WEEKLY CONTRIBUTIONS LATIN AMERICA BRANCH, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200010003-6
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 3
• Publication Date: January 15, 1948
• Content Type: SUMMARY

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iyeek.y Contributions
iatinA-rica I arch OR , CIA
1 January a ,~
STUMMI
12RI T I N 1 IVISIOPi: E Salvador's Coat ist Party has not improved its
position as the reGult of recent change In government in that country (item
1), .~iicaragua'a coffee crop i'ailure may mn1u Dictator Somoza's position
?es- secure (item 2).
C :O 'RI L DIVISION: In Brazil$ a Co vnist-1nspired "Latin American Congress
in Defense of Petroleum" Is scheduled to met in Rio de Janeiro in Apri.l.
(item 3). In Ecuador, the prospect of trouble is increased by the tension
in the army at a time v*ien there is general dissatisfaction with the Plaza
administration (item 1), In Venezuela, the strike in the aracaibo oil fields,
which appears to have been called for the purpose of embarrassing the new
government, may have serious oonsequonces (item 5).
SOUTHER DIVISI0!1: Paraguay has narrow3,y averted ar3d conflict, but as
the opposing forces have not settled their differences the situation remains
tense (item 6). Peru's Odria government, despite grorting opposition, still
is able to maintain itself as it has adequate ar,y backing (item 7). Peru
and Argentina have agreed to consult before acting cn any South American
problems of international character (item 9). Argentina's new conctitution--
al provisions, if adopted, will result in more highly contralized controls
in that country (item 9).
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oekty Contributions i& January 1949
11
1, a:L SALVADOR: The Conn unistpoos_ition in !' aa].vador has not changed as a
result of tile Xj December c 'e in coon
Corrnunipts -:are quick to trv to move into L via ar follow the recent
coup, The new government, however, deported at least five dell-known party
x:rrbors almost as soon as they entered the country aril did not alter the
policy of the previous government with regard to Communism. _ Consequently,
the local Cm -mist, Party rLTv now be expected to expand beyond its present
at U ?ind ineffective scope, nor to attract much of a following even in
tho liberal Partido do Oriontacion Democratica and the tir rr labor unions.
The local c;or un s s, ac ver, p to attract a folloLdzig through a temp-
fit strategic tpror''rarn desi ned to appeal to local nationalism and de
iced to appear disarrring]1y conservative, lbeir program can for prornc-
tion of a vigorous domestic capitalistic industry in opposition to foreign
imperialism and even calls for opposition to measures of the extreme left.
Their theory apparont]y is to fatten the economy for the later kill.
2. UICAPAGUA s Coffee Crop failure
The Nicaraguan offee crop has failed and the total harvest my
be the lowest since 1890, according to US 2,mbaaay Managua.
Since coffee is an important source of dollar exchange for
Nicaragua, the country's economic outlook is now "very disturbing". 'U
economic distress that must inevitably result from the crop failure will,
it is estimated., have a disturbing effect on the country ' s political life
and may cause Dictator Somoza's position to becom more insecure than
heretofore.
3
BBRAZIL: A Latin American Conrmross in Defense of petroleum scheduled for
21 April L In- M ~ o aneiro by t o oard dirrotors of the
t;ational Center for the Study and Defense of Petroleum was reported recent-
ly in the Brazilian Coru1unist press. The inspiration for this projected
con es is dofinite3y Conimni.st, and its purpose is reported to be that
of ;providing "Opportunity for contact between the representstfves of the
peoples of the Continent to assure national acmership not only of the
black -old but of all the other riches of the sub-soil . . , such as iron
ore,, rangaooesc, thorium, uranium, etc.". It has been planned that this
congress will differ from the C.orcminist-inspired Tbrnioo Oil ,corkers Corr-
ress in that a broader propaganda front is to be employed. Govemraent,
labor,, and student organizations in all South and Central American countries
are to be invited to attend, and the propaganda appeal Will be made to
nationalism rather than specifically to labor.
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ieckly Contributions
B/Lt, CIA
iU January 1949
The con gross is unlilmly to take place in the form sugeted by
the U. mist press. 1 'eaiden*t 1h* ra f 9 aromme nt that the federal. gav-
ormwart would facilitate the establi,thnI nt of a national refining industry
was widely received as a eo creto demonstration of the government f s irr-
tention to keep control of filar tutw a oil. 3ndvatry in Brazilian bands.
Consequently, the ennounaorAnt foita3 the Communist effort to unite all
vocal alensents or the popula t3 oa against the govezw cnt on the Letroleum
issue. The coigrees, if held at aU, in like3y to be quiet and ineffective,
because the Communists now no lanp-lor havo the support of those noQa' o nmist
eldmants in It.z l WAch :ould be nooeeeary to insure the succors of such
an lnternattowl mating.
ECUADOR: Increased tension in the arm is indloatcd by the report of a CIA
source t d;zwral Lar-r-ea-Mba (a ocngenital revolutionary) and
Dr. i;duardo Ludena (a Communist) encouraged a group of non-coani ssioned of-
ficers to present an u tizaatuca to the General Staff der,~anding immediate
reforms. This precipitated a cabinet neotln,,- after which President "-alo
Plaza granted an immediate pay increase to enlisted personnel and promised
to consider the other demands rate by t ho troops. The units most involved
are the artillery groups, the Ts dc Corps and the "Venrcedores" Infantry 1,egi-
ment, the latter tyro of wlxtci are the best equipped and most politically
Influential in the Ecuadoran Arvy. Recent reports indicate a growing dis-
satisfaction with the Plaza administration amml; the Zhnk Corp personnel
and state that the corps can no longer be cons-derod pro' Plate. T'ho Ven-
cedores Regiment Is believed by some to be loyal tc General Larrea, parti-
cularly because of the praferenthil treatment given it (in equipment and
personnel) by the general when he was Chief of :staff? In view of the gen-
eral dissatisfaction with the Plaza administration, this arrtr move is a
more serious tln'eat to the stability of the government than it right other-
ti'dse have been and the prospects for serious trouble at any tires during the
next fare vreoks are greatly increased thereby.
. V1I EZUBIA : The oil workers ctrika in the !araoaibo area has not so far re-
s Mn vie mica; ho-viver r on 7,nd communications
facilities tre serious3y Interrupted. All sources agree that the strike
Eras called for the exclusive purpose of embarrassing the military Junta?
Mere is a real possibilitxr that the present situation may got out of hand.
*&ero are reports that the top members of the junta are becoming estranged;
the Joint 'Jeoka of 7 Jon 49 reports also that "Commanders at strategic gar-
risons at raracaibo and 1agmire are showing independence of Caracas super-
iors and may be key factors In breakup of ear r unity if internal frictions
cause showdorme".
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.en! it . ontributinns
C/3_, ClA
~acr,1
18 January 1949
PARP GIMPY: trmmd conflict averted
z c gamer nt has - weather d another threat to its
existence, but the strange chain or circ t o-m
es which favored President
Gon^,alez over his political rivals offers no mare than a respite in his
strugglo for sunre ey vim the T.& Ptodrk ;uez opposition
faction.
The .incident pr o p tating this Q risis ryas the publication on
7 January of a letter addressed to cornea ark -mitten by the President
of the Colorado Party fovexnir. - ter?, der ndi.rxn the removal of Venancio
:alas La; ez .frcr.r his position in _tho police department on the groomde that
.alas Leas us' piing poser and s throatoni.nr' C6-lorados who opposed him and
his brother, ?'eli. olas Lopes, ? leader of the anti-overnren.t fa on.
rho 1:o13stas, of cturse, refused to accede to such a demand. riith the sup-
port of the Democratic Colorado faction they in turn directed an attack.
against the i orifiiguistas supporting the President and demanded their ar-
rest on the grounds that they were blocking unification of the Colorado
Party. The President, probably playing for. time, was reported to have
agreed on 12 January to oust his 2.sorifiiruista colleagues. At that time
tension had mounted until an outbreak is expected m trantarily. The Asun-
cion police and the First Cavalry Division here expected to support the
_olistaa against the lath Infantry Regiment and the newly formed Preaiden-
tial chard, believed to be backing the Gonzal.istaa. At the crucial mo ent,
however, the arr y, though pressing for unification of the Colorado Party,
agreed to stay out of the "party affair"; the President of the Supreme
Court stepped in andoffered to mediate the differences; and an armed corn
fl.ict was averted.
The incident, however! is by no rnans closed. The two political
factions may be expected to continue their str gCl,e for poorer. Signifi-
cant, havever, is the inactivity of the police and the fact that the arr r,
despite its present lack of unity, has once again proved the directing
force in Paraguayan politics. Continued army aloofness to active partici-
pation in politics should help the "away unite and recover its former posi-
tion of dominance over the political scene.
7. PMUs :tetention of control over axEr vital for continuance of Odria
ernmeM,
sition to the Odria regime has been grovinr in recent teaks.
Me goverrure nt is currently f acing; opposition by the AP-IA party (which
claims that it remained practically intact in going underground), the Comr-
munists, and the Dustamantiatas. Luny agriculturists also v re alienated
by the recent government decree which provides for labor participation in
profits (see B11A V'Jkly for ]fit. Dec 48). Cotton gro ers further object to
UnD
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;','c~el T , a? r%
,,.rIbltions
;3/IA, G!A
1Ei Januar3 1,49
export tax features oi x :car ';,r est. h l::,s:t ~xchan cz and, f?x trade
controlef, and rcacentl;,r the !!,ovr^r+psient cettrdnr ' the "inrlcnerdent" 1e ?s a
'
torn (sea B/1A 1k1y for 11 .Ian l19). .1
Odria apparently believes that ! v 1. i amrful than the. 3althy
ro : ore ~tiver; Otto helped hire int* pc -r r ran c reutu32ly di nt s t th
t.hoir backing after biiildirv up his labor o?r.K. II^}rcrt2lau3z, there 115
no evidence that the f;csvazvxm~nt~s eoolal- p... . r7 has succeeded in v1l=1rig
nom than a raodiciun of labor 8,v lcfrt, "le 3 ck. of unity arson;; cabin :t of-
i'icials -- and even to scwr ext,,nt r!ith1 n. 1h& y:.-ti- -w- is repbrtedl