WEEKLY CONTRIBUTIONS LATIN AMERICA BRANCH, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200030009-8
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: November 19, 2001
• Sequence Number: 9
• Publication Date: August 30, 1949
• Content Type: SUMMARY

Approved For Release 2002.1179-01*A000200030009-8
Wee. v Contributions
Latin 7merica Branch am, CIA
30 August 19L9
13/LA considers the items on the ousting of General Prez (p. 2) and
on the Guatemalan situation (p. 2) are particularly worthy of note.
CURRENT DEVELOF.T.NTS
GENERAL: The ousting of Cuban Chief of Staff Prez will probably mean
greater freedom for Caribbean Legion activities (p. 2).
NORTHERN DIVISION: Expected Guatemalan disturbances, the outcome of
which is uncertain, may result in widespread violence imperiling the
lives of US citizens and tourists (p. 2).
CENTRAL DIVISION: (See Situation Memorandum on Colombia, p. 6, and
article on Ecuadoran political party situation, p. 4.)
SOUTHERN DIVISION: Argentine newspaper and radio attacks on Chile are
unlikely to result in a break in relations (p. 2). The Bolivian Governr
ment is faced with a serious revolt (p. 3).
SPECIAL SUBJECTS
Reorganization of !DN Improves Prospects for Stability of
Ecuadoran Government .............
11
The Current Situation in Colombia 6
DOCUMENT NO.------
?'CHANGE IN CLASS. 11
,ft
DECLASSIFIED
CLASS. CHANGED TO: TS S C
NEXT REVIEW DATE?
Atii It HR 70-2
DATE. 40..*TifIREVIEWER: 372044 A
State Dept. declassification & release instructions on file
Approved For Release 2002/01fititMDP79-01090A000200030009-8
Approved For Release 2002/02/06M-RDP79-01090V00200030009-8
Weekly Contributions, B/LA 30 August 1949
(;IA Working Paper)
1. CARIBBEAN: Caribbean Le ion members will,prolt_501.212aaith
reater freedom on Cuban territory as a result o1
the ousting o Cuban Chief ofStaff, General Prez, by President
Prio, In 1947 General Prez as largely responsible for quash-
ing the original Dominican invasion attempt. Unauthorized nego-
tiations with President Trujillo (probably concerned with fore-
stalling President Prfo's pro-Legion maneuvers) are said to have
been an immediate cause of Pgrez, dismissal. Although there are
reports from Ciudad Trujillo of an imminent Caribbean Legion
sponsored land, sea, and air attack on the Dominican republic --
perhaps between 5 and 10 September -- B/LA believes that there
still remains much planning and organizational work to be done
before still another attack can be launched by the Legion against
the Dominican Republic. The ousting of Prez will probably permit
the Legion, however, to move its headquarters from Guatemala to
Cuba and to operate an Cuban territory with greater facility than
heretofore.
2, GUATEMALA: US citizens could be im.s_Filed disturbances that
Viii-Er6i7g5WaRrIlLTETi coun ry.--VER-iitiMates
that revolutionary disturbances, more severe in character than
those of 1S-19 July, will occur in Guatemala within the next 14
months (prior to elections scheduled for late 1950). It is not
believed that President Argvalo can successfully continue his
present policy of placating the conservative opposition without
antagonizing leftist support. The conservative opposition is
growing and consolidating, especially within the army. Communist-
influenced leftist civilians have retained the arms issued to then
during the recent disturbances. The political outcome is not
cartains but the expected move by one side or the other to insure
control of the government may result in 'widespread violence of
such a nature as to imperil the lives of US residents and tourists,
especially those in the rural areas.
3. ARGENTINA: Senora Per6nis desire for vengeance on the Chilean
Telegati311-TET-UU the opposition to her campaign
for the chairmanship of the Inter-American Commission of 'j;amen
has led to strained relations between Chile and Argentina. The
Chilean Ambassador has protested to the Argentine Foreign anister
concerning Argentine radio and press attacks against the Chilean
2.
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
Approved FoNgoilease 2002/02/M4e-RDP79-010994000200030009-8
'eeekly Contributions, B/LA 30 August 190
(CIA Working Paper)
Government's handling of the recent Chilean strikes and against
President Goneglez Videla personally. The Chilean Ambassador is
said to feel that if the situation continues, he will "be con-
strained" to take some personal action. This, Embassy Buenos
Aires believes, may result in his finding some excuse to return
to Chile, Although an undercurrent of Chilean suspicion of Arg-
entina makes relations sometimes difficult between the two
countries, Chile seems to prefer not to make an issue of thin
particular affair. Therefore, saving some deliberate Argentine
Intention not now apparent, the strained relations should not
deteriorate to an open break,
4. BOLIVIA: The TM revolutiona Atte it, which began with simul-
taneous attacks in severe cities, has not yet been
suppressed, There have been sore defections among army units,
and indications of armed participation by pro-LNEminers groups.
The government has attempted to control the situation by extend-
ing the state of sieee? mobilizing all men between the ages of
19 and. 50, attacking rebel-held centers by air and landl.and has
requested additional fighter and bomber planes from the US to
facilitate the attack on remote centers of opposition. Although
surprising strength has been shown by the regime in meeting an
extremely serious threat, B/IA estimates that it will probably
be able to continue in power and gradually reestablish order
only if. it is not hampered by further defections by important
army units. (Substance used in CIA Daily Summary, 29 Aug 49)
3?
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
rnms,
Approved For Release 2002/02/06 Ed4y.,11DP79-01090ti00200030009-8
Weekly Contributions, 13/LA
(CIA Working Paper)
Article 17-49
30 August 1949
Reor? anization of 77CDN
Improvest or ilyadoran Government
Upon assuming office (31 August 1948)4 President Plaza ignored his
debt to the MON (lovimiento Clvioo Denocratico Nacional) -- a coalition
of moderate Libera m..era oc a is s? an ' ?ependents, which con-
tributed much to his election -- and adopted a policy of distributing
public offices among all parties in the hope of uniting the poonlo be-
hind his administration. His denial of ample patronage rewards resulted
in the rapid disintegration of the ncIDN as its disillusioned members
returned to their former parties. In time, Plaza lost all organized
support except that of the Conservative Party. Although this party 's
the beat organized of Ecuadoran parties and has a strong popular follow-
ing, political realities are such that exclusive Conservative support is
a handicap, Traditionally, the arpy has a very liberal, if not leftist,
orientations and too close identification with the Conservatives alien-
ates the army --- a daneerous development for ay Ecuadoran president
regardless of his popular appeal.
Organized opposition crystallized in June of this year when extrem-.
ists of the Liberal and Socialist parties gained control of their re-
spective organizations, announced a policy of opposition to the eovern-
ment? and decided to cooperate in its implementation. The attacker's
to be along two lines, one of which was to play up Plaza's Conservative
connections in order to win over the army for revolutionary purposes.,
The second line of attack, adopted in the belief that their combined
forces gave them a slight majority in Congress (US Embassy Quito now
doubts this is true), involved the plan to force the interpolation of
several Plaza ministers and demand their resignations when Congress con-
vened on 10 August, -Upon the anticipated refusal of Plaza to permit
his ministers to resign, a general strike was to be called which, it
was hoped, would result in Plaza's removal.
Some good for Plaza, however, has core out of this reorganization
of his opposition. The fact that the Iancheno-Te)Teno Espitaosa extremist
faction now controls the Liberal Party antagonizes moderate Liberals,
among whop are the heaviest contributors to party finances. The deci-
sion of the Socialist convention (24-27 June) to join the Liberals in
opposition very nearly caused a schism that apparently has only been
superficially healed, since the Guayaquil Socialists have little use
for the Liberals Lanchenos and his ideas. Public reaction to the inci-
pient revolt in Loja and Cuenca (4 July) and to the abortive :ancheno
40FeelBelmr--
Approved For Release 20 /r06 : CIA-RDP79-01090A000200030009-8
4.
Approved FoINgelease 2002/02MC:ItiA-RDP79-0109YA000200030009-8
Weekly Contributions, 3/IA - 2 - 30 August 1949
(CIA Working Paper)
Article 17-49
coup (26 July) clearly demonstrates that neither the people nor the
armu are in a revolutionary frane of mind. The failure of these two
ottempts has strengthened the administration in that, under the cir-
cumetances, it put the present leadership of both the Liberal and
Socialist parties in a bad light. Finally, the destruction and shock
of the recent series of earthquakes will, for a little longer at least,
nake normal politics appear extremely petty to the Feuadoran people and
therefore force the opposition to limit the extent and vigor of their
attacks.
Plaza, in addition to profiting from miscarriage of opposition
plans, has taken steps of his own. He apparently realized early in
July that the revival of the ::CDN would offer the most effective in-
etrumeat for capitalizing on the ncg-tive advantages he was gaining.
On 8 July, his inister of Government, Eduardo Salazar eonez, met with
foemer loaders of the =IN to inform them of the president's wishes, of
his willingness to finance the party with government funds, and of his
decision to remove office holders affiliated with opposition groups and
to replace them with ::1CDN personnel (a decision that he has already
beirun to carry out). As a result of this and subsequent meetings, MCDN
leaders have 'rown so optimistic that they are reportedly considering
the idea of running candidates in the November municipal elections in-
stead of waiting for the presidential election in 1952 before returning
te the electoral battle. The Conservative Party has indicated its
readiness to support the :TUT in its plans, thereby completely recon-
stituting the coalition which elected Plaza last year.
A reconstituted and vigorous :1CDT: would offer a rallying point for
moderate Liberals and Socialists who are displeased with the trends
developing in their parties. It would be conducive to the formation of
a bloc of "CDN and independent nembers of Congress to cope (and with
greater prospects of success) with anticipated attacks from Liberal
Socialist opposition in Congress. Finally, it mould remove, in appear-
ance and in fact, Plaza's present dependence up, n the Conservative
Party --- an eventuality which would greatly improve his position with
the army. The realization of all or of any one of these three possibili-
ties will contribute notably to the security and stability of the Plaza
adrinistration.
SECRE
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
5.
N.401
Approved For Release 2002/02/06,. CIA-RDP79-0494000200030009-8
SECRET
Weekly Contributions, WLA
(CIA Working Paper)
Situation Memorandum 4S-49
The Current Situation in Colombia
30 August 1949
(.S2eLmLaa.-- In anticipation of the presidential elec-
tion in 1950, the Liberal Party continues its policy
of opposition to the Conservatives in order to avoid
contributing to any political accomplishment which
could benefit the Conservative administration now in
power. The prospects for Communist program and achieve-
ment are at an all-time low. Colombia has improved
its foreign exchange position, coffee sales reuain
satisfactory, but petroleum income and prospects for
future develop-lent are poor. The armed forces are a
stabilizing influence in the country. Although Col-
ombia is normally aligned with the US on international
questions, recent months have shown a slight divergence
in economic policy.
-- Nothing in the current Colombian situation
is causing or immediately portends noticeable impairment
of US security interests. Of some concern, however,
are the circumstances that political stability is not
all that could be wished, even though the country has
a good record for surmounting difficulties, that long-
term prospects for petroleum are less bright, and that
Colombia's shortaee of foreign exchanee has caused
that country to depart somewhat from US-approved prin-
ciples of international trade. Communist strength is
diminishing,)
Political
The Liberals seem determined to carry out their announced policy
of non-cooperation with the government. The most potentially daneerous
manifestation of this determination is the current Liberal attempt to
change the electoral law. On 11 August, the Liberal majority passed a
bill in the House amending the Electoral Code so as to advance the date
of the presidential election from June 1950 to November 1949. Certain
Liberals have stated that they want the code amended in order that the
presidential election campaign will coincide with the present session
of Congress. They feel that, Congress being in session, their coneres-
sional majority would give them anadvantage over the Conservatives
during the campaign. In the thassy's opinion, however, their princi-
pal objective in seeking to advance the election date is to deny the
Approved For Release 2002/0 6 : CIA-RDP79-01090A000200030009-?0-
Now/
Approved For Release 2002/02108EnCIA-RDP79-0*0A000200030009-8
'eeekly Contributions, B/LA
(C/A Working Paper)
Situation I'lemorandum W-49
30 August 1949
Canadian Electoral Commission (recently employed by the government)
sufficient time to complete the new registration which was ordered by
an act of the 1948 Congress. That this bill may be expected to intensi-
fy party controversy in Colombia is evidenced by the statement of a
Conservative leader, Dr. Augustonamfrez 'breno, that the Conservative
Party would not recognize the outcome of the elections if the Liberal
plan were carried out.
The gvernment, though rather effectively paralyzed by opposition
between the Conservative Executive and the Liberal legislative branches,
is relatively stab7e? and there is every probability that it will re-
main so at least until the presidential elections. increasing political
bitterness, however, with minor outbreaks of violence such as preceded
tha June elections, is to be expected.
Economic
.olombia ha a improved its foreien exchanee position in the past
three months. Dollar expenditures during 1949 have been only 7.;f3d11
million greater than receipts as of 2 August. i'urthermore, Colonbials
commercial indebtedness has been reduced from 1,8.40 million on Ri June
to approximately TTS$21 million on 2 August IJO. Although Colombia's
foreign exchange position has thus improved, a continued disparity
between the official and the certificate or free exchange rate has re-
sulted in increased pressure for devaluation of the Colombian peso from
two of Colombia's most important econoeic pressure eroups --- the Cof-
fee Federation and the National Federation of rerchants. Devaluation
requires congressional action, however, and, since it was not included
among Liberal Party aims for this session of Coneress? the Lnerals
probably mill give priority to political ratters, with the result that
devaluation will be postponed, at least.
Colombia's foreign exchange receipts may well remain close to 1948
levels. Coffee exports accounted for 79 percent of Colombia's 1948
foreign exchange receipts; sales for the first half of 110 were approxi-
mately at 1948 levels in both volume and value. For the current year,
conditions are reported to be favorable, and, should coffee prices re-
main near present levels, Colombia's foreirn exchange receipts should
remain relatively satisfactory.
A current econcelc problem in Colombia, and one of interest to the
US as well, is the decline of petroleum. exploration and production. -
Five petroleum coepanies have withdrawn or announced their intention to
7.
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
dre
vow;
Approved For Release 2002/02taiipA-RDP79-010?84000200030009-8
Weekly Contributices, 13/LA
(CIA ':iorking Pape-e;
Situation ::emoranthen 4C,-49
3 SNIP
30 August 1949
withdraw from Colombia within the past year, 'i!erthermort) Tropical Oil
Company, largest producing comeany in Colombia, has drastically cur-
tailed exploration work and now is drilline only one -wildcat nell in
Colombia. Shell Oil Company has suspended all wildcat work while Socoey
is completing one wildcat and has no plans for further drilline this year.
Production of one-third of Colombian petroleum -- that produced on
the Del4res concession -- is threatened. with further curtailment. Offi-
cial government pronouncements are optimistic as regards the eventual
outcome of Law 165 of December 1914Z which authorized the formation of an
official company (51 percent Colombian) to take over the DeLares concee-
sion in 1951. However, the Embassy reports that foreign oil companies
are not interested in the proposed minority participation and that pri-
vate Colombian capital will not be forthcomine at the predicted inter-
est rates,
1 nven though there is no immediate prospect for improvemente the
petroleum situation As not at present detrimental to T:S interests be-
cause of the improved -world supply- conditicns, However, from a lone-
term point of view, if present hindrances to petroleum development re-
main, the situation wield be harmful to VS interests in the development
of near-by sources of petroleum as fully as pssible.
Subversive
----------
The Conmenietse the only cont ?r sunversive feree in Colombia,
are definitely losine strength. The only recent rioteworth,y developnent
was the merger (3 June 1949) of the two Communist factiens. 7ven if
accepted wholeheartedly by the memberehip of both factions (a proepect
4 no means assured), the mereer will not resit in any sienificant
increase in political power for the party, Leports indicate that this
merger was entered into more with the hope thet it would arrest the de-
clining vitality of the party than with any conviction that it would
materially advance the Communist proeram in Colombia.
The thorough teounrine reeeived by the Communists in the arm eone.
gressional elections clearly demonstrates their declinine influence.,
and has convinced the leaders of the necessity for a chanee in tactles,
The party's influence in the past accrued primarily from its eollabora-
tion with Liberals, particularly durine the days of rfaittin. niece
GaitAn's assassination, the Liberal harty has been treine cautiously
and even hesitatingly to free itself of thie association in the popular
mind, The effectiveness of the unfounded Conservative accusation of
vorettlit"
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
441., Nod
ma-paW4gl#M---
Weekly Contributions, p/LA
(CIA Working Paper)
Situation Vemorandum 48-49
4
30 August 190
Communist-Liberal collaboration in the recent campaign in reducing the
Liberal majority in the House has shown the Liberals the necessity for
avoiding in fact and in appearance any further collaboration. Since the
election, the Liberal Party has given clear evidence of its growing
anti-Communist attitude --- a serious blaw to Communist political pros-
pects, Seeing the handwriting, the Communists have agreed to abandon
their practice of supporting Liberal candidates and have decided to run
their ern in the presidential race of next year.
The armed forces remain loyal to the Colombian Government and con-
tinue to be a stabilising influence in the country. As a result of the
tension between Colombia and Peru and the internal political tension born
of the June elections the strength of the armed forces has been in-
creased to 300000 as of 1 June 194) as compared with a more normal June
strength of 25,000, The emphasis of the present training program has
been on basic recruit training and on the use of troops in civil dis-
orders. The bulk of the present equipment of the armed forces is of
little military value because of obsolescence and poor maintenance.
International
In the international field, Colombia's economic policy has been of
concern to the US in the past three months. Colombia entered GATT
negotiations at Annecy, but was willing to make concessions on only 2 of
192 items. Consequently, discussions have proven fruitleas, and the US
Department of State has cabled the US delegation its opinion that the
existing trade agreement as well as negotiations for a new agreement
should be terminated rather than postponed at the close of the present
meeting of GATT. A second cause of concern to the US is the Colombian
policy of refusing to grant dollar exchange specifically for the shipping
of goods. Such a Colombian policy virtually forces importers to ship
by Gran Colombian Merchant Fleet which accepts payment in Colombian
pesos. This is, in effect, discrimination against US shipping. A fur-
ther cause of concern is Colombia's most recent barter agreemonL? one
with Finland -- which contravenes US economic policy by its arrangement
for purchases of paper at higher than world. prices.
The Daya de in Torre case is still the most important controversy-
in Colombia's relations with other Latin American. countries. Settlement
is reportedly being delayed at present by the fact that Peru behind
in its quota payments to the International. Court,
Approved For Release 2002/02/06 : CIA-RDP79-01090A000200030009-8
9.