WEEKLY CONTRIBUTIONS 25-50 LATIN AMERICA DIVISION, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050025-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: May 7, 2002
• Sequence Number: 25
• Publication Date: June 20, 1950
• Content Type: PERRPT

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Wee Contributions
Latin
20 June 195019
considers that the article on antimUS sentiment in Brazil
(Pa 3) abd the item on continuingymmest in Peru (p. 2) merit particu-
lar attention among this neekvs contributions.
CURRENT DEVELOPIENTS
CENIRALAItAs See reports on the effects of anti mUS sentimamt in Brazil
andonthe current situation in Venezuela, under SPECIAL SUBJECTS, helm.
SOUTIERN =Al Unrest in Peru in the critical period prior to presiden-
tial elections scheduled, for 2 July mill probab.17 continue, in spite of
the government's success in suppressing the Arequipa uprising (p. 2).
See also the report on the current situation inCbile, under SPEC/AL
SUBJECTS, 'helm
SPEC= SUBJECTS
The Effects of Increased AntimUS Sentiment in Brazil 3
The Current Situation in Chile 5
The Current Situation in, Venezuela 7
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Wee4y Contributions, WU, 25-50 20 June 1950
(CIA Working Paper)
3, PERU: pal%.e.ct..edbopsatinueit colmi
and further disorders are possi..
ble despite the government's success in suppressing the Arequipa
? revolt that stemmedlfrom protest at the disqualification of the
only opposition candidate in the 2 JU4 presidential elections.
The molt failed when expected azwy support did not materializes
but not before marqrsere killed or sounds& The opposition oandi-
date and many leaders of his group have been jailed, but feeling
continues to run high and there are reports that further outbreaks
may occur in ti q narth of Peru? shich is quite possible. Dever-
theism', if Carla can retain his army support and the loyalty of
associates like Noriega, he prdbab2ys131. be returned to power in
a farcical election that sill do little to increase ?dries prestige
or that of his country. (Sbbstanee used in CIA Wkly40 16 Jun 50.)
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matEr
Weekly Contributions, WIA0 25-50
(CIA Working Paper)
Article 6-50
20 Jima 1950
Effects of Increased Anti-US Sentlama in Brazil
.0- The increased anti.-US feeling in Brazil may well
normally close cooperation of Brazil in inter-
national natters as well as delay some of the present eco-
nomic negotiations with the DS, but should yield to efforts
toward improvement based on longer-term factors.)
Anti-US sentiment, which has been increasing in Brazil during the
past year (p/La Wkly, D. Apr 504 was further aggravated during the
pact few weeks by the announcement of the large Export-Import Bank
loan to Argentina (WLA my, 16 May 50) and the published report on
the causes of the high coffee priaea of the Gillette subcommittee of
the US Senate (D/IA Wkly., 13 Jun 50), The anti-te attitudes are notice-
able not only in the press and certain segments of the pUblic? but also
among some high government officials and officers of the armed. forces.
Underlying this recently increased criticism of the US and its
policies is the feeling of Brazilians that the DS is not granting them
enough consideration in view of Brazil's record of cooperatimi in World
Wars I and I/ and Intl* immediate postwar period. ?am* high Brazilian
officials, both civiliaa and military, consider that their contribution
as allies of the US InDorldWar II was so much greater than that of
aUy' other Latin American country that the US should favor them above
all other Latin American countries; they see, in such US measures as
the loan to Argentina not the US desire to strength= the Bemisphere
as a thole, but a denial of their deserved preferential positi44
S4wdlerily? Brazilian military leaders are less appreciative of the
present US Soviet-containment policy in Europe than they are of the
fact that European countries including former enemies of both the US
and Brazil, receive US military equipment free while Brazil must pay
high prices for it. Under these circumstances one sohool of thought
in Brazil apparently advocates striving in every' way to reduce their
peculiar dependence on, and their peculiar ties with, the US (the recent
barter-trade agreementrfthWest Gernmuyis a case in point), countering
what they consider US lack of sensitivity to its peculiar debt to Brazil.
Although there is as yet no reason to alter the estimate that Brazil
would be a close ally of the US in case of another war and probably
desire again to send troops to assist in the actual fighting of the war
? some short-range security interests of the US could be adversely af-
fected if this anti-US feeling continues unabated. The Brazilians, for
example, may become intransigent in their negotiations ea friendship,
navigation, and commerce treaty., similar to the one desired by the US
tit
Oa
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SECRET
Weekly Contributions, B/LA, 23-50 - 2 a.
(CIA 'Marking Paper)
Article 6.50
20 alms 1950
and drawn up betueen the US and Uruguay; or they may continue to study"
US Steel's application to exploit the large manganese deposits in the
State of Lletto Grosso and thus may delay the potential flew of that =flea-
nese ore to the US, It is also possible that this anti-US feel-imam,
further stimulate the nationalistic attitude refloated in the "Brazil
for the Brazilians" slogan ehich, along milli the pressure of politicians
seeking the votes of nationalists and Communists for the important Octo-
ber elections, mgy force passage of a bill nowbofore Congress that
could curtail the flow of critical and strategic ndnerals to the US
(EAA 11474 13 'Inn 50), It can also be expected that Braltliaillmake
every effort to suppeet the present high price of coffee through stib-
sidles to the producers as moll as including larger ameunts of coffee
in the barter agreemeats with European nations, This latter step mould
orient Brazil's foreign trade sligarbly more towards Europe and prejudice
someehat the present large exports to Brazil from the US,
Mile the prospect is not bright that, saving extraordinary efforts
on the part of the US, this anti-US feeling in Brazil mill decrease to
may great extent in the immediate future, faotors operating over the
longer term? such as those that have for so long favored particularly
friars:Ay relations between the tee countries will be available to
support efforts of leaders in both countries to ameliorate present con-
ditions. Sober second thought among Brazilians will point out, as one
publisher of ,a large newspaper chain has already done, that the Gillette
report is only a report of a subcommittee of the US Congress and not the
official position of the US Government, The sting of the Argentine loan
min be somewhat assuaged by publicity of various new Exidhank loans to
Brazil for the additional development of its steel industry, cement
industry, and electric paver, Evidence of constant US interest, such
as that shamelay visits of hidhinataking US officials, both civil and
military, will be appreciated, Orders for critical materials, such as
the US renewal this month of the quartz-crystalasourchasieg program that
had, 'Wm suspended for nany.monthe? will be valued by more moderate and
Use nationalistically minded Brazillane, And finally, naturally comple-
mentary economies ? rather than natural4 competing, as in the case of
US and Argentina ? favor cooperation in the name of common sense;
Brazilian opinion can well return to the realization that the US will
continue to be Brazil's best customer regardless of additional nera
trade agreements with European nations,
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Weekly Contributions, fl/LA, 25-50
(GIA Working Paper)
Situation Umwrandam 38-60
20 Jane 1950
The Current Situation ta Chile
e- The Chilean government appears reasonably stable
esp ;? a political struggle regarding sioonordo planning.
Favorable factors slightly outweigh the unfavorable in the
present economic situation. There has been mo significant
change in the morale, loyalty, training, or efficiency of the
armed forces in the last quarter. Chilean Communists continue
to devote their principal, efforts to the political field.
There has boon no significant change in Chilete international
relations.
-- US security interests have not been importantly
affected by ?yenta in Chile in this period.
Political
""---"ITZ-Chilean government appears reasonably stable at the end of the
recent quarter, during which the most significant political struggle has
boon revolving around econouic projects advanced by the minister of finance.
Backed by the increasingly pamerful white-oollar unions (JUDEMO and taking
advantage of ehat had been expected to be merely an interim appointment,
nlevtater Vial has nought support from Chilean workers by proposing a far-
reaohing plan of mace eubsidies to serve as an adjustment to inflationary
conditions. The plan, passed by the Chilean lower holm, has proved to
have such extensive popular and political support that Vial, mho was expected
to ruin himself politically after a short tour in offices now appears to be
assuming a major role. The *nal Plan", however, faces its real test in
the senate, whim conservative power is greater than in the lower house.
President Gonzalez Videla, whose personal position appears somewhat stronger
since his return from the US, has shown his usual political astuteness by
adopting a receptive attitude towards the "Vial Plan" and is apparently
milling to play ball with the new finance minister so long as he can advance
his own ende by so doing. The prospect for the fixture, although it un-
doubtedly inoludes political turmoil over the 000nomio plans, is reasonably
favorable s no really serious threat to the stability of the present Chilean
regime is apparent at this time.
BOonomic
----"Mrorable factors slightly ottweigh the unfavorable in Chile's present
economic situation* The principal item on the credit side is the dramatic
rise in copper prices during the past twelve months (fram 17 cents a pound
in June 1949 to 22 112 cents a pound in Juno 1950). Against this must be
connidered the continued monetary inflation, a politico-eoonamio drive for
increased wage subsidies away? of strikes reducing production and income,
and the small benefits t: date from the embryonic industrialization pro-
gr. Moreover, Chile will not derive full advantage from increased copper
prices if the US Congress does not re-enact the suspension -- 'which expires
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Weekly Contributions, D/Lii., 25-50 20 June 1950
(CIA. Working Paper) '
Situation Memorandum 38-50
sp June 1950 of the two cents per pound US duty. On, balances however,
the outlook is somewhat more favorable than it mas three months ago; ands
if the strikes and inflation do not get out of hands Chile should be able
to advance eoonomically in the ooming quarter,
111-11.1*
ere has been 334 significant change in the morale, loyalty, training
. or efficiency of the armed forces in the last quarter. The arty and the
oarabineros have demonstrated their effectivenems in maintaining order dur-
ing the potentially dangerous period of widespread atrikes. Their loyalty
to the government and capability of controlling violence is expected to
continue during the coming months.
Subversive
-ista continue to devote their principal efforts to the political
field -- probably because the now Chilean cabinet is less conservative than
its predecessor and contains more members friendly to Communists. The
changed Comnuniet emphasis is noticeable in efforts to win political
collaboration of various groups for the purpose of repealing the Defense
of Democracy Lax. Consistent with this political efforts the Communists
have concurrently refrained from overt action in strikes and other dis-
tutbaacea although their capability for causing trouble remains high and
there have been nUMerous opportunities far such activities within the past
quarter. Furthers the elimination of the hated law has taken precedence
even over "peace" as a stated objective in ComMunist front groups. D/Lti
believes, however, that, although the Communists have made certain political
gains and nay continue to vrin further support on this one issue, their drive
to repeal or alter the Defense of Democracy Law is not likely to be success-
ful in the immediate futures since conservative and moderate groups are
as intent on its retention as Communists and many liberals are for its
repeal. It is not expected that net Comrunist strength will increase
significantly withinthe next quarter.
International
---"---VW(Vis been no significant change in Chile's international relations
during this quarter. The visit of President Gonzalez Videla to the US
was the most outstanding single event on the Chilean international scene.
Both the. Chilean people and President Gonzales have seemed satisfied with
the results of the trip; the only benefit apparent thus fars'howevers has
been the important, if imponderable) one of renewing traditional US-Chilean
ties of friendship. President Gonzales' strong denunciations of Communiam
during his US trip and his proposal for the creation of a democratic inter-
national in order to combat Communiommay be taken as indications that
Chile will continue her ardent anti-USSR policy. Chile is expected to
resume relations with the new Batten military juntas in spite of a Chilean
protest over lack of assurance that democratic elections Will be held. A
move to resume relations with the Venezuelan military junta also is possible.
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Weekly Contributions, 1)/lit, 25-50
(CIA Working Paper)
Situation Memorandum 39-50
The Current Situation in Venezuela
20 June 1950
(Summary -- The political situation is somewhat lees favorable
than throe months ago. The economic position is essentially
unchanged. The military situation also is unchanged except
for reorganization of ffea general staff. Communism has received
a setback from dissolution of the party. There have been rela-
tively minor difficulties with Cuba, the Dominican Republic, and
Great Britain.
-- Recent developments have not seriously affected US
security interests.)
Political
The political situation in Venezuela iosomewhat less favorable than .
three months ago, principally because Acci6n Democriltica and the Communists
appear to have entered a phase of more aggressive activity. This has been
evident not only in the petroleum workerso strike (see Eeonomic below),
but also in a number of isolated dietarbances by armed civilians which,
though largely unsuccessful, have created an atmosphere of increased tension.
It ie true that recent Clandestine activities have probably strengthened
the unity of the junta; it is also true that there is little indication
of a decline in the government's ability to control the type of sporadic
violence which has occurred recently, and that there is no clear evidence
that Al) is now capable of directing more concerted revolutionary action.
Nevertheless, the continuation of minor outbreaks, however unsuccessful,
would probably delay the restoration of political liberties essential to
the preparation for elections, and it is quite possible that such delay,
rather than a major revolutionary attempt, is the immediate objective of
AD.
The announcement of the draft electoral statute on 25 May is only one
of the first stepe in the long process of preparing for elections. Progress
towards constitutionalism will be slow, and repressive measures will prob-
ably continue for some thee.
Economic
Mere has been little significant change in Venezuela's economic
position during the past three months. The government continues to be
gravely concerned over the possibility of drastic US restrictions on oil
imports (1)/LA Wkly, 21 Mar 50). Meanwhile, the government appears to
have become resigned to the prospect of termination of the US-Mexican
trade agreement, by which Venezuela has enjoyed, through the most-favorede
nation clause, favorable terms for oil exports to the US; and petroleum
production has been maintained at a generally high level for the past
three months. It is doubtful, however; whether Venezuela can continue
to find markets for all its oil at present high levels of production.
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Weekly Contributions, D/LA, 25-50
(CIA Working Paper)
Situation Memorandum 39-50
20 June 1950
The results of the petroleum workers' strike of 3-13 May are of mixed
significance, and its ultimate effects may not be fully apparent for some
time. In terms of its alleged objective -- revision of the commissary and
wage-scale clauses of the collective contract the strike was a failure.
As a test of strength and as a means of embarrassing the government and
raising the morale of the workers it was at least partially successful,
inasmuch as nearly the entire industry was for a brief period strike-bound.
The government showed a certain weakness in failing to issue general orders,
leaving strike-breaking measures largely to the discretion of local authori-
ties. The most important immediate results, dissolution of the Communist
and AD unions and the Communist Party, while creating an obstacle to future
united action, will undoubtedly intensify the hostility of the labor move-
ment towards the government, which the latter has done little to counteract.
Military
:There has been little evidence of a decline in the loyalty of the
armed forces, and, as long as the junta members themselves remain united,
.they can probably depend upon the ihpeort at least of the older officers.
Junior officers are a more questionable factor. It is to be expected
that AD will make a continuing effort to penetrate the armed forces, and
may possibly increase its influence not only among enlisted men, but also
among the junior officers.
Possibly most important of several recent Changes in the Ministry of
Defense is the replacement of the Inspector General's office by the newly.
organized Third Section (opera lions and training of the Armed Forces
General Staff. The new 0-3 chief, Major Julio Cesar Angola, i?eported
to be enthusiastic about US training and organization methods.
The Venezuelan government Continues European arms purchases because
of the price differential or the non-Availability of the US product. In
spite of this obstacle to its effectiveness, the work of the US Army Mission
appears to receive increasingly enthusiastic acceptance.
Subversive'
Communism received a sharp setback with the dissolution (13 May) of
the Partido Communiata Venezolano (PCV) as a direct result of PCV leader
ship in the recent petroleum workers' strike. It is true that the dis-
solution decree was not directed primarily against Communism as such; that
it dces not affect the smaller dissident Communist Party (the Partido
Revolucionario del Proletariat* - Communiata); and that its effect upon
Communist front organizations is not yet known. Nevertheless the decree
(together with the decree dissolving COSUTRAPET) affects the principal
Venezuelan Communist Party, especially in the sphere of labor from Which
it derives its greatest support and in which its greatest potential threat
to US interests exists.
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Weekly Contributions, 041.1 25-50
(CIA Working Paper) .
Situation Memorandum 391-50
P79-01090A001!PA0050025-8
20 June 1950
The theory that Communist partieg are more difficult to control if
driven underground, and actually may profit from being outlawed, is not
necessarily applicable to the present 'situation in Venezuela. The Com-
munists will probably lose large number!, of marginal followers (especially
in the labor unions) whose support was predicated on personal advantage
rather than Marxist convictions. It may be assumed that the government
will be vigilant in apprehending PCV leaders, most of whom are knawn.
It is not likely that Communipt Party discipline in Venezuela will be
adequate.to the demands of effective underground organization. Therefore,
while the AD cause may gain some additiOnal support within Venezuela,
Communism will probably decline in strength.
International
Certain minor difficulties, in which Venezuela became involved with
Cuba, the Dominican Republic, and Great Britain during the past three
months, seem no cause for concern. Relations with Cuba, strained as the
result of a magazine article critical of the Venezuelan junta written by
a Cuban official (D/LA Wkly, 23 May 50), will probably be patched up by
a Cuban offer of apologies. The Venezuelan government, howevervwill
continue to regard as overly tolerant the attitude of the Cuban govern-
ment towards AD exiles in Cuba. The asylum episode that threatened to
disturb Venezuelan-tlomcan relations is now coming to a close. .The
Dominican government has yielded to the extant of delivering the asylees'
passports to the Venezuelan embassy, on the understanding, however, that
Venezuela would replace its ambassador, whose eccentricities are reported
to have disturbed his own government as well as the Dominican government.
There is no reason to doubt that the British ambassador's protest over
firing on a Shell Company British-flag tanker about 45 miles off the
Venezuelan coast by the Venetuelan naval training ship Canaria and the
boarding of the tanker in search of arms allegedly being smuggled into
Venezuela will lead to an amicable settlement.
2er0805;"?4---- 9.
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