Villeda Morales had instituted progressive labor laws and an agrarian reform policy, which prompted accusations of Communist sympathies from the right wing in Honduras and the United States.

A coup attempt in 1959, suppressed by students and unionist supporters of Villeda Morales, provoked intense hostility towards the military, as well as the creation of an autonomous presidential guard.

Modesto Rodas Alvarado, the Liberal Party's candidate for president, ran on a demilitarization platform and was expected to win the election on 13 October 1963.

Beginning with a successful general strike in 1954, workers pushed for better pay, shorter hours, job benefits, unionization, and land reform.

On 7 October 1956, Lozano Díaz held a Congressional election which both of the country's major parties declared unfair and boycotted.

[4] Villeda Morales introduced wide-ranging progressive platform, including infrastructure development, school construction, labor regulations, and agrarian reform.

His policies generally won him praise from the Kennedy administration, but animosity from anticommunist hardliners (i.e. landowners and business executives) in Honduras and in the United States.

United Fruit president Thomas Sunderland wrote to Secretary of State Martin:[11] The events of today indicate that the situation in Honduras is growing more serious with the passing of time.

In spite of the affirmations made by President Villeda Morales in the presence of the American Ambassador that a copy of the proposed law would be shown to us today, Honduran government officials have declined to show us the bill.

[12] The Kennedy Administration pressured Villeda Morales directly, and after a visit to the White House in 1962 he made significant policy changes to undercut the power of the land reform law.

[20] The military sent representatives to meetings of the US-orchestrated Central American War Ministers group, which became CONDECA (Consejo de Defensa Centroamericana).

[21] During the Villeda Morales presidency, the Honduran military had greater allegiance to the U.S. than to the Liberal Party government—thereby exerting constant pressure on the government to follow U.S. policy mandates.

[25] On 12 July 1959, a coup led by Colonel Armando Velásquez Cerrato killed numerous people in an attempt to gain power.

Ildefonso Orellana Bueno argued, in a speech to the Constituent Assembly (and republished in El Cronista), for a reform of the 1957 Constitution:[27] The group of individuals clustered with the pompous name of 'Armed Forces' wants to convert themselves into a privileged and all-embracing caste, shielding itself to reach its goals in Title XIII of our fundamental law, from whose trench they are preparing to stab the back of the Honduran people, having now been converted not only in the devouring octopus of the national budget, but also in a real social threat, in an imminent danger for our own security, and in an enemy of the functioning democracy in which we have dedicated our faith.President Villeda organized a militarized Civil Guard (Guardia Civil), which reported to the President and sometimes fought openly with the military.

[30][31] Colonel Oswaldo López Arellano was offered the nomination of the National Party (Partido Nacional de Honduras, PNH) by the influential General and former President Tiburcio Carías Andino.

This cryptic response led to charges among the National Party (and the press) that the U.S. had pressured López Arellano not to participate in the election, because of Kennedy's opposition to military governments.

[32] The eventual nominee of the National Party, Ramón Ernesto Cruz, had served past dictatorships and was not popular with farmers, organized labor, or liberals in San Pedro Sula.

[35][36] Colonel López Arellano was proclaimed President and issued a declaration which described problematic elements of the former regime:[37] Villeda Morales and Rodas Alvarado were immediately deported to Costa Rica.

[39] The Voice of America quoted Ambassador Burrows stating that the "military golpe was justified due to the Communist infiltration into the government of Ramón Villeda Morales".