WEEKLY CONTRIBUTIONS 27-50 LATIN AMERICA DIVISION, ORE, CIA 5 JULY 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050027-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 16, 2016
• Document Release Date: August 31, 2004
• Sequence Number: 27
• Publication Date: July 5, 1950
• Content Type: PERRPT

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CONFIDENTIAL
tatiirkaAlgaiN;;IA
5 July 1950
DitA considers particularly important this week: the degree of
Latin American solidarity in support of the UN and the US on the Korea
issue (article p. 5)
land the implicar
tams of the Argentine ratification or trio ulo weal. (p. 4).
CURRENT DEVELOPUENTS
GENERAL: Latin American Communist reaction on the Korea issue shows as
yet no signs of specific Moscow direction (p. 2), See also under SPECIAL
SUBJECTS below the report an reaction in Latin America to the Korean
crisis (p. 5),
NORTHERN AREA: The Mexican Supreme Court's decision on the Sikoale case
is consistent with. that countryls long?maintained position on national
ownership uf tho*, sUbsoil (p. 2). See also the report on the current
situation in the French Antilles (p. 9).
veeexammlen calcines MO= probably have
no serious political implications (n? '3)]
See also the report on the current situation in French
Guiana (p, 7),
SOUTERNAREA: Argentina 's ratification of the Rio treaty is a move away
from ntaird-positionn politics (p, h).
SPECIAL SUBJECTS
Reaction in Latin America to Korea Crisis . ? .......
. . . 5
The Current Situation in French Guiana. . . , . . . .
. . . . . . . 7
The Current Situation in the French Antilles. . . .
. . . a . 9
CID/61
State Dept. review completed CLASS CHANGED 0 ef
DECLASSIFIED
a DOCUMENT NO.
orritAsi. NO CHANGE IN CLA
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Weekly Contributiersi D/LA? 27-50 5 July 1950
(CIA Working Paper)
GENERAL: Latin American Communists as Yet Undirected on Korea
re e no evi ence e ar o any Moscom-diriaa Gator-
4.09" munist special activity in Latin America regarding the Korean sitir-
ation, the few instances of Commurest action having been apparently.
spontaneous and on local initiative. In Cara, for example? the
Communist Party seams to have been taken by surprise and to be
fearful of being outlawed; it is reported that Habana Communists
have been orlered to destroy- their files and that the party is
moving it ewn headquarters to a zAlicret location? looking toward
the possibility of being forced to go underground, ln Venezuela?
the use of "peace" signs is 'being intensified, and a. snail group
of youtlCommunist sylicethizert demonstrated be bre the US
_Enbassy7..'nd throw roots through tte vindoes.,
LIEXIC Court I.lecision an Sabale Case Consistent With
sao ?Md0.40??????41.1.001M?.*
g3;71173CtiOL el the enlreme .(??ert in denying 1.he
cleie of the US-owned SSbalc 'rensporation ;oriper'n, to
ti for 1 for nee-fulfillment ed" ita efTl-exploitatien .oltraet will
preably serve as the b4A6 ior settlement of sialax T,enolang cases,
Sabalo had ,reviously accepteo a eash payment for tte aetual invest-
ments in ti?Alee, and was seekine further eempeneati"n fer its
ex:oectatite; of inoome rrom development of eertate '1.elds to which
it claimpe eontractual rights. The basis ef this particular Suprene
Court dec. sion seems GO have been a lceal bechnibaIity that enabled
the co-.1n: to regard 54:late's contract as invalid. Mexico has always
clairxe;, however, that, since by its constitution subsoil resources
are th, ole property of the state, "expecte& rights aa opposed
tove', .tre nirti settlements for previous
expretetetions have been On tnit, beee.s.
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Weekly Contributions, 0/LA0 27-50
(CIA Working Paper)
5 July 1950
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Stabiliiiy not Threatened by Cabinet Resignation
The resignation of the entire Venezuelan cabinet, uncon-
firmed as yet, thaugh it was expected to occur 30 June, probably has
no serious political implications. A number of cabinet changes have
been anticipated for more than a month, and a resignation en masse
would probably facilitate reorganization by giving the jun-a---iWe
hand.
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cotmovinu"
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Weekly Contributions, D/L, 27-50
(CIA Working Paper)
5.7071950
0. ARGENTINA: Rio Ratification a Ste A from Neutrality
Re Ica Ion o ne ereaty on une y the Argen-
tine Chamber of Deputies is a high point in Argentine support of
US Hemisphere policy. It is true that the timing of the ratifica-
tion by the lover House -- the last necessary step to be taken
except depositing the inutrument yer almost certainly influenced
by the Korean crisis. It is also true that the greater apparent
immteence of world conflict will probably increase the influence
in government councils of those who view aver betveen the East
and the West as a solution to Argentina 'a economic problems, a
solution which 'would e3i,e'llenate the necessity for concessions to
the US in economic policy such as these made in anticipation of
the Eximbank loan. Om the other hand, the gain for Hemisphere
solidarity in Argentine adherence to the treaty will much wore
than offset any difficulties that would result from a possible in-
crease in Argentine refractoriness. The ratification of the Rio
treaty, as yell as the line taken by the Peron administration since
the beginning of the Korean crisis, supports the estimate that in
case of war between the East and the lest, Argentina would become
a cobelligerent on the side of the US.
ONF1DENT1AL
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Weekly Contributions, D/LA, 27-50
(CIA 'eorking Paper)
Article 7-50
Reaction in Latin America to Korea Crisis
5 July 1950
The invasion of the Republic of Korea by the North Korean Communists
and the subsequent UN and US action provided the setting for a greater
display of inter-American solidarity than has been evident for some time.
With varying degrees of promptness, all the govern/lents of Latin America
and the overwhelming majority of the non-Communist newspapers of that
area expressed their strong support for the decisions taken by the Security
Council. In most cases, they also made it a point to mention specifically
the role of the US in implementing the UN resolutions and to declare their
solidarity with the US in this crisis. The statements of the foreien
offices of various American republics, as well as articles in the Latin
American press, stressed the fact that the prestige of both the UN and
the US is at stake in this serious situation, and that effective measures
are essential to halt the Communist drive in the Far Bast, even if such
measures should become the prelude to World War III.
Possibly the most significant of the Latin American reactions came
from Argentina, Brazil, xice, and Guatemala. In Argentina, for the
first days after US action, the few comments from the official press (per-
haps acting in the absence of specific instructions) were distinctly neutral
and played the "plague on both your houses" theme regarding Worth and South
Korea. The same delay in receipt of specific instructions -- in this
instance on the COAS resolution supporting the UN introduced at the Council
meeting of 28 June -- was probably responsible for the characteristic
Argentine protest against having the CAS meddle in UN matters. On 29 June,
however, the day on which the Argentine government announced the ratifica-
tion of the Rio treaty and sent a strong message of supeoet to the UN on
Korea, the aftiristration press swung over to the US position. As a
result, the pro-government and independent papers found themselves more
united on this issue than on any other within recent menths. In Brazil,
press reaction has been generally favorable and the government's position
has been unequivocal in its support of the UN and the US, though a little
tardy and a little reserved in its support of the latter. In the CCAS
meeting, Brazil played its customary helpful role, and the Brazilian
representative strove successfully for a resolution that would so meet
conflicting ideas that it could be adopted unanimously. Mexican official
reaction has loft no doubt on which side that country stands, but state-
ments apeear to have been carefelly phrased to permit liberty of action
concerning any specific measures later to be discussed, In Guatemala,
though one editorial in a pro-government newspaper virtually followed the
Communist line, the Guatemalan ambassador to the US was outspoken in
placing his country definitely in the anti-Communist camp, thus furnishi
'411MIFIDENIVAlls
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Article 7-50
5 July 1050
further evidence of the lack of connection between the leftist political
theories of the present Guatemalan regime and any orders from the masters
of Soviet foreign policy.
Undoubtedly the vigorous action taken by the US in implementing the
decisions of the Security Council has increased its prestige in Latin
America and has united the Americas on an international issue transcendirg
purely inter-Amorican natters and tending to obscurep at least for the
time being; points at issue between the US and various Latin, American
6overrr.3onta*, Should the international situation roach a point, however,
- loading to requests by the US for particular supporting action from the
other American republics, these issues may cause greater delay and bargain-
ing over terns than might otherwise have been the case
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Neekly Contributions, WU, 27-50 5 July 1950
(CIA Working Paper)
Situation Memorandum 41-50
The Current Situation in French Guiana
(!lemayery -- Elections last fall indicate that the Radical Socialists
are still the strongest party. There continues to be a minimum of
economic activity. The military capabilities of the French army
garrison in Cayenne remain at a low level. The Communist Party
made some gains in the October elections0
little can
be said of the current situation in this French overseas depart-.
ment. It seems reasonable to assume, however, that no recent de-
velopments have affected the basic importance of this area for US
security interests.)
Political
The Radical Socialists continue to be the strongest party, with the
Socialists following as a close second; in the cantonal elections held in
October 1949 for the General Council (a body elected by universal suffrage
whose functions consist mainly of approving bills pertaining to local ad-
ministration submitted to it by the prefect) the Radical Socialists won
seven of the fifteen seats at stake, the SFIO (Socialists) five, the Com-
muniststwo, and the RPF (De Gaulle's party) one. Further moves have been
taken in the past year towards the assimilation of this overseas department
into the administrative organization of metropolitan France.
Economic
There continues to be a minimum of economic activity in French Guiana.
It is known that production of gold, the principal export, declined in 1948,
but figures showing 1949 production are still unavailable. There has been
no decision as yet to start mining the area's bauxite deposits, although in
May 1949 the Guiana Mining Bureau, a State corporation, was chartered in
France and invested with extensive powers over all mining activity in the
area. .The rosewood and balata industries have fallen off since the war. In
addition, sugar is no longer produced for export, all cane grown now being
used for rum production. Only partially offsetting these unfavorable develop-
ments has been the creation of a new industry, production of shark liver
oil, and the recent establishment of several modern saw mills, one of which
was financed by French North African capital for the manufacture of wine
barrels.
As has been the case for mapy years, French Guiana still has an un-
favorable balance of trade. The department continues to import almost
everything it needs, although much of the food it imports could be grown
locally were it not for the chronic labor shortage. There has been a
definite trend in the last few years away from almost exclusive trade with
France in the direction of increased commercial relations with other coun-
tries, especially the US.
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Situation Memorandum 41-50
1)/LA estimate.s that there will be little change in the prevailing
poor economic condition of French Guiana in the coming year. Chances of
improvement after that period will depend almost cempletely on the extent
;
and success of the activities of the Guiana igining Bureau.,
Militazy
The military capabilities of the French army garrison in Cayenne
(which consists of only one battalion with a strength of approximately
five hundred enlisted men and ten officers) remain at a low level,, The
garrison continues to be of no political significance.
Subversive
The results of the October 1949 cantonal elections for the General
Council indicate an increase in Communist strength in French Guiana (the
only one of the three Guianas in which there exists an organized Communist
Party); the number of their representatives rose from zero to two of the
fifteen seats on the Council. Nothing is known of Communist activities
or capabilities
')DIFIDENTIAIA
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Situation Memorandum 42-50
The Current Situation in the French Antilles
5 July 1950
(S -- Under the new departmental status, Martinique
aiideloupe are quieter politically, and Communist in-
fluence has dindnished. While the economic situation is
not favorable, some recent improvement is evident. Local
forces are capable of maintaining internal law and order.
The inhabitants maintain their allegiance to France and .
are somewhat suspicious of US intentions in the Caribbean.
-- The decision of the pro-US prefects not to alb-
mit to a puppet French government in the event that the USSR
overruns France is a gain for US security interests.)
Political
The gradual changeover from colonial to departmental status, initi-
ated in 1947, has resulted in greater political stability and lessened
Communist Party influence in Martinique and Guadeloupe. The new prefects?
mho replaced the vacillating colonial governors, have rallied anti-
Communist sentiment so successfully that the Conrmnists have lost much
of the political advantage they gained during the period immediately
following World. War II. These prefects have recently organized a small
special police force, the Co s Rg ublicain de Securitg (CRS), which has
been used most effectively con ob excesses o ammunist and labor
groups. Further, with the transfer of executive power from the governors
to the national government in Paris, these pressure groups have found it
increasinglardifficult to win unwarranted concessions. In contrast to
the turmoil of preceding years, during the past twelve months there has
been only one major strike, the nom-Communist, non-violent walkout in
March 1950 of government.morters? whose demands were met by the national
government, Although about ane-third of the electorate still votes the
Communist ticket, the numerical strength of the Connunist Party remains
fairly constant mdile the anti-Communist groups continue to gain adher-
ents. Unless the Communists come to power in France, there is little
likelihood that the Communist parties in these islands will regain their
former ascendancy.
Economic
---"ffg economic situation, *doh deteriorated severely during 1949? has
recently &van some signs of improvement. Labor inefficiency, absentee-
ism* and wage increases raised the production costs of the islands' prin-
cipal commodities, sugar and bananas, above market prices in 1949.
Further, the profitable rum trade was curtailed became of a glut on
the French. market. The September devaluation of the franc was a sevens
blow to Martinique and Guadeloupe because their exports go almost entirely
to soft currency areas while essential foods and manufactures are largely
CONFIDENTIAL
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Situation Menorandum 142-50
5 July 1950
obtained from dollar sources. As a result, for the first time in many
years the islands have shoffn adverse trade balances in each of the last
nao years, with imports in 19/49 valued at V111.5 million ()6 million from
the US) and exports at $29?5 million. During the early months of 1950,
ti e trade picture improved someWhat? largely as the result of new mar-
eta and better prices for bananas and the gradual mechanization and
expanding production of the sugar industry,. In addition, the economy
is benefiting from a decided upswing in the tourist trade, attributable
to the MO 1950 opening of a commercial airfield on each island, the
eenstreetnon of Guadeloupe's first modern hotel, and the routing of a
cre!ise ships to Fort-de-France for the first time since the
war, Th outlook is favorable for a continuation of this modest eco-
nomic recovery.
Assimilation of Martinique and Guadeloupe an departments of France
is changing their entire fiscal system, end the results in the long run
should prove beneficial. The national government in large measure has
taken over revenue collection and expenditures, and has initiated a
ten-year ore-equipment" program to provide modern sewage and water
systems, port facilities, schools, hospitals, and air fields In addi-
tion, it is underwriting 70 per cent of the cost of an extensive public
health serviee and is administering a far-reaching social security
pregram? Although figures are not published, it is estimated that in
1949 the national goverment collected $5 rdnion in taxes and expended
;:10 million in the area, while the departments collected and spent '35
million locally,
small native garrison, led by regular French army off ice,
omsidered capable of maintaining internal law and order. The neely
created notarized CRS (see Political) has greatly impreved law en no
meat ta the area,
:111r:ern:lye
--"TSTrPolitizal and International.),
Innernational
Tg-TiliFie of Martinique and Guadeloupe, Communist and noneCommunist
continue to be devoted citizens of France and, in varying degrees,
suspicioue of 115 power. In order to exploit this sentiment, the Commniets have interpreted the current meeting of the Caribbean Conaisenon
at Fort-de-France? US war games off Puerto Rico, the landing of Pan
American. Airways planes on the new fields, and the liberty calls of US
warehlps? as part of a master plan of the US to occupy the islande. Even
the strongly anti-Condunist prefects view the Caribbean Commission reet-
ing without enthusiasm, regarding the inclusion of the French Antilles
10102DENTI112,,
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among the "commission territories" as inconsistent with their new status
as integral parts of the Republic. There is no doubt, however, where
the prefects -would stand in the event that continental France &Wad be
overrun by the Soviets: at a recent conference between the prefects
and national government officials, in Paris, it was agreed that in such
an eventuality the prefect of Martinique would assume full executive
control over the French Antilles and would have authority to grant
vilitary bases to an outside power.
lONFEDIENTIAA
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