815.00 Revolutions/163: Telegram
The Minister in Honduras (Lay) to the Secretary of State
[Received June 5—2:05 p.m.]
114. No important engagements between Government and rebel forces for 10 days. Government demobilizing about 2,000 men. President informs me Ferrera yesterday at Dulce Nombre with about 300 poorly armed men and possibly heading for Nicaraguan border pursued by Government forces. Other authorities opine Ferrera will join Sandino. This opinion prompted by a desire to have American Government declare Ferrera an outlaw like Sandino whereas Ferrera has respected noncombatants. Many persons would not be averse to Ferrera’s gaining control of the Government because of their belief in his integrity and ability to govern. I deem it unlikely that Ferrera would jeopardize this general good repute by joining forces with a common bandit.
Greatly reduced income, inability to meet pressing obligations, and obtain funds, acute business depression seriously embarrassing Government [Page 578] which may eventually collapse. United Fruit Company has discontinued operations Cuyamel district further increasing unemployment.
Repeated to Legations, Salvador, Guatemala and Managua, for Comsperon.