WEEKLY CONTRIBUTIONS LATIN AMERICAN DIVISION, ORE, CIA 1 NOVEMBER 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200040005-1
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 12
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 5
• Publication Date: November 1, 1949
• Content Type: SUMMARY

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Weekly Contributions
Latin AmericanDivision,ORE? CIA
1 November 1949
Two items have been selected this meek by D/LA as being of
particular interests that an Colombia (p. 3), and that on European
control of Latin American Cammmist activities (p. 2).
CURRENT DEVELOPMENTS
GENERAL: Communist activities in Latin America appear to be con-
trolled from Europe rather than from any point in the Hemisphere (p. 2).
NORTHERN AREA: In El Salvador, the resignation of tmo junta members
does not affect the stability of that country (p. 3).
CENTRAL AREA: In Colombia, there is a real possibility that increas-
ing violence will impel the government to declare a state of siege (p.
In Ecuador, the postponement of the election of the vice-president is
expected to be of benefit to the Plaza administration (p. 4).
SOUTHERN AREA: In Paraguay, events of the past meek have advanced the
date of a possible political showdown (p. 5).
SPECIAL SUBJECTS
The Current Situation in Surinam . ? . 6
The Current Situation in Cuba
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1 November 1949
1, GENERAL: European Control of Latin American Communist Activities
e problem of the extent, nature, ancrleans of inter-
national (i.e., Soviet) control of Latin American Communist
activities continues to raise many questions to which exact an-
swers are lacking. Certain recent events, however, seem to justify
the tentative conclusion that, whatever may be the degree of con-
trol or the number of channels, this control is exercised, not
through any Latin American regional headquarters for Communist,
Communist-front, and allied organizations, but directly from
Europe.
Al]. reports of a Latin American Cominform or similar
organization have either been in conflict with known facts, or
from unreliable sources and impossible of verification. Evidence
is lacking of any recent attempts by Russian diplomatic repre-
sentatives in Latin America to create any regional headquarters
or even regional groupings of the local Communist parties or of
the various local front-groups. Spontaneous regionalism also
appears to be almost entirely lacking among Latin American Commu-
nist parties. Local parties appear to have close liaison with
only two or tiree of those Communist parties geographically close
to them, and none appears to have close liaison with all other
Communist parties in Latin America. The Cuban Communist Party
has more extensive contacts with foreign Communists than any
other Latin American Communist party. However, even in this
case, there has been a substantial community of effort with only
the Mexican Communist Party. Couriers and Latin American Commu-
nists from other countries pass through Havana and Montevideo,
but this is probably for travel convenience rather than because
of any organizational grouping of the Communist parties that
mould give special authority to these two cities.
There is some evidence that Communists block the devel-
opment of regional control mechanisms in Latin America. For
example, it was reported that in a secret session at the recent
"Peace" Congress in Mexico City, the Communists -- as distinguished
from fellow travelers -- vetoed Lombardots Hemisphere "peace organ-
ization n plan, and, in effect, substituted instead direct subordina-
tion of local national groups to Paris headquarters.
The Communist front groups -- WFDY, WIDF and WF1U -- all
have international headquarters in Paris, and the local Latin
American organizations of these groups appear to be subordinate
to those headquarters, with a partial exception in the cases of
some trade unions rhich are affiliated with the WF1U through the
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CTALs a regional organization, Most of the more important unions
belonging to the CUL, however, also have direct contacts with
the Paris headquarters of the WFTIT.
The apparent lack of a Soviet regional control mechanism
in Latin America; the lack of close cooperation between local Com-
munist parties beyond their immediate neighbors; the resistance of
some Communists to the possible development of a regional front
group headquarters in Latin America; and the concentration of
general headquarters of world front groups in Europe, support, at
least tentatively, the conclusion that the Soviets do not preseey
desire the development of regional Communist organizations in Lan
America and exercise such control as they use directly from European
headquarters.
2,' EL SALVADOR: No cban in the stability of the Salvadoran govern-
men ? or s .4ke-o 7.the-road policy, is foreseen
for the immediate future as a result of the resignation of the
juntas most influential members -- Major Oscar Osorio and Dr,
Iteynaldc Galindo Pohl, Major Osorio, who rceigned to become an
active presidential candidate, remains the dominant figure in
Salvadoran political life. In recent visits to various military
garrisons, he has assured himself of the support of the army, and
apparently feels the strength and loyalty of his supporters suffi-
cient to assure his continued dominance in national affairs and his
eventual election as constitutional president, It is to be expected
that Osorio will continue to seek support from both liberals and
conservatives, and will play both ends against the middle in his
political campaigning, Wainer) Pohl 'a resignation and his support
of Osoriofs candidacy suggest a political deal, because his reputed
liberal tendencies contrast eith Osoriofs somewhat conservative
beliefs, Major ?seri?, the dominant political figure, and Galindo
Pohl as eells can be expected to support the juntas which is now
redeced to two mens Yajor Oscar Bolanos and Dr. Humberto Costa,
The junta, in turns can be expected to continue the moderate,
middle-of-the-road policy that has existed since its foundation
in December 1910, DS security interests are not immediately
affected.
COLOUBIa: State of Siege NAY be Declared
es =a EctreTTair-rerE real possibility of a
state of siege in view of the increasing violence in ColoMbia.
The current threat to stability stems from Liberal Party fears
that the Conservatives may have assured the victory of bitterly-
hated Laureano Gomez in the presidential election scheduled for
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27 November by a) the appointment of a pro-Conservative officer
to command the expanded arny, b) the removal of Liberals from
police administration, and o) the replaceuent of Liberal Gov-
ernors by strong Conservatives. On 26 October the Liberal
Party publicized a proposal (substantially similar to a pro-
posal made bre conservative President Ospina on 24 October) for
a form of coalition government to govern for four years in
order to reestablish public order. Ultimate decision as to
whether or not this proposal will be put into effect lies with
the Conservative candidate, Laureano Gomez. It is believed
that the resignation of the Liberal members of the Supreme
Electoral Court and their announcement that they would not
accept the results of an election held under present electoral
procedures, along with the National Liberal Directorate's orders
that Liberals resign from all electoral bodies, is designed to
put pressure upon the Conservative Party in general and upon
Gomez in particular, to accept the Liberal "peace proposal."
In view of Gomez 'a growing conviction that he can
win the election in November, fl/LA estimates that only under
irresistible public pressure will he accept this proposal to
postpone for four years his chances of gaining the presidency.
In the event that Gomez does reject the Liberal proposal en-
tirely, the government, in order to control probable violence,
is expected to declare a state of siege.
44 ECUADOR: Election of Vice-President Post ned
Since Vi =e (16 Oct) while con-
gress was in session, it was believed that the government would
insist that its congressional majority proceed to the immediate
election of a new vice-president in order to prevent the anti-
Plaza president of the house (Augusto Alvarado Olea) from become
ing the interim vice-president as provided in Article 105 of the
conetitution (see D/LA Wkly 18 Oct 49). The government, however,
did not avail itself of this opportunity. In a joint session
(21 (Jct) congress recognized Alvarado as interim vice-president
by the adoption of a resolution that "Article 105 of the Consti-
tution should be interpreted to require the calling of an
extraordinary session of Congress upon the termination of the
current ordinary session for the purpose of electing a new eice-
president."
US Embassy, Quito, reports that the government bloc in
congress joined the opposition in support of the resolution be'
cause the former group desires to avoid any criticisms of having
proceeded unconstitutionally in this business. The Embaaey
further reports that an extraordinary session will probably he
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called for 10 or 11 November. D/LA estimates that the short
delay occasioned by the resolution is more likely to be a bene-
fit rather than a disadvantage to the Plaza administration, and
that (as previously estimated in D/LA Wkly lg Oct /460 the selec-
tion of a successor is not likely to pose any serious problem
for the government.
5. PARAGUAY: A t of-mar between olitical and milita elements
appears ? eve oping in Asuncion. Governmen
leaders who came into office with the aid of General Diaz de
Vivar, 'Chief of Staff, are now fearful that the General is
obtaining such a strong grip on the military that he may soon
be in a position to overthrow the all-civilian regime and are
considering mays and means of removing him without precipitating
a crisis. military leaders, many of whom are dissatisfied with
the army's subservient role in the government and who are no
doubt aware of the existence of the conspiracy against Diaz de
Viva? (see D/LA Ikly 25 Oct /49), might not be averse to partic-
ipating in a military coup. These developments in the past week
have advanced the date for a showdown. While the effect may be
damaging to Paraguayan stability, there is no indication that
US security interests will be significantly affected.
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Situation Memorandum 61-49
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1 Novether 1949
The Current Situation in Surinam
(Summary Surinam's most important political problem -- its
future status with regard to the mother country -- has not
been settled. Economic conditions remain favorable. The
snail garrison force continues to be of no military impor-
tance.. There has been no movement of a leftist ar other sub-
versive characters. International relations as such are not
carried on by Surinam because of its status as a dependency.
-- None of the current developments in Surinam
adversely affect US security interests.)
Political
The most important current problem in Surinam is that of its
future relation to the mother country. The solution of this problem
is contingent upon the settlement of the question of the relationship
of the Indonesian possessions to the Netherlands goverment, a settle-
ment yet to be rade. Because of this, however, Surinam is plagued by
the uncertainties inherent in any period of political transition; the
old order is no longer adequate for present-day political realities
while the new has not been determined. In the meantime, an interim
agreement, so sorely needed, appears to be equally difficult to achieve.
It is true that on July 22, the Second Chamber of the Netherlands
States General unanimously approved an interim agreement which, among
other things, gave legal recognition to Surinam's wish to be represented
in the Dutch Parliament when matters relating to Surinam were under dis-
cussion. Unfortunately, however, this agreement also contained provisions
whereby the Surinam goverment would be required to support private (in-
cluding church schools) as well as public schools out of public funds.
The reaction to these provisions in Surinam was intense. On 25 July the
Surinam Staa ten petitioned the Dutch Parliament to withdraw the agree-
ment because the education provisions were "in flagrant conflict with
the autonomy of Surinam," and an encroachment upon its budget rights as
they prescribed compulsory expenditures." Copies of the petition were
also sent to the Inter-Indonesian Conference, the UN and the OAS. In
September, the Netherlands government withdrew the agreement bill,
leaving the whole question of imperial relationship where it was.
CONTIDENTIAL
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Situation Memorandum 61-49
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1 NoveMber 1949 ?
Nothing of exclusively domestic political importance has developed
during the past three or four months, The lky election for the elective
members of the Staten resulted in a distribution of representatives
favoring the three big local parties; the National Party of Surinam
(NES), the Progressive Surinamese Party (PS?, a Catholic Party), and
the Christian Socialist Party (C$P). Racially, the make-up is seven
nixed-bloods, seven at Indians., four Negrosea to whites, and one
Javanese. None of the members elected is known to be anti-US.
Econosic
The economic., condition of Surinam continues to be good. Local
bueineas is normal. Of the three most important exports (bauxite, rice
and gold) peoduction of only the last has declined There are no sig-
nificant changes in the export-import pattern and the colony's financial
situation is sound.
With regard to the monetary situation, officials of the government
have announced that, under present circumstances, there is no reason to
develue the Surinam guilder, It is estimated that the Foreign Currency
Fund will loee 100,000 guilders as a result of sterling devaluation
which can, however, be eovered by existing reeerves. Although the de-
valuation of Netherlands currency may threaten exporters of citrus
fruits and lumber (because their products are sent mainly to the Nether-
lands), the devaluation generally has been financially advantageous to
Surinam as it owes money to the Netherlands.
The production of bauxite, the most important single export cone
modityn is about normal. Inasmuch as practically all production is
exported to the US, the wave of devaluations will have no effect upon
Surinam's prospective inceee from this source, nor will American import-
ers profit to any greater degree because, az stated above? Serinam has
not had to devalUe its currency.
Gold production continues to decrease in spite of the bonus of
Fl. 0.25 paid by the government on all new gold mined. Most recent
figures indicate a decline of 46.5% from last year's production for a
similar period, ad there are no indications of the likelihood of anw
increase in production during the remainder of this year.
The harvest of rice -- the principal agricultural product both from
tie standpoint of the domestic economy and foreign trade -- is somewbet
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late in getting under may because of unseasonable rains which contin-
ned this year well into the normal dry season. From all appearances,
the yield per acre will be heavier than last year, but, as there are
sore 500 acres less under cultivation, the total crop rill probably
be about the same as last year (58,595 metric tons of rough rice).
Officials of the Surinam Department of Agriculture are consider-
ing a new plan for the rice industry involving a change from the present
method of producing only white rice to the production also of steamed
or "converted', rice, which would involve the introduction of new machin-
ery. Although such a change would increase the volume produced, persons
interested in the rice industry do not favor it. The market for Surinam
rice has been the US, the Netherlands, Curacao, and Venezuela where
there is ro demand for steamed rice, and a shift to the production of
such rice would leave only the British and French Nest Indies as prac-
tical outlets.
Militaj
'Thi small Dutch garrison force stationed in Surinam continues to
be of no political or military importance.
Subversive
ho movement of a leftist or other subversive character is known to
exist in Surinam.
International
As a dependency of the Netherlands, Surinam does not carry on any
international relations as such. Nothing of note has developed from
the conference held some months ago by the governors of the three
Guianas for the discussion of economic and scientific matters of mutual
concern. The people of Surinam continue to' be favorably disposed toward
the US.
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Situation Memorandum 62-49
The Current Situation in Cuba
1 November 1949
(Blume -- The administration is stable, but there is a great
dee jockeying for position among and within the political
parties.. The economic situation remains someehat unfavorable,
The government continues its anti-Communist attitude. Army
morale has improved, The Air Force is to be reorganized,
The economic relations with the US are being made difficult
because of the uncertain economic situation in Cuba.
-- US security interests are not seriously affected
by Cuban economic developments at present, but the developing
friction between Cuba and the US could adversely affect US
interests.
Political
The administration is stable. There is a great deal of jockeying
for position among political parties, and for control of the Autentioo
(government) machine, President Prio will probably retain control, in
spite of efforts of Senator Alemin and ex-President Grau to take over
Aetentico direction, Real accomplishments, however, continue to be
blocked by politics. Negotiations for the proposed loan (see Economic)
have been complicated by attempts by members of congress to make their
votes for the loan contingent on the granting of political concessions
and diversion of graft to themselves. Gang warfare has increased sub-
stantially in recent months but because gang activities receive substan-
tial backing from influential politicians, the administration is not
able, and is somewhat unwilling, to comply with public demands that
gangsterism be suppressed.
Economic
ihe economic situation is moderately unfavorable. It is true that
the sugar wage problem (see 13/W4y 2 Aug) has been temporarily settled
to the satisfaction of all groups concerned and will probably not arise
again until the end of the 1950 grinding season. It is also true that
most of 1946-49 sugar crop is sold, sugar prices are high, and under
the US sugar act of 194g Cuba's share of the US domestic sugar market
is large enough to assure Cuba of an export market of 2.5 to 3,1 million
short tons per year. US purchases of Cuban sugar for use in foreign
countries, however, have been decreasing as sugar production has in-
creased in wee-devastated areas. As a result of this situation, the
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2948-49 sugar crop (5.76 million short tone) has been voluntarily cut
in volume to a level 14 percent below that of the previous year, and
Cuban economists anticipate the need far further decreases in produc-
tion for 1949-50. The total value of Cuba's exports and of imports in
the first six months of 1949 were substantially lower than that of 194g:,
government's revenues collected have decreased considerably and unem-
ployment is increasing. Cuban leaders continue to dread a major eco-
nomic depression.
Cuba's current governmental economic policies -- potential sourcee
of friction between Cuba and the US; see Internationa/ -- are not IikeV
to etrengthen Cuba's basic economic strucT7-77-PUFWei, there is little
chance that the goverment loan (see 8/Wkly 2 Aug) -- negotiations for
which are said to be in an advanced stage -- eill provide long-range
benefits unless ita use is closely supervised by the lending group, be-
cause present indications are that there will be considerable graft in
connection with the loan. There are strict limitations to Cuba's capac-
ity to strengthen and broaden its economy permanently because the Cuban
gcvernment continues to he more interested in preserving as large a
sugar export market as possible, rather than in economic diversificaticn
which would tend to decrease Cuba's import requirements and develop
export items other than sugar.
It is estimated that the government's economic policies and objec-
tives will remain substantially as at present during incoming months,
that the customary graft of public funds will continue, and that the
government2s financial situation will not improve unless a loan is
consummated. Adverse factors will have only a moderate effect on the
Cuban economy in the next few months, however, because of the present
high price of sugar and the strong demand for Cuban sugar on the US
market,
Subversive
government continues its anti-Communist attitude. Havana
newspapers reported a trip of four Cuban Communist leaders to the USSR
in August for instructions. It is thought that there has been little
change in Communist strength in Cuba during recent months, but the inede
equacy of intelligence reporting on Communist activities in Cuba prevents
a complete estimate of Communist strength at this time,
1-1.-11117
e armed forces remain capable of maintaining law and order, of
protecting the government in times of stress, and in the event of a
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DS-USSR mar of controlling anti-US elements in the domestic population.
Amy morale has improved sire the appointment of General Ruperto
Cabrera to replace General Perez as Chief of Staff. The new military
intelligeme service (GRAS) has been fully activated.
The new Chief of Staff has ordered a reorganization and modern-
ization of the Army Air Force along US lines and vents air force per-
sonnel to be trained in the United States. Unsuitable craft are to be
scrapped and a fighter squadron and a boMbardment squadron are to be
formed. As of 7 Jul 49 the Army Air Force had 56 planes, 20 of ehich
were non-omatioral due to lack of spare parts or need of repairs.
International
Cuba continues to support the US as against the USSR in internn-
tional politics.
Economic relations with the US are being 'rade difficult at this
time because of Cuba ,s justified feeling of uncertainty regarding the
future. In bilateral discussions with the US and at the recent con-
ference of GATT signatories in Annecy, the Cuban delegation took an
uncompromising attitude in supporting its demands for tariff increases
for the protection of textiles and other domestic industries, tariff
increases which would decrease the market for US industrial and agri-
cultural products in Cute. Thus far, changes in the Cuban tariff have
been made only for potato imports. There have also been difficulties
between the US and Cuba over proposed changes in US tariffs. The
Cuban delegation to Annecy finally withdrew from the conference in
protest against the US grants of tariff concessions to Haiti without
first consulting Cuba, which would be affected (but not greatly) by
such concessions. Recent events in the UN indicate that there is
likely to be an increase in Cuban charges that US commercial practices
are unfair to underdeveloped areas. Such developments would furnish
Moscow withgood propaganda themes on US economic imperialism, D/LA
anticipates that Cuban-US economic relations will gradually become
more difficult as the Cuban economic situation becomes more unfavor-
able.
The Cuban government's basic opposition to US-controlled and other
foreign enterprises in Cuba continues to be manifested from time to
time despite the current attempt to obtain a large loan from US inves-
ters or from the International Bank. Various groups, including foreign
accountants, Cuban agents of foreign drug and pharmaceutical firms, and
foreign life insurance companies, have experienced discriminatory treat-
ment in recent months. It is estimated that such discrimination mill
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continue because political expediency demands that the Cuban govern-
ment defer to Cuban lobbies against US claims and that it discriminate
against foreign enterprises when it is to the governmentts advantage
to do so.
Cuba has appointed a new charge to Spain whose special task will
be to encourage Spanish imports of Cuban cigars, and is preparing a
new commercial treaty with Italy which may open up the Italian market
for Cuban products, including tobacco.
Cuba continues to be one of the foci of the Caribbean Legion activ-
ities but the Legion has gone partially underground and less is known
of its plans than formerly. The Legion may be able to operate with more
freedom in Cuba now that General Cabrera (a "more manageable" man than
General Perez) has become Chief of Staff.
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