WEEKLY CONTRIBUTIONS LATIN AMERICA BRANCH, ORE, CIA 1 MARCH 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200010008-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 8
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 8
• Publication Date: March 1, 1949
• Content Type: SUMMARY

Approved For Reuse 1999/091&DP79-0lf9OA000200010008-1
i de2i Contributions
Latin Ams ca 'Branch CIA
1 March 191+9
Two developments are found to be of particular interest this meek:
the friction between Peru and Colombia over the safe conduct of Hays do
la Torre (p. 2); and the evident policy of labor-control of Venezuela's
junta (p. 2).
SUDUA Y
UE UERAL: The increasing tension between Peru and Colombia is tnlill ely
to lead to military conflict (p. 2).
CE14TRAL D17ISION: Venezuela's governing military junta is moving toward
a policy of more rigid labor control (p. 2).
SOUTHERN DIV]'SION: Chile's administration will remain insecure despite
its probable victory in the 6 E:rch congressional elections (p. 3).
In Paraguay a "seccndarytt bloodless revolution has made Moles Lopez provi-
sional president (p. 4).
SPECIAL SUBJECTS
Effect of the Nicaragua-Costa Rica Pact of Friendship . . . . . 5
The Current Situation in Uruguay . . . . . . . . . . . . . . . . . 7
DOCUMENT NO.
NO CHANGE IN CLASS. 0 7---'d
'--j DECILASSWIED
CLASS. CHANGED TO: TS 8
NEXT REVIEW DATE:
AUTH: 7
DATE. EVIEWER: 372_Q{ 4
~~~J~WP~~tttt-ls~^ AL e
Approved For Release I 999/0 ' -R PP79-01090A000200010008-1
 IAO
Approved For ReVase 1999/O9/g
dAtli 9-01`0" OA000200010008-1
50
ZJeokiy Contributicns
B/LA, CIA
1 ."arch 199
1. G MRAL: Increased Colombia-Porn Tension Unlikely- to 'lead to -..li-
t ry Conflict? For wee a Colombian Government has been seeking a
"safe conduct" for Iiaya do la Torre., the APRA leader, at present in
asylun in the Colombian s nbassy in Lima. US T rbassy Bogota reports
that Peru's refusal to grant the safe conduct has caused the Colonr
bian Foreign Lt.nister to consider seriously the withdrawal of the
Colombian 'ambassador from Lima and the presentation of the matter to
the Org; nization of Arnerr1can States. Ambassador Beaulac further re-
ports that the Colorbian Foreign 1.Iinis ter attributes the recalcitrance
of the Peruvian Government to its desire to seek a "foreign adventure
for internal political reasons" because of Peru's "desperate fiscal
and econo *"e 4ationti.
n ' cuadoran official has
stated that Peru is planning an attack on Colombian territory in the
Leticia region, That the Colombian Government considers this a pos-
sibility is evidenced by the Colombian Foreign Minister's confirma-
tion of an informal military agreement with Ecuador against possible
Peruvian aggression - an arrangement apparently suggested by Presi-
dent Galo Plaza during his recent visit to Bogota. US i hassy I3ogota
also reports that the Colombian Government is quie(iorcin its
Z&KAYA6 along the Peruvian border. information
indicates, however, an absence of any significant mill-
~zy preparations in Peru.
Although a Peruvian attack cannot be discounted entirely,
i3/LA feels that it is still a remote possibility. The more likely
development is that, because of pressure from the fire-eaters in his
ama party, Odria will continue to find it politically inexpedient to
grant Iiaya de la Torre a safe conduct, and consequently the dispute
with Colombia will be protracted.
2, V7';I.TEMMI A. s anti-Labor "easures Increase
'1n6-fa"_
ry -a js moving; towards a policy of more
rigid labor control, as is evidenced both by impending; changes in
its membership, Which m,-,ay include more anti-labor military leaders,
and by its action in dissolving the Confederation de Traba jadores
Vonozolanos. Cha21 ieiembars hi of the Junta ma;: occur between 9
and 2" T arch. Delgado Chalbaud will
boa eased out, and. Perez Jimenez will assume leadership, with Llovera
F'aez and Felix '','orano completing the junta membership. Perez Ji e~-
nez may be expected to adopt stronger anti-labor measures.
The recent dissolution of the Confederacion de T'raba ja-
dores Venezolanos may be the first step tote r- s comalcte suppression
of labor unions, Increasing labor disturbances, together with pres-
sure on the junta from anti-la >or military leaders, provide a
Approved For Release 19 -RDP 8-1
 Approved For Reuse 1999/09/piC RffiRDP79-01*40A000200010008-1
Weekly Contributions 1 ,':arch 1949
B/La, CIA
background for this action. The CTtt, a confederation of all the
former Acciom-Demooratica-controlled syndicates, including Fedepetrol,
claims a me ersh p o 3 0,000 workers. Its dissolution will de-
prive the non-Comm nnist unions of coordinated leadership.
Further anti-labor measures, accompanied by a possible
increase in unomploymcnt resulting from cutbacks in oil production,
may create a situation favorable to Communist propaganda. The dis-
solution of the Acci6n Democratiea confederation, along with the
imprisonment of abor leaders, creates a "leadership vacuurmtt
into which the heretofore ineffective Communist Party may wove.
3. CHILE: 'Administration to Remain Insecure De ite Probable Election
Victory
The 6 arch congressional elections brill provide the first
national electoral test of President Gonzalez Videla'0 vigorous
an ti-Communist campaign initiated when he broke definitely -with the
Communists during the coal strike of 1947. An election victory is
expected to crown the anti-Communist stand with apparent vindica-
tion, but not greatly to strengthen the Presidont's precarious-poli-
tical position.
The pro-government bloc of Conservatives Fadical, Liberal,
Democratic, and right-Bring Socialist parties united for the elec-
tions in a government-sponsored electoral pact seems to promise a
little more than 50 per cent of the registered voters, against about
30 per cent for the,opposition. While the government's apparent
strength might be undermined by. defections from the pact resulting
from internal party frictions --- such as the controversy between the
Traditionalist and Social Christian factions of the Conservative
Party -- such defections are not likely to be sufficiently serious
to prevent the return of a pro-government majority.
Anti-administration forces -- composed of the FPJIS coalition
of various minor parties plus the Communist dominated National Demo-
cratic Front that includes the Authentic Socialist Party and about
60, 000 "ex?-Coranunis ts" who were not disenfranchised under the Defense
of Democracy Law --- are not likely to increase before election day.
Opposition strength could, in facts be greatly reduced, should the
administration decide at the last moment to invoke the Defense of
Democracy law to outlaw the entire National Democratic Front.
Even though the electoral pact results in the return of a
pro-government majority, it is unlikely to prevent dissension among
the participants following the election. President Gonzalez Videla,
in spite of Chile's considerable economic and financial improvement
under his government during the past year, has not yet succeeded in
Approved For Release 19991x' -1 RDPl9 6 08-1
 Approved For Reuse 1999/09/Ri
'x
1.7eekdy Contributions
13/LA, CIA
I90A000200010008-1
1 ?.'arch 1949
promoting an effective organization of the non-Con, rzunist left
(which, in Chile, would probably be a majority) or in building a
stable trorking coalition of parties. Therefore, dissension will
probably continue to impede his legislative program and encourage
Communist efforts to exploit the fissiparous tendencies of the
Chilean body politic.
4., PARAGUAY: O n 2 6 February Ur. Felipe -Folas o ez became provisional
presi eni o _ara lua~r f o owing ttie ove irowr` o c enera
FLOlon by Colorado Party leaders and junior arrwr o ficers, The coup
ie believed to have been a move to prevent ranking officers from
securing the presidency for folon. This move ao taken despite
_tolon's recent statement that he would not be a presidential candi-
date in the forthcoming; elections. Among the significant changes
in government are the overthrow of such important military leaders
as cavalry commander Canata and Commander in Chief Villasboa; the
reappearance on the political scene of Colonel Ctroessner (former
infantry commander) and General Dias do Vivar (who reportedly re-
turned from exile in Argentina to assume command of the cavalry).
Thus far, no bid for recognition or no statement of policy have
been issued by the new government. It is believed, however, that
the Moles regime will follow the pro-US orientation of its predeces-
sors,
Lea.
Approved For Release 1999#O 1X-RDP79-01090A000200010008-1
 Approved For Rel'ase 1999/09/9kOA000200010008-1
Weekly Contributions
f3/LA, CIA
Article 9-19
I T;arch 1949
Effect of the Nicaragua-Costa Rica Pact of Friendship
On 21 February the representatives of Nicaragua and Costa Rica signed
a "Pant of Friendship", by the terms of which the signatories agree to
consider their recent differences settled and to submit any future pro-
blems challenging the principles of non-intervention and solidarity to
mutual consultation and conciliation. After the pact vas signed, the
Council of the Organization of American States (COAS) declared terminated
its functions as the Organ of Consultation under the terms of the Rio
`Treaty, and also disbanded its military investigation committee.
The signing of the pact by Costa Rica is a result of Ulatista opposi-
tion pressure put on the Figuores government to cooperate with the COAS
and to withdraw from Central American entanglements. The real responsi-
bility for the security of Costa Rica against invasion, however, still
rests with provisional president Figueres. The absence of an adequate
guarantee of security from the CQAS and the withdrawal of the military
observers leave the Figucres government in the same insecure position
vis-a-vis Calderon Guardia and Somoza as existed before the COAS first
ac ?e December. Figueres can be expected, therefore, to continue his
policy of compromise between dependence on'the Caribbean Legion for pro-
tection and compliance with the terns of the COAS resolution which, in
effect, enjoined the removal of the Legion from Costa Rdca.
To Nicaragua, the pact is invaluable propaganda, as it gives dignity
and publicity to Somoza'a willingness to negotiate. Furthermore, it is
unlikely that even a scrupulous observance of its terms would involve any
immediate change in Somoza's plans. Por it is estimated General Somoza
does not --- and in fact, probably never did -- intend to involve his
military establishment in an extensive external campaign. His support of
the Calderon forces at the time they invaded Costa Rica seems to have been
to insure the initiation of a revolt that vJould forestall and delay pos-
sible Caribbean Legion action against himself. Intervention by the COAS,
even though it brought out Somoza's complicity in the revolt, also had
the effect of disrupting and delaying the plans of the Legion. ? In the
absence of an immediate threat to his regime, therefore, $onoza can now
afford to Iceep his powder dry until a new crisis approaches.
It is apparent that the COAS intervention based on the Rio Treaty vr:s
effective in limiting the development of the iicaragua-Costa Rica affair
and bringing about renewed manifesta.,ions of friendship. The pact itself,
hovmver, though a product of international Intervention, provides that
the basic difficulties be solved on a bilateral basis through consulta-
tion between representatives of the tuo governments. The pact will
Approved For Release 1999/ ri- RDP79-01090A0002000100089J
 Approved For Relse 1999/09/RA000200010008-1
--ock>Zy Contributions
B/I,A, CU
Article 9-49
1 I"arch 1949
probably be criticized as indicating the avoidance of responsibility by
the international body, on the grounds that the proposed bilateral con-
suLltation may be ineffcctire, and that no really effective guarantee has
been given against a recurrence of the situation that first precipitated
COAS action. Such criticism will. supplement that already expressed con-
cerning; the inability of the COILS to implement its resolutions through`,
effective sanctions.
U/L,A estimates that COAS action in this affair ?- substantiating, in
effect, the allegations of both sides but placing responsibility for all
curative measures, ineludinM i np7 cmontation of the recently signed pact,
,Y, the countries themselves -- has done little to alleviate Central A.,?'t-
erican tension, and therefore that there has been no rain for US security
interests in the political stability of Central America.
6.
05, MODE" 70AL
Approved For Release 19 : 'CI'A-RDP79-0109OA000200010008-1
 Approved For Re`Iase 1999/094,P,/s_='OA000200010008-1
,colcly Contributions
13/LA., CIA
Situation ; iemorandurn 10-49
The Current Situation in Uruguay
3 I,lirch 19.19
The present tllc ryes government is stable and is not expected to
alter its traditional pro-US orientation, Political and economic diffi
culties still exist, but are not serious enough to threaten the govex ent's
continuance in power before. the 1950 elections.
In domestic politics, a shortage of beef in the :ontevideo market has
been used by the persistent I-Ierrerista opposition to challenge administra-
tion policy and ac a possible major issue in the 1950 elections. The es-
tancicros, many of whom are Ilerreristas, have a. fused to sell their cattle
in the controlled and low-price i.:ontevideo market, The ',atUistas, with a
traditional policy of cheaper meat for the urban population, have stub,t)ornv?
ly maintained the system of controls. A recent alleviation of the shortage,
however, has been of politir,al advantage to the Tatllistas.
be Comriiunists, under close surveillance since October 19,481, are under-
going a financial crisis and at present do not constitute a serious politi-
cal or subversive threat to the stability of the governricnt.
In international affairs, major interest centers on 'Uruguay's continual
"cold warfl with Argentina which continues with somewhat lessened intensity.
Possibly in part as a product of its antagonism to Argentina, Uruguay con-
tinues to withhold recognition from the "military" governments of Peru,
Venezuela, El :::alvador and Paraguay and has attempted to take agrgreesive ac-
tion against `3ogota i_esoluticn ?~~:KV by organizing an "American Committee of
Defense of l e :.ocracy'T, c signed to consolidate the liberal elements of the
American republics in opposition to "military governments" and "dictator-
ships". US recognition of three of the four nations which Uruguay does not
recognize has been criticized rather severely by Uruguayan officials but it
is not estimated that this will affect OS-Uruguayan relations significantly,
Me U3.m uayan oconomj has been affected by the Argentine economic crisis.
The decline in dollar value of the argentine peso has boon reflacted in the
similar, though less serious, decline of the -, ruzauayan pc.sa's value in terms
of dollars. As important to Uruguay as the lessened purchasing power of its
money is the fact that argentine exchange controls and the unfavorable Arg-
entine/Uruguayan exchange rate has reduced ;'rgentine tourist trade in Uru-
guayan resorts -- an important source of national revenue. The saw, shift
in exchange ratios has stimulated Cru< uayan travel and spending; in Argentina.
Uruguay's favorable balance of trade during the .-eriod has been
reduced by half. The wool market is slow and e.-ports of the current season
are 22 per cent less than last year. Although there is available for
C
j
Approved For Release 1999M9``~C'I'i~-RDP79-01090A000200010008-1
01, WNW, I
 Approved For Release 1999/09/9eW 9) J.9s6 OA000200010008-1
E'cekly Contributions 1 Larch 19L1.9
!.3/IA, CIA
Situation :1emorandum 10.9
export in the coming year 200,000 metric tons of wheat, prices are lower than
last year and significant sales have not been made as yet, though it is ex-
pected that ECA purchases may help to make possible the disposal of the en-
tire amount,
Inasmuch as neither economic nor political problems are great enough to
cause any serious fear of unconstitutional or subversive moves against the
government, political interest focuses on the coming 1950 elections where
the principal contest will be between the Ilerreristas and the Colorado candi-
dates. The present period is one of pre-election maneuvering and no clear
picture has as yet developed.
YI(i [df I
Approved For Release 1999/ -RDP79-01090A000200010008-1
8.