WEEKLY CONTRIBUTIONS LATIN AMERICA DIVISION, ORE, CIA 28 DECEMBER 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200040013-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: November 9, 2016
• Document Release Date: July 27, 1998
• Sequence Number: 13
• Publication Date: December 28, 1949
• Content Type: SUMMARY

Approved For lease 199 P79 O90A000200040013-2
Wee Contributions
Latina vica sa r~ra ` Y -', CIA
29D e rab er1 9
Latin Mi erica Division considers the item on the Cuban -Do: st_i,ca a
situation of particular .Importance because of its implications a rse
to the US interest in Irwasphere solidarity.
25X6A
C MALx She tenses situation between Cuba and the Dominican I public is
now being considered by the Inter Arira can Peace Conmittee (p. 2).
I?t'J t i ARC : In :t t , mane to overthrow the present regin are
i the British Virgin Islands a recent :: onslwa-
tion illustrates creasing dissatisfaction with economic rest.> a nt;s
(p. 3). See also the port on the cur? elt situation in G te) la (p. 9:
CEN .L AREA,: See the report on the current situation in Brazil (p. 5).
SOUT ER..R AREA: Bo lu is vs recent &r Mr shaketko may foreshadow sia kse: v enc e
of the govern nt to ari y leadership (p. 4).
SPECIAL SUB..)",ti F-
Fhe Cis-rent Situation in T Brazil . . . . . . ... . . . . . . . . , . 5
The Current Situation in Cuatez l=a,
r;EV L'; DATE:
UAT[ ~, REVIEWER:
Approved For Release 1999/09/02 Cl RDP79-0109OA00020004001.3-2
 Approved For i ease 1999/09/gi A-RDP79-090A000200040013-2
1'eekly Contributions, D/IA
(CIA Working Paper)
25X6A02
4.
28 December 194,
'BRITISH VIRGIN ISIANDS: Unrest Results from Economic Problems
race incident e t in
Islands is indicative of the difficulties arising from the exist-
ence of separate political units within a small and otherwise
homogeneous area. Over one thousand British Virgin islanders
(almost one fifth of the total population) demonstrated on 24
November against the immigration barriers of the US Virgin Islands,,
demanding either relaxation of these barriers or "annexation" by
the VS The demonstration followed the repatriation of a number
of British Virgin Islanders who had been illegally residing in the
VS Virgins. The repatriation resulted from the complaints of US
islanders that they were losing their jobs to these illegal immi-
grants., known as "wet backs". Remittances from "wet backs" consti-
tuted an important source of income to mfr British Virgin Islanders.,
particularly after devaluation.
While 03 security interebts are not notably
affected, the situation is illustrative of the problems emanating
from the fact that the Antillecn area is divided into a number of
political entities. Regulations promulgated by the metropolitan
governments have inhibited normal commercial activity within the
area as a whole, and social and economic difficulties of the
European colonial territories have been aggravated as a result.
Even the effeotivcnoss of the Caribbean Commission., an international
organization created to deal with such problems, is limited by the
necessity of working within the framework of policies established
by the four metropolitan governments involved.
The conception of an area-aside approach to
economic problems pertains particularly to the British territories;
it has no particular support in the relatively prosperous Dutch
islands, or in the-French Caribbean territories where the Communists
have inspired fear of US domination. It can be anticipated that,
while most of the people of the British West Indies will remain
politically loyal to the Crom.. thore will be increasing dissatis-
faction with economic ,estraints.
Approved For Release 0-. CIA-RDP79-0109OA000200040013-2
 Approved For F (ease 1999/0%0&CIA-RDP79 090A000200040013-2
Weekly Contributions, D/IA 29 December 1949
(CIA Working Paper)
5. BOLIVIA : Ar shaken
The appointse nt of Brigadier General Qulroga as army
conoander in chief, although it appears to have averted the threat
of a military coup for the present, has probably 'weakened the
position of the civilian government, which faces municipal elec-
tions this week. Continuous army plotting (see CIA Wkly? 4 Nov 149)
had developed into a struggle between Quiroga and the army commander
in chief; Quiroga ultimately demanded that both the commander in
chief and his chief of staff resign. The government's accession to
such a significant demand by Quiroga, D/IA estimates, increases the
likelihood of future army pressure on the civilian government and
may foreshadow the complete subservience of the government to-army
leadership - or, if this is denied, its eventual replacement by
a military group.
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000200040013-2
 Approved For R~Tease 1999/09/02 : CIA-RDP79-90A000200040013-2
SECRET
Weekly Contributions., D/IA
(CIA Working Paper)
Situation Memorandum 75-49
The Current Situation in Brazil
2S December 1949
(Sin wry -- The government continues to be stable despite
growing political disunity. A solution to Brazil's major
economic problem -- external debt position -- is in sight.
The armed forces remain loyal to the Dutra administration.
Communists continue to be aggressive but are not a threat
to the regime. Brazil continues its close cooperation with
the DS in international affairs.
Recent developments in Brazil have not adversely
affected US security interests.)
Political
tie date for Brazil's presidential election has now been set for
3 October 1950. In the meantime, the two major parties, the Partido
Social Demooratico (PSD) and the Unilo Democratica.Nacional (UDN),
seem further from reaching agreement on a presidential candidate than
they have ever been. President Dutra'a continuing efforts to effect
a compromise solution have caused open division in his own party (the
PSD) between his adherents and the pro-Vargas faction (see D/LA Wkly,
29 Nov 49). At the same time, his proposals have failed to gain accept -
am* by the UDN, where a growing partisan movement favors that party's
unsuccessful candidate of 1945, Brigadeiro Eduardo Gomas. Only a "non-
partisan" military candidate such as War Minister Canrobert (see D/IA
19 Oct 19) would now seem to have a-chance of holding together
the. participants in the Inter-Party Accord, All this division and
indecision is a boon to opposition candidate Adhemar de Barros of Sao
Paulo (who' in fact, privately takes credit for the appearance of
posters in his capital favoring Brigadeiro Gomes), At the moment,
Barron' chances for the presidency seem good. There has not yet been
any public confirmation of the electoral agreement he claims to have
made with Vargas (see D/L4 Wkiy, 29 Nov 49), although the two have
recently conferred. Despite growing political disunity in the admin-
ietration, the support of the army continues to guarantee stability.
Economic
gas Its major economic or financial problem, its external debt
position, is closer to a solution now than it has been for the past two
years. With the aid of a drawing of US$22.5 million from the Inter-
national Monetary Fund (see D/IAA Wkly, 29 Nov 49), the increased dollar
receipts from its coffee sales (see D/LA Wkly, 4 Oct 1i9), and continued
adherence to its strict import-export and foreign exchange regulations,
Brazil should be able to pay off most of its commercial dollar backlog
within the next two months and to relax some of its controls on imports
Approved For Release I 999/09/ - ? ; DP79-0109OA000200040013-2
5.
 Approved For ease 1999/09/02 : CIA-RDP79 090A000200040013-2
SECRET
Weekly Contributions, D/IA 2 - 20 December 1949
(CIA Working Paper)
Situation Iftmorandum 79-49
from the to by the second half of 1950. Brazil's external debt posi-
tion will also be improved by the recently afgned agreement with Italy
for tha unblocking of Italian assets in Brazil. Provisions of this
agreement require that a large part of the unblocked assets be invested
in a Herr colonisation company to be established in Brazil. During the
past three months Brazil also concluded a bilateral trade treaty with
P3rtugal to stimulate trade with that country, and established a 24-
month credit agreement with Spain for purchases of Brazilian cotton.
The pressure on the Brazilian government for a devaluation of the
oruseiro has subsided, although uneasiness is still evident in some
Brazilian trade circles - particularly among cocoa, textile, and
lumber Interests.
Inflation remains as a problem for the Brazilian government, but
the rate of increase in the cost of living has slackened, and the prices
of some food items have actually been reduced during recent months. No
complete solution to the problem of inflation appears to be in sight,
however.
Although Brazilian Foreign Office officials have appeared sympa-
thetic to the US request that shi~ is of manganese to the U5 be
Increased (see D/IA Wkly, 11 Oct 49), the anticipated increase has not
m teriali.zed, and only about 6,000 tons were exported to the US during
November.
Industrial activity remains brisk with little or no unemployment
reported. Some US firms are currently expanding in Brazil and others
are making plans to expand in the near future. During the coming months,
prospects for continued improvement of the general economic situation
are excellent.
Mill
Brazilian army is believed to be somewhat below strength, as
is normal prior to the annual induction of conscripts which will begin
after the first of the year. Only one class, however, that of 1931, is
to be called up in 1950. The Brazilian armed forces continue to favor
US equipment and training. A decree-law promulgated recently sets up
a War College to present courses paralleling those offered in the US
National War College and Armed Forces Staff College. US Arnr, Navy.,
and Air Force officers have assisted in organizing the new school.
Mere is reason to believe that the Brazilian government was actively
negotiating in September for the purchase of 50,000 - 100,000 military
rifles from Belgium, although it is not known if the deal was closed.
Military morale oontinues high and the loyalty of the Brazilian armed
forces to the present government may be expected to continue.
Approved For Release 1999/09/0 ~B,QP79-0109OA000200040013-2
 Approved For Pease 1999/09/04-RDP79 90A000200040013-2
cakly Contributions, D/IA
(CIA Working Paper)
situation l morandum 75-49
- 3 -
29 December 1949
Subversive
gi .ian Communists have continued in their course of provoking
violence were possible (see D/IA Wkly, 4 Oct 49), although not on
such a highly organized scale as was evident several months ago. Only
sporadic attempts to hold "peace" meetings have been reported recently,
and revived activity in the "petroleum defense" campaign (see D/IA Wkly,
g Nov 49), has not yet gained great impetus. No reports have been
roceived concerning the national convention on "Defense of Petroleum
and the National Economy" which was scheduled to be held in Rio 9-12
December.
Communist capabilities for stimulating hostility of Brazilian
liberals toward the government (indicated in D/IA Wkly, 4 Oct 49) wire
demonstrated in Rio last month. An open-air political meeting spo r
sored by a Communist--front group, but presided over by sell--known
non-Communists, ended in a clash between police and demonstrators in
which a woman Communist was killed. All witnesses agreed that the
meeting had been conducted in a legal and orderly manner, and each
side accused the other of starting the shooting without provocation.
Opposition members in the Chamber of Deputies placed the blame on the
police and pointed out that any political gathering would be at the
mercy of the Communists if their mere presence at a meeting was cause
for police intervention. Under fire from the Chamber and the press,
the Minister of Justice promised a thorough investigation and announced
a now set of instructions for policing public meetings. It is doubtful,
however,, if these will prevent further trouble of the same sort. Despite
their capabilities for disturbing public order and aggravating the ill-
feeling of the non-Communist opposition towards the administration,
Brazilian Communists are still in no position to threaten the national
security and are not expected to make any gains in this direction in
the near future.
International
security interests continue to be favored by Brazil;s inter-
national policies and practices, Brazil continues its general policy
of prior consultation and close cooperation with the US in the inter-
national field. The desire of Brazl for the maintenance of good
relations with the US is evidenced by its recent action in regard to
a new shipping decree which. would require that all southbound cargo
charges be paid in cruzeiros instead of dollars - a proposal opposed
by some US officials and all US maritime interests affected. In spite
of'the Foreign Minister's expressed belief that the decree is really
a matter of domestic jurisdiction and one that will protect and further
vital Brazilian interests, he has agreed to consult with US officials
and to give them a hearing before any final action is taken. Another
Approved For Release 1999/09/ ~79-0109OA000200040013-2
 Approved For $4Iease 1999/09/4-RDP791090A000200040013-2
emk3y Contributions, fl/LA
(CIA Working Paper)
Situation Memorandum 75-449
29 December 1949
example of Brazil's close cooperation was its informing US Embassy
officials In Rio that Brazil was not actively considering recognition
of Gomm mist China but was matching developments and was anxious to be
kept informed of t policy regarding Ohio. Fortunately for US-Brazil
relations, the sensational publicity given to US Congressional hearings
on the coffee prices, which appeared to place the onus of trouble on
Brazil, =a ended before there was any serious threat to the good rela-
tions existing between the two countries.
The Foreign Minister has advised the US that Brazil will oppose
establishment of a high commissioner under the UN to handle refugee
problems when IRO is terminated, as it was. his belief that it would be
both illegal and too oostly. Brazil can be expected to continue its
efforts to cut costs in the operation of the UN and its specialized
agencies. During the past three months, economic agreements were con-
eluded with Spain, Portugal, and Italy. (See Economic section.) There
has been no change in Brazil*s relations with its neighbors. (See D/1A
Rkly, 4 Oct 49.)
Approved For Release 1999/09Q MA79-0109OA0002000400 3-2
 Approved For ease 1999/09/02 CIA-RDP79 090A000200040013-2
Weekly Contributions, D/IA
(CIA Working Paper)
situation orandum 76-49
28 December 1949
The Cun-ent Situation in _ t uatemala
(S-~ Although the arnr remains a potential threat
U the stability of the Arevalo government, the possibility
of an ari revolt in the.Doming months has decreased. In
domestic political affairs, the government continues a
cautious., moderate course. The national econouy remains
stable. Conditions remain unfavorable for the expansion
of Commmist influence. No change in. the basic objectives
of Guatemalan foreign policy is apparent. Relations frith
the Caribbean "dictatorships" remain unfriendly.
-- A favorable development, from the standpoint
of US security interests, is the increased stability of
the Arevalo garrorrm3ent,, in eon junction with its conciliar
tory attitude toward US business interests and pbssible
minimisation of ito aid to Caribbean revolutionaries.)
Political
die political situation in characterized by an. easing; of tension.
The ' government has not,., in general, deviated from the cautious course
on rtich it embarked soon after the assassination of Col. Arena in
July. Since the removal of dos lbany as Foreign Minister., no other
prominent leftists have left the government. However, foreign service
appointments have been given to a number of persons allegedly involved
in the Arena assassination plot and to leftists unpopular in Guatemala.
Removal of these individuals. from the local scene has possibly aided
in reducing. domestic political tensions.
A moderate course is also being taken b:r the three Arevalista
political parties (the PAR, PRN,and the FPL), as-has been indicated
by their rejection of Jorge Carcisa Gr'arrados as a coalition prsaiderr-
tial candidate. Garo$a Granados, one of the principal authors of
the liberal 1945 constitution and a prominent leftist politician and
diplomat, has not abandoned his candidacy, and a new party, the
Partido del Pueblo, has been formed to support him.
D/IA estimates that there will be no great change in the political
situation in coming months.
Economic
Tre economy of Guatemala, largely dependent upon the production
and sale of coffee, remains . baeioally sound and shows no signs of
adverse change in the near future. Despite flood damage, the coffee
crop is expected to equal that of last year. Coffee income should
Approved For Release 1999/094D -B.QP79-0109OA000200040~13-2
 Approved For RYase 1999/09/0 ?S t -RDP79- 90A000200040013-2
Weekly Contributions, D/LA -2
(CIA Working Paper)
Situation Memorandums 76-49
2S Decenber 1949
be higher this year, due to increased prices, and should help to correct
the adverse trade balance. It is true that a large number of Guatemalan
producers, who sell their coffee on contract, will not benefit from the
recent sharp rise in coffee prices. Hower, coffee produced on govern-
ment-operated farms, which is sold at auction, should bring in larger
revenues, which should aid the goverment in extricating itself from
current financial difficulties. Proceeds from a 15 percent Increase
in coffee export tame,, and other possible tax increases, may help the
govermsent balance its budget. If this appears possible, it is unlike3y
that Guatemala will ask for a rehabilitation loan from the International
Hank, which would be politically undesirable in an election year.
Guatemalan government officials have continued their rather con,-
ciliatory attitude toward US bubiness interests. However, with the
complete withdrawal of US petroleum interests, the possibility of the
early exploitation of Guatemalan oil reserves has vanished.
t hough the loyalty of the as to the Arevalo government remains
questionable, the possibility that ijor Paz Tejada (the now Chief of
the Armed Forces) will lead a revolt or attempt to disarm or disband
civilian leftists now appears slight. Major Paz, who revealed such
plans soon after his appointment, has displayed inexperience and a
lack of confidence in his own resources. Moreover,, disastrous floods
in October permitted the government to declare a national emergency,
followed by the suspension of constitutional, guarantees, in the course
of which a number of oppositionists (including some former army offi-
cers) were arrested and deported. While the sympathies of the army
were indicated by the acquittal, in a military court, of 21 officers
accused of participation in the revolt of 1-19 July, the strength of
anti-army elements in the government is shown by the subsequent sen-
tencing of these men to prison terms.
Subversive
With -the existing leftist political parties seeking a compromise
candidate, and with the government itself following a more cautious and
moderate policy, conditions are unfavorable at this time for the expan-
sion of Communist political influence. In the field of labor, there
has been little change in Communist Influence. In governmental affairs,
it is true that the strongly pro-Communist Carlos Newel Pellecer was
recently given an appointment in the Ouatemalan legation in Paris
which may indicate that the new Foreign B[ntc ter, Gonzalez Arevalo, is
not immune.to Leftist pressure within the government. Pellecer, who
would have been in a strategic position to aid European Communists had
he not been deported to Belgium by the French government, is, by US
standards, a dangerous troublemaker. However, in view of other recent
Approved For Release 1999/09/02 : CIA-RDP79-0109OA000200040013-2
..Low` l0.
 Approved For Fease 1999/09/Q&v
090A000200040013-2
Weakly Contributions, it/LA
(CIA Working Paper)
Situation memoreacb m 76-49
2 December 1949
foreign service appointments, his appointment may have been due to a
desire, on the part of the administration, to remove him from the local
political scene and to ease domestic tension. This is suggested by the
determination with which the government ignored French protests prior
to Peliecer'a departure..
Communists and pro-Communists may be expected to become -oare active
as they attempt to coordinate and consolidate their activities in the
1950 political campaign, but D/IA considers any significant expansion
of Communist Influence in Guatemala =likely at the present time.
International
f s foreign policy remains basically unchanged. Its
fundamental principles continue to include opposition to "dictator--
ships", cooperation and friendship with "democracies", opposition to
"aolonialisza", and a fundamental alignment with the AS. Current
emphasis is being placed upon the betterment of relations with the US
and the denial of official involvement in plots to overthrow the govern-
ments of other circuar-Caribbean countries.
The continued presence in Guatemala of Caribbean Legion members and
the known antipatly of Arcvalora administration to Trujillo and Somata
have been manifest in numerous rumors, accusations, and implications.
In recent months, however, there has been no concrete evidence that
foreign revolutionists within Guatemala have been aided by the Guate-
malan government in their plots against Honduras, Nicaragua, or the
Dominican Republic. D/LA considers it doubtful that the Guatemalan
government will, in coming months, give material aid to such revolu-
tionists, or that it will greatly encourage their activities.
Approved For Release 1999/ 1502 CIA-RDP79-0109OA000200040013-2
Imo.....,,,.