REVIEW OF THE WORLD SITUATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67-00059A000500080013-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 16
• Document Creation Date: December 9, 2016
• Document Release Date: October 10, 2000
• Sequence Number: 13
• Publication Date: January 19, 1949
• Content Type: REPORT

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COP NO.
SECRET
FOR THE CHIEF,CIA LIBRARY
REVIEW OF THE WORLD
SITUATION
Published 19 January 1949
CENTRAL INTELLIGENCE AGENCY
i
SECRET
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This document contains information affecting the na-
tional defense of the United States within the meaning
of the Espionage Act, 50 U.S.C., 31 and 32, as amended.
Its transmission or the revelation of its contents in any
manner to an unauthorized person is prohibited by law.
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1. This copy of this publication is for the information and use of the recipient
designated on the front cover and of individuals under the jurisdiction of the recipient's
office who require the information for the performance of their official duties. Further
dissemination elsewhere in the department to other offices which require the informa-
tion for the performance of official duties may be authorized by the following:
a. Special Assistant to the Secretary of State for Research and Intelligence, for
the Department of State
b. Director of Intelligence, GS, USA, for the Department of the Army
c. Chief, Naval Intelligence, for the Department of the Navy
d. Director of Intelligence, USAF, for the Department of the Air Force
e. Director of Security and Intelligence, AEC, for the Atomic Energy Com-
mission
f. Deputy Director for Intelligence, Joint Staff, for the Joint Staff
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Department or Agency
2. This copy may be either retained or destroyed by burning in accordance with
applicable security regulations, or returned to the Central Intelligence Agency by
arrangement with the Office of Collection and Dissemination, CIA.
DISTRIBUTION:
Office of the President
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REVIEW OF THE WORLD SITUATION AS IT RELATES TO THE SECURITY
OF THE UNITED STATES
1. In Europe generally, a moment of temporary deadlock and stocktaking seems
to have been reached. Situations that have been previously noted are being developed
tactically rather than strategically. New developments can be anticipated as the
US-USSR balance-sheet is drawn up.
2. The Dutch "police-action" in Indonesia will have repercussions far beyond the
particular situation it was designed to settle. A large number of interlocked security
problems are raised for the US because a wide range of security interests is simultane-
ously affected. In Asia there is the general question of US influence in competition
with USSR influence, and the related questions of a solution to the Asiatic colonial issue
and of a political stabilization that will block the spread of Communism. It is not con-
sidered, in spite of superficial immediate success, that the Netherlands can control the
situation over the long run.
3. The Chinese National Government is being edged nearer to final collapse and no
realistic means is presently at hand to prevent the establishment of a Communist-
dominated regime. The fact that Chiang Kai-shek's government has prepared a
retreat in Taiwan has considerably changed the situation in this strategically important
island.
From the US point of view, the situation in Greece is deteriorating; in Turkey,
remains firm and unaffected by recent cabinet changes; in Iran, is showing improve-
ment. Israel, now that it is a state in being and has a locally superior power founda-
tion, is coming face to face with its internal economic and political problems. The
Arab States, with the exception of Saudi Arabia, are beginning seriously to feel the
aftermath of their defeat. They may well be approaching a critical point in their
postwar history, as social and economic problems increase and traditional political
authority weakens.
Tito's position is drawing close to the point where he must show his hand and
choose between the contradictory lines-trade-ties with the West and foreign policy ties
with the USSR-he has been trying to follow.
Note: This review has not been coordinated with the intelligence organizations of the Departments
of State, Army, Navy, and the Air Force. The information herein is as of 17 January 1949.
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The only point of interest concerns two principles of inter-American relations-the
recognition of new governments established by force, and the handling of inter-Ameri-
can disputes when they have led to armed attacks. The first has come up for re-exami-
nation and the second has resulted in action under the authority of the Rio Treaty.
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REVIEW OF THE WORLD SITUATION AS IT RELATES TO THE SECURITY
OF THE UNITED STATES
No detailed examination will be made of the over-all situation in this area. The
broad picture, as it has been drawn in recent months, is unchanged. The fact is that
the US and the USSR have pretty well exhausted the strategic courses of action earlier
initiated and have come to a temporary deadlock. Current developments in Germany,
as well as in Western and Eastern Europe, have the character of tactical adjustments.
The more clearly Germany has been defined as the key area in Europe, the more neces-
sary it has become for the US and Western Europe to take stock of their position and to
gather together the loose ends of their relations to each other, to Germany, and to
Soviet power; and the more necessary it has become for the USSR to take stock of and
to consolidate its position in Eastern Europe. The development of new courses of
action depends upon the nature of these estimates. Until they have been made, and
pending basic judgments concerning the future of ERP, an Atlantic Pact, the economic
strength of the USSR and the Satellites, and the real effect of Asiatic and Middle East-
ern problems on the power relations of West and East, it is probable that the European
situation will continue, for a short time at least, in its present form.
On 18 December the Netherlands government began military operations against
the Indonesian Republic. The objective of this well-prepared action was to reduce a
complex political and economic deadlock to an older and simpler pattern of colonial
control. The operation was officially designated as completed on 5 January. The
Netherlands government presumably considers that a political conflict has been
resolved by the timely and judicious use of force and is now prepared to turn to its next
problems: placating opinion in the US, working out of harmless compromises with
Indonesian nationalism, and the rapid reestablishment of the productive capacity of
the East Indies.
If Indonesia had its own private "iron curtain," these calculations might be
reasonably accurate and long-term US security interests might not be involved. But
Indonesia does not exist in a vacuum and basic US security interests are not simple and
limited. US security rests on the strategic consequences of related events in China,
India, Southeast Asia, and the offshore islands; and what happens in Indonesia both
affects and is influenced by these events.
US security also rests on the outcome of already well-established political and
social trends in Asia generally, and on the judgments and preferences of the Asiatic
masses. It also depends on the final character of the relation between Western Euro-
pean states and their colonial territories, in the capacity of the United Nations to
reduce and dispose of the tensions that arise in connection with these relations, and
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on the maintenance of the economic programs which are being developed in ECA in
collaboration with Western European states.
Each of these aspects of US security is affected to a greater or less degree by Dutch
action in Indonesia. The balance in which they have been precariously held has now
been knocked over by a blunt instrument. Regardless of the momentary stability that
"police action" may impose, it is considered likely that this action will ultimately release
more dangerous social and political forces than those it has brought under control.
Although it is too soon to estimate with certainty what new balance may be found, it is
possible to assess the immediate damage
a. to a satisfactory solution of the colonial problem,
b. to a satisfactory political stabilization of the Far East,
c. to the economic programs that the US has been developing in the interest of its
own security.
This damage will be examined in detail in what follows.
The Colonial Problem from the US point of view
The essence of this problem since 1945 has been how to satisfy the nationalist
aspirations of colonial peoples while at the same time maintaining the economic and
political stability of European colonial powers. An adequate solution of the first part
of the problem is essential to the protection of long-term US security interests in the
Far East. An adequate solution of the second part is essential to the support of imme-
diate US security interests in Europe. Both parts are applicable to the relative power
positions of the US and the USSR on the global scale. The problem, though it
remained unsolved, was at least kept from developing to the point where a critical US
decision would be required. It is considered possible that the Dutch "action" has
pushed the US close to this critical point. US security interests in Europe and the
Far East are in danger of appearing as mutually exclusive, when, in fact, the power
position of the US vis-a-vis the USSR requires that they be pursued concurrently.
The Political Stabilization of the Far East from the US point of view
The essence of this problem is to stabilize contending political forces in the various
countries of the Far East before the realities of political authority are gathered together
and exercised by Communist groups. Contention has been many-sided. It has
included competitions for power between local factions, ideological and class conflicts,
struggles of local nationalists against the local beneficiaries of Western colonial regimes,
general nationalist movements against the Western colonial powers. The implied
power struggle between the US and the USSR has colored each and all of these more
restricted conflicts. A persistent security problem for the US has been the fact that the
prolongation of these struggles has clearly permitted the Communists to join in and
manipulate them to their own advantage.
The forceful solution which the Netherlands government has attempted in Indo-
nesia will have unfavorable repercussions over a wide area. Events in Indonesia will
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set a pattern by which Asiatic peoples will reestimate the meaning of the various strug-
gles in which they find themselves involved, recalculate possible outcomes, and recon-
sider their positions. The Dutch "police action" provides ample material for a pro-
longed Communist propaganda campaign and the greater part of this material will
seem irrefutable when presented in the context of Asiatic nationalism versus Western
imperialism. The ambiguous position in which the US has been placed will, unless
rapidly clarified, provide an ideal chance to discredit past and to prejudice future US
influence on Asiatic opinion.
Thus the kind of negotiated political stabilization at which the US has aimed in
the Far East has been pushed off indefinitely. The alternative possibilities are not
very desirable from the US point of view. One such is that other European states may
attempt similar forceful stabilizations in their areas of special interest and thus put the
colonial-nationalist conflict irrevocably beyond the reach of negotiation and compro-
mise. Another alternative has appeared-the formation of a Pan-Asian bloc. The
Dutch "action" may have opened the way for such a creation by providing a rallying
point for diffused Asiatic political feelings. A Conference of Asiatic States has been
called for 20 January to consider ways of assisting the Indonesian Republic; and pro-
posals have been made for sanctions against and the breaking of diplomatic relations
with the Netherlands. It is not possible to assert that a Pan-Asian bloc will emerge
from the excitement of the present moment, but it should be noted that India has
been seeking opportunities to assert leadership in Asia and that, even in an amorphous
form, such a bloc could command an immense potential for taking concerted political
action in its own special interests. It is also certain that the primary target of such
action would be the colonial powers of Western Europe, with the US subject to probable
identification as an imperialistic fellow-traveler. It is not necessary to speculate on
whether or not such a bloc would align itself with the USSR, since, if it committed itself
to a clearing-out of Western influence from Asia, it would adequately serve the long-
term purposes of the USSR.
A third alternative, which has been given special impetus by Communist successes
in China, is that Asiatic peoples, examining Dutch "action" in terms of their own
nationalist aspirations, may jump to the conclusion that these aspirations can be most
quickly realized through a Communist social order and in conjunction with the USSR.
A delicate point has been reached in the mass psychological relations of Oriental and
Western societies, and it is possible that the policy of the Netherlands government may
have fundamentally altered the character of these relations.
US Economic Programs
This problem can be treated in a more limited and immediate context. It con-
sists of maintaining the availability of Indonesian commodities (tin, bauxite, rubber,
petroleum, and vegetable oils) (a) for US economy, (b) for the European Recovery
Program, and (c) as a source of dollar credits for the Netherlands government. The
precise economic consequences cannot be finally estimated. A "police induced" sta-
bility, assuming that it can be maintained, may increase delivered output in the short-
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term. "Police action," on the other hand, by calling into play organized guerrilla
counteraction, may have exactly the opposite effect in the longer-term; and, even more
significantly, this effect may be communicated to other production areas of Southeast
Asia.
From the US point of view, Southeast Asian commodities have a major place in US
peacetime economy, in strategic stock-piling programs, and in the implementation of
ERP. The present situation is that the production of tin and bauxite will probably not
show an immediate decrease since production is concentrated in areas that have always
been under Dutch control. Rubber production, however, may be considerably reduced
since the growing areas are open to easy sabotage. In addition, the collection and
shipment of these as well as all other Indonesian commodities will probably be ham-
pered by strikes, sabotage, guerrilla activity, and prolonged instability. And, if the
Indonesian conflict leads to an intensification of conflict in other Asiatic areas, US
stock-piling and other programs will be further impeded.
With respect to the Netherlands and Western Europe generally, the Netherlands
government has initiated an action in which it runs a dangerous race against time and
circumstances. Dutch economic planning after 1945 was based on the assumption
that Indonesia would eventually be reestablished as a major source of dollar credits.
Even then, the most optimistic Dutch estimate was that Indonesia would not have a
favorable balance of payments before 1950. The validity of these assumptions is now
in serious question. The cost of a prolonged upheaval in Indonesia-and there is little
evidence to indicate that it will be short-will have to be balanced against the rate at
which Indonesian resources can be converted into dollars through trade. While an
answer is being given to this question, Dutch finances will be strained and the difficul-
ties of evolving a viable domestic economy will be increased. At present 19% of the
Dutch budget goes into military expenditures and the major part of this is devoted to
armed forces in Indonesia. The burden of prolonged weakness and possible failure in
the purely economic field will not fall on the Netherlands alone. The Benelux Custom
Union is directly affected and the contribution of the Netherlands to ERP will have to
be restudied. Finally, the part to be played by the Netherlands in a Western defense
system will need re-examination.
The Long-Term Security of the US
The preceding analysis has touched on many of the security problems opened up
by the present situation in Indonesia. It only remains to point out that Dutch
"action" has cut the US position to the bone by touching on nearly all basic US secu-
rity interests simultaneously. Furthermore, this has occurred at a moment of dubious
balance, when possible gains in Western Europe have to be measured against possible
losses in the Far East.
The validity of this analysis rests to a considerable extent on the answer to the
question, "Can the Netherlands government stabilize its position in Indonesia in the
very near future and at a readily recoverable cost; or, will it fail to do so?" It is
believed that the Indonesian Republic is capable of maintaining guerrilla operations
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for several years. It is known that the Republic has substantial financial resources
beyond Dutch reach. It is not anticipated that the Netherlands government will be
able to undercut resistance by winning the support of a sufficient number of nationalist
leaders. It is expected that widespread sabotage and terrorist activities can and will
be organized by Republican leaders and that the Dutch will probably not achieve an
effective degree of over-all stability within the time they have at their disposal. It is
accordingly considered that military operations will drag on inconclusively and that
the domestic politics of the Netherlands will gradually be unfavorably affected.
The speed of the breakdown of the National Government is considered to have
been increased by Chiang Kai-shek's New Year peace message and its forthright rejec-
tion by the Communists. Chiang's proposals have had the effect of building up senti-
ment in favor of peace to unprecedented proportions in Nationalist China. In conse-
quence it is doubtful if the will to fight can be revived in the remnants of the Nationalist
army. At the same time, the flat Communist rejection of these proposals has strength-
ened Chiang's tactical position within his own government. Those Nationalist leaders
who have advocated negotiations have had the ground cut from under their feet and
are probably now incapable of forming an interim Nationalist regime to succeed that of
Chiang. Furthermore, the appearance of most of these leaders on the Communist list
of "war criminals" would seem to deny them any chance of playing significant roles in
creating a coalition government. No realistic means is presently available either in or
out of China for preventing the early establishment of a Communist-dominated govern-
ment for all China.
The most immediate security problem for the US arises in connection with Taiwan,
for here a serious threat to the US strategic position in the Western Pacific can rapidly
develop. It can be assumed that the Communists, once in control in China, will
endeavor to extend their control to Taiwan. Success in this respect would fix a Soviet-
oriented force securely in a central position in the offshore defense belt envisaged by
US strategy. At an early stage in the weakening of the National Government, a politi-
cal opportunity appeared to be presented to the US of separating Taiwan from the
Chinese mainland by supporting an incipient Taiwanese desire to set up an autonomous
government. Any realistic possibilities that might have existed in this respect have
now been nullified. The National Government has now provided for adequate military
control of Taiwan and has well advanced its preparations for using this island as a
safe haven for the last remains of Chiang Kai-shek's authority. Such a regime-in-exile,
though presenting itself as the legal government of China, could not indefinitely out-
last the pressure of Taiwanese discontent and Communist infiltration. It would be
cut off from the resources of the mainland and would find its claims to international
recognition viewed with growing doubt. It would, however, have something to bargain
with-the undeniable importance of Taiwan to US strategic requirements. The fact
that the National Government is asserting a legitimate authority over the island has
fundamentally altered the situation in Taiwan. It is now difficult to see what can be
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done to safeguard US strategic interests there that does not simultaneously raise the
question of commitments to a rump Nationalist regime.
4. THE NEAR EAST.
The Thin Pie Crust-Greece, Turkey, Iran
Greece still is and will continue to be the most troublesome sector of this strategic
frontier between the US and the USSR. Turkey, in spite of its new government and
a minor agitation about the movement of warships from Italy to the USSR, is firm.
Iran is veering toward open US-orientation.
In Iran, the new government of Saed has steadily improved its position. Saed's
US leanings have taken the form of the removal of dissident ministers, the extension of
the US military mission contract, the establishment of a new US consulate, official
publicity to counter USSR charges of US interference, and consultation with US Over-
seas Consultants Incorporated concerning a program of economic development. The
USSR has generally held off from direct pressure. Even if this represents no more
than a lull in the Soviet campaign against Iran, it has the practical advantage of pro-
viding a momentary breathing spell.
Although economic difficulties have finally brought about a change in cabinets,
Turkey is still wholly committed to maintaining a strategic position in the Near East
in line with US interests. In connection with this stand the US is being more openly
approached for correlative commitments. Most significant is the Turkish interest in
being specifically included in any security pact aimed at checking Soviet expansion.
The official desire is that the US, in order to sustain Turkish morale, should constantly
and officially repeat its intention of supporting Turkey's resistance to Soviet-Commu-
nist pressure. Even without such statements Turkish morale appears excellent. There
is no indication of unwillingness, official or popular, to accept the burden of being
indefinitely mobilized.
In contrast, Greece shows signs of becoming a "running sore," calling for constant
doctoring but unable to respond to treatment. The military stalemate continues to
benefit the guerrillas by furthering their intentions of undermining the moral fiber of
the country by preventing its economic and political reconstruction. Greek economy
has reached so advanced a state of inflation that an adverse military or political develop-
ment could easily touch off an explosion. Neither the government nor the opposition
can offer decisive solutions to the military and economic problems, and are caught in a
web of political maneuvers. A dictatorial solution remains a possibility. Greek
morale has reached the point where it offers no foundation for any plan that requires
attention and energetic development over a period of time. Yet the definition of
Greece as a major US strategic interest is as valid as ever. Its significance has, if any-
thing, been increased rather than diminished by the general pattern of instability and
uncertainty that has taken shape in the Near and Middle East. The factors which
originally led to the acceptance of a US commitment in Greece still clearly operate.
The return on the US investment, in the form of stability, has not been realized.
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Although Greece remains free from Soviet-Communist domination the cost of achieving
this result can be steadily made to mount by the application of comparatively little
effort on the part of the guerrillas.
The stabilization-or conversely the breakdown-of a system of states as loosely
knit, as politically immature, and as habitually disordered as those of the Near East, is
bound to be a lengthy process and difficult to measure with any certainty. It does,
however, begin to look as if the Arab world is coming uncomfortably close to a critical
point in its postwar history. Chronologically, the situation stems directly from the
Palestine conflict, which has stimulated political extremism of the Right and the Left,
and has as well speeded up the process of social and economic dislocation. The union
of superior force and clearly defined objectives in Israeli hands, the inability of the UN
to render and implement a decision, the political unrealism and military optimism of
the Arab League have continued to leave the basic initiative with Israel. The conse-
quence has been that a dynamic Zionism, indirectly aided by the inability of the US and
the UK to arrive at an agreed and consistently applicable course of action, has gained
an initial victory over a poorly organized Arab opposition. This conflict has left an
Israeli state in being, has driven wedges into the Arab League, and is now obliging the
political leaders of the individual Arab States to deal with greatly worsened internal
problems.
Israel has its own internal political balance to establish. An intense struggle for
political control, held more or less in abeyance by the problem of establishing a state,
has developed in anticipation of elections at the end of this month. It is probable that
the moderate socialist party MAPAI, which controls the present coalition, will continue
to dominate a new coalition; and that it will be supported by the religious and center
parties. Right and Left wing blocs, however, have emerged and may exercise a more
direct political influence. But, even when political competition has reached a point of
balance, economic viability will have to be achieved and foreign relations stabilized.
In both these respects, there is a marked but tacit tendency to assume favorable US
interest and prolonged financial support.
In the Arab States, with the exception of Saudi Arabia which rests comfortably on
oil royalties and a US-UK interest in air bases, there are signs of trouble. The Egyptian
Prime Minister was assassinated in an atmosphere of Moslem-nationalist fanaticism;
the Syrian government collapsed in consequence of demonstrations against its inade-
quacy in the Palestine war and its inability to solve economic problems; and the Iraqi
Cabinet resigned when student-organized strikes and demonstrations got out of hand.
No one of these events would in itself suggest anything unusual in the political life of a
Near Eastern country. It is their simultaneous occurrence in different areas and in
conjunction with confused political aspirations, economic difficulties, and heightened
social tensions that is significant. The real danger is that the political leaders in the
Arab States will increasingly find that their traditional methods of maintaining them-
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selves and exercising authority are being outdistanced by trends and events over
which they have no control.
The position of Marshal Tito has become so paradoxical that an examination of it
is useful in relation to the broad US-USSR power conflict in Europe and the Mediter-
ranean and in anticipation of the reopening of the question of an Austrian peace treaty.
Relations between Yugoslavia and the USSR have definitely taken a turn for the worse.
Mutual accusations for the record have become increasingly sharp. The economic
boycott imposed by the Soviet bloc is virtually complete. The serious effects of the
latter on the present and planned economy of Yugoslavia have been publicly
admitted.
The factors that affect Tito's decisions are fundamentally contradictory. They
can be summarized as follows:
a. A significant political deviation toward Western democracy would turn away
his devoted Communist supporters.
b. The only quick solution of his economic problem lies in development of more
comprehensive trade links with the West.
c. The development of trade links with the West requires a modification of his
vigorous anti-Western foreign policy.
d. Effective accommodation with the USSR can only be had on a basis of absolute
subservience because Soviet relations with her entire satellite bloc do not permit the
toleration of nationalist policies.
e. Recantation is impossible because it would deprive Tito of the strength he pres-
ently draws from Yugoslav nationalism.
The USSR and the Satellites have done everything possible to underline the contra-
dictions. Trade agreements have been ignored and such trade as has been permitted
will be drastically cut down in 1949. Oil exports from the Satellite States have been
stopped, and shipments of Polish coal and Czech heavy machinery have been curtailed.
In fact, Yugoslavia has been deliberately pushed toward economic disaster; presumably
with the intention of creating social chaos and political confusion.
Tito's responses have taken the form of persistent and increasing attempts to estab-
lish and expand commercial ties with the West and, contradictorily, to reassert his
ideological and political identity with the USSR in the broad East-West conflict. The
first type of response has been largely confined to trying to reestablish, in a controlled
form, former trade-links with Western Europe. To date, commercial treaties have been
negotiated with the UK, Belgium, the Netherlands, Switzerland, Western Germany, and
Austria. This effort has run into opposition from the US policy of export controls, as
that policy has been implemented in ECA agreements. Tito is now seeking to reduce
this opposition by proposing to commit a sizable part of the production of Yugoslav
metals in exchange for US industrial equipment, if the application of the US export
control policy is eased with respect to Yugoslavia. The second type of response, most
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clearly developed in the Foreign Minister's speech at the end of December, where the
USSR policy for dealing with the "imperialistic" West was defined as Yugoslav policy
also, patently undercuts any satisfactory trade negotiations with the US.
The most that can be said at this time is that Tito is coming steadily nearer to the
point at which he must make fundamental choices. In this sense, the situation is
becoming more fluid and hence more susceptible to US influence and manipulation.
It has not, however, reached the point where a firm US decision about a course of action
can yet be made. A careful loosening of export controls might now serve a useful
political end if it enabled Tito to keep his head above water month after month, but did
not commit the US to saving him. It is possible that need and circumstances will force
Tito tacitly to modify his adherence to a Soviet policy line in international relations.
There are signs of softening in connection with his current negotiations with Italy. A
more important test will come in connection with the Austrian treaty; and opportunities
to moderate his position are always available in connection with Trieste and the sup-
port of the Greek guerrillas. But, until inescapable economic necessity has forced Tito
definitely to show his hand, the proper basis for a US decision does not exist.
Two important developments have taken place in connection with broad problems
in the relations of the states of the inter-American system. First, three recent military
coups have raised doubts of the policy, stated in Resolution XXXV of the 1948 Confer-
ence at Bogota, governing the recognition of new governments. Second, the machinery
of the Organization of American States (OAS), established by the Rio Treaty of 1947,
has been quickly set in motion to resolve differences between two members of the
Organization.
Recognition of Revolutionary Governments
The general problem of the recognition of governments established by force has a
long history in inter-American relations. One of several possible solutions was approved
by the Bogota Conference in Resolution XXXV. This Resolution was generally under-
stood at the time to define a policy of "automatic recognition." It seems, however, to
have been considered by the Latin American states rather as a formal US commitment
not to use or to withhold recognition as an instrument of influence and control, than as
a limitation on their own policies. Latin American countries have generally indicated
that they, as a group, will not grant any inter-American organization broad authority
to sit in judgment upon the propriety, legitimacy, or democracy of new governments
that may emerge on the Latin American scene. A series of military coups has reopened
the general question of recognition. The matter has not come formally before the
Council of OAS, but it has been made the subject of extensive consultation between the
US and Latin American chancelleries.
Some governments deplore the prompt and general recognition-in accordance
with Resolution XXXV-which was given the Peruvian military government and wish
some special method to be devised for use against the successful military leaders of
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Venezuela in order to discourage imitators. The situation is further complicated by
the El Salvador coup, whose leaders seem definitely liberal-minded, and which would
probably have been promptly recognized but for the situation in Venezuela. In short,
the problem and the principle of recognition are up for re-examination. The Bogota
Resolution XXXV seems to have accomplished little beyond eliminating the possibility
of strong US leadership. Many Latin American countries still do not share the US
objection to reaching political decisions by violence, insist on distinguishing between
"good" and "bad" resolutions, and still prefer to be free to mobilize opposition, both to
old and new governments, on an ad hoc basis.
The Rio Treaty and the Costa Rica-Nicaragua Controversy
This controversy was precipitated when a force of mixed nationals based on Nica-
raguan territory invaded Costa Rica. The act of invasion was taken to represent an
illegal attack on an American state, and the Council of OAS resolved itself without
substantial disagreement into the Organ of Consultation under the authority of the
Rio Treaty. A fact-finding commission was appointed and sent to the area without
the usual formality of asking permission of the contending countries for the visit. It
is noteworthy that the Chairman of the Council, even though his country (Argentina)
had not ratified the Rio Treaty and would be consequently excluded from a final deci-
sion, aggressively guided deliberations toward positive action. It is too early to esti-
mate the results of this action, and, in any event, it must be recognized that its decisive-
ness may have been conditioned by the fact that only minor countries were involved.
Regardless, however, of the end result, the procedure used is of considerable significance
and provides a precedent as well as a formula for future use in more serious situations.
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SECRET
V. S. GOVERNMENT PRSNTING OFFICE
3349-STATE-1949
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