, by the Ambassador in Peru (Achilles)¹

Lima, May 27, 1958

SUBJECT

• Gravity of political situation

PARTICIPANTS

• President Manuel Prado
• T. C. Achilles

I had for sometime been considering the advisability of attempting to impress personally on President Prado the gravity of the present political situation in the country and the necessity of more effective measures being taken to deal with the underlying problems. Receipt last Friday of Vice President Nixon’s thank-you letter² to him provided an occasion to request an appointment which was granted for 10:00 a.m. this morning. I reached the decision to take up these matters with him despite some trepidation in view of his great vanity and widely known reluctance to discuss or even admit the existence of serious internal problems. We spoke in French since neither my Spanish nor his English was up to a conversation of this delicacy.

After giving him Vice President Nixon’s letter which he read and for which he expressed appreciation, I said that I wished to speak of other matters as a friend of his, of Peru and of democracy. I had admired from the beginning of his Administration his efforts to strengthen democracy in Peru. France was not the only country struggling at the moment with a “crise de regime”. Peru was too and for the same reason, a very wide-spread feeling that the Government did not or could not exert sufficient authority to deal with the country’s pressing problems. I said that until a few months ago most of the dissatisfaction in Peru had been directed not toward revolution but toward more or less complete Cabinet changes. This was encouraging evidence of a growing maturity of democracy in Peru. At the present time, unfortunately, many people, and not just habitual conspirators or malcontents such as the Miro Quesadas,³ junior Army officers or the Accion Popular but honest and substantial people, were saying that it was too late for the situation to be solved by a Cabinet change since the President himself was unwilling sufficiently to face up to the problems involved. I hoped profoundly that they were wrong and that Peru could still show that political maturity which I believed it was capable of showing and which I knew was his primary objective. I hoped that the situation could still be saved but believed that the hour was already very late. It would be presumptions for me or any foreigner to offer him advice but I hoped that he could profit from the advice of the wisest, most honest, strongest and most patriotic Peruvians he knew, particularly those outside the Government, since there were always more good men outside any Government than in it, and that he would then act as his conscience dictated, but firmly.

To my surprise the President both listened to what I had to say without interruption and took it in good part. He launched into a long discussion which he continued for half an hour, although he was repeatedly interrupted by telephone calls and his aides advising him that others were waiting. He began with a diatribe against Pedro Beltrán. During his previous Administration⁴ he had offered Beltrán various Cabinet posts but the latter had declined and accepted only the Embassy in Washington.⁵ During his present Administration he had again at various times offered Beltrán Cabinet posts but the latter, while incessantly criticizing, refused to accept responsibility. Beltrán was playing a double game, accusing the Government of not exercising authority and at the same time stirring up dissatisfaction against it.

He turned to attack the leading bankers, particularly Enrique Ayulo, President of the Banco de Credito, and Alfredo Alvarez Calderon, principal lawyer for the Bankers Association. He recounted their past misdeeds and corrupt practices. He said that they and many others longed for the favored position they had had under the Odria⁶ regime and were seeking to bring down his Government. They were doing this by refusing to accept any settlement of the bank strike,⁷ which they had turned into a “lockout”. A decree had been prepared for his signature yesterday terminating this situation but he had not signed it in the hope that the banks would reopen this morning. Since this had not happened, he would sign the decree. (When I left, the Minister of Labor, the President’s nephew Max Peña Prado, and a number of others whom I believe were members of the Bank Workers Union, were waiting.)

The President said that he had never lacked energy. It was easy to issue decrees (I was tempted to interject that it was too easy to issue them but hard to make them stick) and it would be easy to use armed force. This was not his way and he preferred democratic solutions.

At this time he digressed to express for the first time patently sincere regret at the unfortunate incidents which had occurred during Vice President Nixon’s visit. He said he profoundly regretted the incidents and the blot they placed on Peru’s reputation but what could he do? The Prefect of Lima had been shoulder to shoulder with Nixon in the mobs. I said that I had been at all times shoulder to shoulder with the Vice President, or at least as close to him as anyone could stay, and that I had not noticed the Prefect. He indicated surprise and said he had photos to prove it. (He could be correct. I know the Prefect only slightly and might not have recognized him. Anyway, I did not notice him nor did he have any noticeable effect on events.) Had he ordered mounted police or the Army to charge the demonstrators or the police to enter the sacrosanct university premises, the situation would have been far worse. I observed that the police had known in advance the names of those who were organizing the demonstrations. He said he had personally taken steps to have the principal instigators arrested and he would see they were punished although Peruvian justice did not operate in quite the same way as Anglo-Saxon justice.⁸ He said he had done his best to obtain passage by Congress of a law regulating labor unions and a law enabling the Government to act against Communists but that in each case he had been widely accused of incipient dictatorship.

I reiterated the hope that he could find answers to his pressing problems which would be both democratic and effective and that he could obtain the advice, assistance and support of the best men he could find outside as well as inside the Government. He thanked me and said that he would be glad to receive me at any time I wished to discuss such matters with him. I said I had nothing further to say at this time but that I understood the French Ambassador,⁹ wished to talk with him along similar lines. (I learned later that he has asked the French Ambassador to see him at 7:00 p.m. tonight.)

Our conversation concerning Mr. John R. Neale has been reported separately.¹⁰

1. Source: Department of State, Central Files, 723.00/5–2758. Secret. The source text, initialled by Achilles, was sent to the Department of State under cover of despatch 910 from Lima, May 27.
2. Not found in Department of State files.
3. Reference is to the Miro Quesada family which stood on the extreme right in Peruvian politics.
4. The previous administration of President Prado was during the period December 8, 1939–July 28, 1945.
5. Pedro Beltrán served as Peruvian Ambassador to the United States during the years 1944–1946.
6. Manuel A. Odría y Amoretti, Acting President of Peru, October 27, 1948–June 1, 1950; President, July 28, 1950–July 28, 1956.
7. The Embassy reported on the bank strike, April 17-May 22, in despatch 959 from Lima, June 7. (823.062/6–758)
8. The Embassy reported on the arrest on May 16 of the “Communist leaders allegedly responsible for demonstrations May 8 against Vice President Nixon in despatch 875 from Lima, May 20, 1958. (723.00(W)/5–2058) In despatches 933 from Lima, June 3, and 989, June 17, the Embassy reported on their release. (723.00(W)/6–358 and 723.00(W)/6–1758, respectively)
9. Léon Brasseur.
10. In telegram 1068 from Lima, May 27, Ambassador Achilles recounted the Peruvian Government’s request that John R. Neale continue indefinitely as USOM Director or for a protracted period to ease the change to a new Director. (110.402–ICA/5–2758) In telegram 1069 from Lima, May 27, Achilles reported Neale’s willingness to remain during a transition period until September 1. (110.402–ICA/5–2758)