361. Telegram From the Embassy in Honduras to the Department of State1

5018. Subj: Interim Government: Agreement at Last.

1. (C-Entire text) Foreign Government Information.

2. General Paz briefed me on August 15 on background of announcement same morning of new Cabinet.

3. He said that military had learned a lot from their crisis meeting with Liberals on August 11 (which lasted 4 and ½ hours). He described it as a very tough meeting. Both sides realized they had been talking past each other, and as a result both sides emerged with improved respect for each other. There was agreement to communicate far more often and an understanding that Assembly would not surprise Paz with decrees. Paz said he “thanks God that Honduras was saved”.

4. I observed that it would have been disastrous had any sort of coup occurred. I told Paz that the United States will simply have nothing to do with military coups, pointing to our actions in Bolivia. Paz responded readily that a golpe would have been suicidal. He said it would have been victory for leftists, adding that coups “are no longer possible.”

5. Paz reviewed Cabinet selection, expressing particular pleasure that Colonel Elvir emerged as Foreign Minister due to disagreement between Liberals and Nationals over Ministry. Paz noted that Ricardo Zuniga was very unhappy that his party did not get Foreign Ministry, [Page 893] while Liberals were pleased with Paz compromise choice. Paz also had praise for new Communications and Public Works Minister Casco, whom he described as young but a brilliant person. He mentioned that he was able to retain Finance Minister Valetin Mendoza because of General’s need to have at least one key person which he had his total trust.

6. With evident pleasure, Paz also revealed that he will have a body of eight counselors, made up primarily of his former Ministers including Callejas (Natural Resources), Zeron (Economy), Discua (Labor), and Coussin (Health). It was clear that Paz already misses his old Cabinet and very much wanted to continue receiving help from people he trusts.

7. I suggested to Paz that he might also encourage other groups to provide ideas and advice, such as business and labor groups, so that population not get feeling that his is government of military and politicians. Paz seemed to agree with idea.

8. Paz stated that heads of autonomous agencies will be named soon although he does not yet have suggested names from political parties.

9. He added that Gonzalo Carias, who is currently with Central Bank is a Liberal, will become Deputy Governor of the bank. Praxedes Martinez will remain as bank’s head.

10. Paz reported also that a number of changes in armed forces will be announced very soon, stemming largely from pressures from mid-career officers to move into command positions. Paz felt that these changes would stir press commentary but he said no one is being demoted. (It all sounded as if several senior persons would be kicked upstairs. Paz was not specific.)

11. Comment: We have a Cabinet at long last and it looks like a pretty good one. There were a few scary moments on the way to this new government but in their own characteristic, nerve-wracking way, the Hondurans worked things out through dialogue.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D800389–1039. Confidential; Priority; Limdis.