823.01/20: Telegram
The Ambassador in Peru (Dearing) to the Secretary of State
[Received September 14—1 a.m.]
207. It seems to me the time has come for the Department to consider whether recognition should or should not be accorded the present military junta as the government of Peru. Upon my arrival in Lima September 5th the detention of Captain Grow and Mr. Sutton and the uncertainty of the junta’s intentions with regard to ex-President Leguia made consideration of recognition inadvisable; the question was therefore not raised and I merely sought to carry on with the junta authorities for the protection of American lives and interests. In my contact with junta the question of recognition has arisen but once, midnight September 7th, when I requested protection for the Americans and property at Cerro de Pasco. Sanchez Cerro pointedly stated that our Government had not recognized his and that there was no formal obligation upon him, but that junta was determined to protect foreign life and property.
I have observed the action of the junta and the situation in the country as carefully as possible and it is my belief:
- First, that the junta government is acquiesced in by practically the entire population of the country;
- Second, that it controls all Peruvian territory and is maintaining public order;
- Third, that it is willing and able, and is living up to its international obligations;
- Fourth, that it intends eventually to restore the country to a constitutional regime.
It is extremely difficult to predict the future, but the probabilities are that junta will be able to maintain itself for some time to come; this feeling is shared by most of the Americans and colleagues with whom I have spoken. I offer the following comment on the preceding points.
(1) I have held a number of conferences with Americans, colleagues and other well-informed persons since I reached Lima. The acquiescence of the people is limited chiefly by dissatisfaction in the Navy where the officers are said to be opposed to the junta and some disaffection in the Army in the north. It is difficult to estimate the importance of the attitude of the Navy. Some think a potential counter-revolutionary leader exists among the superior officers in the person of Captain Pizarro; others declare he has supinely accepted orders from three different governments, has lost any real opportunity he may have had and that there is not sufficient vigor and initiative in the Navy to cause it to do anything although it may continue to sulk on account of professional jealousy of the Army. Leguia through indecision seems to have lost a real opportunity to make use of the [Page 751] Navy to regain power (see report of Captain Spears to Naval Intelligence, also my telegram No. 153 August 26, 1 p.m.).
The comment about the discontent in the Army units in the north is so vague as to be almost worthless. It is a fact, however, that a considerable number of experienced officers in the higher ranks are being removed by the Government and being replaced by younger men and without doubt the dismissed officers will be a source of discontent. This discontent will be accentuated if current rumors of reductions to be made in the Army pay are substantiated.
(2) An exception to the maintenance of public order is the Cerro de Pasco mines where there were recently serious mob outbreaks. The blame seems to rest chiefly upon the prefect and possibly to some extent his superior officer, the Minister of Government Jimenez, who, I am told, is radical and anti-American. This is offset by the prompt and energetic action of Sanchez Cerro, reported in my telegram No. 192, September 8, 4 p.m.,10 and his despatch of further troops at the Embassy’s request a day later; see my telegram No. 194, September 9, 1 p.m.10 I am convinced of the sincerity of the Government and its determination to maintain order and to protect life and property. Last reports are that the situation is quieter and that work has been resumed.
(3) Among the first commitments of the junta was a statement that treaties in force between Peru and foreign countries would be respected and that international obligations would be met; see last paragraph my telegram No. 166, August 29, 5 p.m. It is a fact that even in the case of private contracts renewals or some fair settlement has been made in practically every case. In the heat of the first moments the new authorities made some rash statements but the junta has receded from extreme positions, walks more carefully and evidently intends to observe its international obligations.
(4) Sanchez Cerro has declared that his Government is a complete break with that of the Leguia regime. It would seem therefore that legality and constitutionality might be considered to begin de novo with his regime. He has stated, however, that when the country is prepared elections will be held, constitutional government be resumed and the military junta brought to an end. They were repeated by Sanchez Cerro with emphasis at a large public banquet September 11th.
I beg to comment on the factors affecting the recognition question as follows:
Captain Grow, Messrs. Sutton, Gildred and Hebard have been released and the first three have given their personal engagements to reply to any questions the junta may wish to put to them. It is generally expected that they will be required to appear before the court of sanctions for trial.
There is a question as to whether we should seek some guarantee as to the nature of this trial by a specially organized court in order to secure justice and prevent any persecution due to anti-Americanism and possible personal rancor. Sutton says he owes his trouble to the [Page 752] personal enmity of … a land owner in the North whose plans were in conflict with Sutton’s. In the case of Captain Grow there is said to be a personal resentment on the part of Sanchez Cerro who feels the success of his movement was jeopardized by Grow’s flight towards Arequipa.
At first it appeared as if threatened mistreatment of ex-President Leguia might create a serious situation and be a real obstacle to recognition. I learn however that he is being well treated.
The complexion and composition of the first sanctions tribunal made it seem as if personal vindictiveness would have an opportunity to vent itself upon Mr. Leguia. The composition of the present and second sanctions tribunal is acknowledged to be excellent and calculated to insure justice. The president of the tribunal is recognized as being of high character, able, eminently just and even friendly to Leguia.
It is quite clear from statements made to me by Captain Spears and Dr. MacCornack that Leguia had at first an excellent opportunity to leave which he did not take and that his indecision as much as anything else is responsible for his present imprisonment on San Lorenzo.
Dr. MacCornack who has seen Leguia almost daily since he has been there tells me his spirit is broken and that while his physical condition is not particularly bad he is inclined to refuse to eat and says that he wishes to die. Dr. MacCornack thinks it possible he may die within a few months although he may live much longer. In short, treatment of Mr. Leguia by the junta as an obstacle to recognition would seem to be removed.
Reaction of recognition upon American interests here. Thus far Sanchez Cerro government has been satisfactorily responsive to requests for protection of these interests and the persuasion [possessions?] of American citizens. While somewhat slow in releasing Grow, Sutton and Gildred, this was accomplished within a relatively short time considering all the facts in the cases.
American interests in general feel that their business is reasonably safe and favor early recognition as creating a more favorable atmosphere.
Cerro de Pasco. Local authorities although forewarned did not take adequate measures to prevent an outbreak, but when Sanchez Cerro was informed he did. Order has been guaranteed by the junta and work resinned, the situation becoming more satisfactory.
Kingsmill, the manager favors early recognition and will make claim for damages.
Grace and Company. I am reliably informed that Sanchez Cerro told the manager of the Grace Company that he was entirely satisfied [Page 753] with the company and it could expect his support as it had never dabbled in politics.
Panagra. Captain Harris while not having seen Sanchez Cerro tells me that he is not at all apprehensive of the situation in which the company finds itself by reason of the new Government and favors early recognition.
All America Cables. The same applies to All America Cables. Their home office has stated that it does not wish to take any action with respect to establishment of radio telephony for the present, thinking better to await congressional approval of new contract which may be long deferred. Early recognition favored.
Frederick Snare Corporation. Mr. Seeley, the local manager, has had very satisfactory interviews with the Government who have entirely approved Callao harbor project.
Pan American Petroleum Company’s representative, Mr. Bancroft, favors early recognition.
Naval Mission. The attitude of the new Government towards the Naval Mission has been entirely satisfactory. Admiral Pye, Captains Spears and Gunnell, and Commander Compton have been retained in an administrative capacity which Admiral Pye prefers to the executive position the Mission formerly occupied and have resumed their duties. Two of the members of the Mission have been released, one at his own request and very generously treated.
There has been considerable comment in the papers as to our general policy in according recognition to new Government with particular emphasis upon Central American situation and the declarations made at the Pan American Conference in Habana to the effect that we would not recognize governments created by violence. Reports emanating from Washington are to the effect that each case will be treated on its merits. It is my opinion that in the case of Peru we should act in accord with the usual precedents of international law.
A certain atmosphere has been created by the recognition accorded by Bolivia, Italy, Ecuador, Chile, Paraguay and the Holy See and the report that the British, French and German representatives have made favorable recommendations to their Governments. I believe it is just as well that we have not seemed to influence the action of Chile or any other Latin American countries in according recognition but I feel there is a certain disadvantage in coming too far behind in according recognition ourselves in case there are no definite reasons for not doing so.
Seligman-National City Bank fiscal agency. This is the American interest whose position is especially engaged with regard to the junta. At the moment discussions are going on between Mr. Stahl, representing the fiscal agency, and the Minister of Finance respecting some [Page 754] form of relief for the $600,000 monthly payment of the national loan service. The junta desires the fiscal agents to establish a 6-month credit for them in gold dollars to pay the service, the junta to give pounds and bonds as collateral. The bankers feel that this security is not adequate but that a sufficient amount of gold dollars in the gold reserve in New York or in the reserve bank in Lima should be earmarked for this purpose. The first payment of the loan service was in pounds on the 1st of September, even during the first difficult days the Peruvian authorities not being able to get gold dollars at that time. The next payment is due October 1st.
When he spoke to me several days ago, Stahl said he hoped recognition would not be accorded until some favorable arrangement had been made. It is difficult to judge the extent to which recognition should be related to the financial situation and whether recognition would help or hinder the negotiation. I suggest that the Department call a representative of the banks to Washington for discussion and that the Embassy be instructed as to the Department’s attitude. Mr. Stahl agreed with me that a conversation between the Department and the bankers is necessary.
Withholding recognition seems likely: (1) To create ill-will and promote anti-American feeling; (2) to lessen our prestige; (3) to make business more difficult for Americans having interests here, current operations of the banks in their relations with the central authorities for instance; (4) to leave the junta with a sense of less responsibility; and (5) make it difficult to secure protection and fair treatment and to establish claims.
According recognition soon or promising it for some early definite date will tend, it seems to me: (1) To lessen anti-American feeling; (2) to emphasize our friendship for Peru and Peruvians and thus preserve normal good relationship even if the present junta should be eventually overthrown and another take its place; (3) to show that we are acting in accord with the usual precedents of international law which will give satisfaction throughout Latin America; (4) to create a better atmosphere for American business and for the Americans who have contractual relations with the Leguia government and have a favorable bearing notably upon the cases of Grow and Sutton; (5) to place a more definite legal responsibility upon Government for the protection of American lives and property and American rights in general; (6) to strengthen the morale and prestige of this Government and assist it in providing an effective administration. The whole situation can probably best be brought out by inquiring “why should we not accord recognition?”
It is difficult to say what the future will produce. The weak features of the junta government are naturally enough the same as in the Leguia government. Nepotism is already in evidence. Five [Page 755] brothers of the chief of the junta have been appointed to important governmental places and other relatives have been appointed, also the chiefs of the various ministries have appointed their friends. The removal of a number of the senior officers of the Army and the appointment of junior officers in their places will undoubtedly cause discontent. Discontent will also be caused if reductions are made in Army pay. Leguia’s special police who have been pushed aside, while poorly officered, are good soldiers having been carefully chosen from the Army and may increase the ranks of the malcontents.
I believe however that the advantages are on the side of early recognition and suggest early consideration of the matter. If the Department believes recognition should be made conditional upon certain guarantees, assurances or acts I shall appreciate being informed as to what the Department desires, what are its objectives and what will be its policy. Please instruct me fully.