WEEKLY CONTRIBUTIONS 34-50 (Sanitized) CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050034-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: August 20, 2002
• Sequence Number: 34
• Publication Date: August 22, 1950
• Content Type: PERRPT

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42674
CONIRDINTIAL.
Weekly Contributions 3ir50
22 August 1950
CURRENT DEVELOPUENTS
GENMALt It is not likely that OAS machinery will be used in connection
with the problem of Latin American material assistance in Korea (p, 2).
NORTHERN AREA: Obeys economy has been strengthened by the increased
sugar demand resulting from the Korean situation (p. 2).
CENTRAL AREA: Brazil, which had contemplated shipment of strategic
quartz crystals to Czechoslovakia3, may well be deterred frolax this salec
despite the lack of basic agreements which might protect US interests
in such cases (p, 2).
SOUTHERN AREA: Bolivia :s efficiency as a producer of petroleum will be
substantially improved if, as is planned, a US firm is called to manage
oil operations (p. 2).
SPECIAL SUBJECTS f
The Current Situation in Honduras . . . . . . . 0 0 0 0 0 44 47 0 i? .14
The Current Situation in Argentina. .., . 0 0 0 0 0 0 ? 0 0 0 0 0 0 V 7
State Dept. review completed
tOtiiifiDENTIA
DOCUMENT NO.
1'30 CHANGE IN CLASS.
1-1 aticLASS1FlEG
CLASS. CHANGED TO: T3
NEAT REVIEW CATE:
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SELVIEWER
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25X1
Approved FoS4elease 2002/g WM 100200050034-8
Weekly Contributions,
(CIA Working Paper)
34-50 22 August 1950
GENERAL: OAS Collective Action Rerding Korea
TIFRZEiTfilrean sugges an ariZbin American responses
to the UN request of 14 July for material assistance in Korea be co-
ordinated through the OAS is not likely to be followed at this time
since the US and SOIMO of the other American republics feel that OAS
collective action at this stage mould only matters farther.
Should the international situation be aggravated, however,
it is possible that a suggestion from one or more countries for a
meeting of Foreign Ministers of the OAS to consider Hemisphere inter-
ests would receive general acceptance by Latin American governments.
2. CUBA:_iIncsreeDemandforSr_Strets. liqlELg229.2my
itii-a-reifli-r-&---denirisun for sugar-;-creirila-pTnTeTaifiCiiiat of the
Korean situation, has had a favorable effect on Cuba's economic
prospects in general. As sugar is the mainspring of the econonya
the US purchase of an additional 600,000 tons an August com-
bined with increasing demands by other users ? has been felt in
every phase of the economy. Prior to the outbreak of hostilities in
Korea, it had.appeared that there would be a largo carry-over of un-
sold sugar from the 1950 harvest, and this fact tended to darken
future prospects, An this has been changed since 25 June 1950 and
boom conditions have been reestablished. It is true that concomitant
boom effects such as higher prices and temporary scarcities of imported
goods have also made their appearance, but this is less important than
the changed sugar situation, Ebth economic and political stability
will be favorable affected as the Prio administration will be saved
from several difficult problems of its can making and can count on
sufficient income to cover its immediate obligations.
BRAZIL: Goverment May Refuse Quartz Sales to Czechoslovakia
he az ian governmenrigiiar=Mnced7W-DS moral
pressure to prevent the contemplated shipment of 600 kilos of quartz
crystals to Czechoslovakia. Representatives from that country re-
portedly have been active recently in attempts to purchase large
quantities of Brazilian quartz, presumably for transhipment to the
USSR. That vitally strategic mineral ramke high among the USSR Js
needs of essential materials --- as it does for the US.
This negotiated purchase by Czechoslovakia points up the
lack of a basic agreement with Brazil (or with apy Latin American
nation) for the denial of strategic materials of value to the Soviet
war effort.
14. BOLIVIA: Possible Management of Gtnrematt Fetroymulam_byjp_
TRadent Utriolagoitials approval of a US proposal that
the government petroleum agency CUM engage a US firm to manage
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25X1 Weekly Contralutions,
(CIA Workini Paper)
C ENT1AL
514-50
22 Aust 1950
its Vexations may lead to the implementation of this plans, *doh
wou1d1..PCMALJO YrFr301.1 raficinrcy and further the development of
ts substantial potroleuri reaou.rces. The plan represents a
new approach to the nontentiou3 subject of farcial control of
mastic induNizy- in that the Us eacpertat /,:rho in feet 11.11 ?on:trio:1
actual operation ui` Tail, win be ravssentied Lo Lilo public as only
advisors or consultants. As YPFB has experienced financial ere.
production difficulties during recent months, manarement its
operations by a US firm would contribute to the corly attni'nrc--1,
of self?aufficiuncy frnearly all petroleum
Uenefit to the DollIrban econontr?
Ce/oR: EDENTIAIs
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VItfT
3.
Approved FoSeelease 2002/6:01Wr CIA-RDP79-01044000200050034-8
2 5X1 Weekly eccitributicems.
(CIA !forking Paper)
Sitnatien Memorandum 51-50
2X6
25X6
3SONEDENTIAL.
August 1950
21kneraitm4nkitnateineati,lisedue*
Giummare The Gilves administration remains stable despite
uncertainties regarding the presentve health. The economic
situation is relatively favorable. Honduras remains singu-
larly free of communist activity. The cnrrent situation of
the military establishment is not known. Friendly relations
are maintained with neighboring countries,
-- Nothing in the current situation importantly mcdi-
fies long-standing advantrges far US security interests
deriving from Honduree thorough-going support of the US and
Hemisphere unity.)
There has been a singular lack of noteworthy political activity in
Honduras during the past eta months.
Able lace
25Xol
rreenaent eno o ale? servee as Minister of Interior and Minister of
Develepment.to
all &Reverences seems to have recovered from his pique at not
being forewarned of Calves proposed trip to the US and remains the most 25X6
salutary- and constructive influence'
Lezanotreorder discouraging political activities erior to the official
open of the 1954 genera: elections has hindered but eot eltogether estopped
the first attempts of the opposition Liberal Party to reorganize itself after
its lamentable performance in the 1948 campaign, Two new Liberal leaders.
neves and Morales, appear cepable of resuseitating the now moribund Party to
the point where it will almost assuredly be a significant nolitioal force by
1954. While Vee etete of Gilleyee health and the concomitant question of his
leaving the country create a certain degree of uncertainty4 the lack of effec-
tive oppesition to the present adminietration suggests continuing political
stability in Nonduras for at least the next six months.
;swami&
Econaeld activity remain* at e eatisfectorv level. Banana exports for
the first three months or 1950 totalled 2.6 million stems end equalled shipntfar the correeponding 1949 quarter. Overall expenditures of the remit'
coupeniee are currently. 10 lower than last year because of a 20% personnel
redaction. Thin Lenart` resulted froe the companieso completion of A post-war
eentetreetion program. end the present labor force of more than 30.000 will be
ftedettedned or slightly augmented. The fruit companies are still spending over
*5 minion quarterly in Honduras and the country hap ample dealer amtheens
tar impcat reqairements. 1949/50 coffee shipments will probably exceed hy ono.
million pounds the 8 million pounds shipped in 1944/49 and prevalline Wth
prieee will esell the income of numerous small farmers. Government revenoses,,
'ell& have shove a consistent upward trend in the past several yearelare
"dAttf..!. einenditeres by et oemfortablaemg
Approved For Release zooziudtarine
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Approved FateKelease
Weakly Contributions,
(CIA Working Paper)
Situation Memorandum 51-50
34-30
A 04000200050034-8
22 August 1950
There have teen a number of significant developments in civil aviation,
The modern national airport recently opened at Toncontin, complete with pae-
songer facilities and offices for domestic internal and international airlines
nerving Tegucigalpae will benefit the tourist industry A new domestic air
freight line? ANHSA? has been established, vith Joe Silverthorne as manager
and with the financial backing or prominent government officials. ANHSA has
received governnent assistance in various ways including a lucrative contract
for carrying Apnardiente, a liquoe produced under goverement monopolye Silver-
thorne had a hand in drafting the new aviation law, which contains provisions
decidedly adverse to the interests of the established interval airlines, TACA
and the Pan-American Airways affiliate, SAIIS.L If these provisions are strictly
enforced TACA and SAIISA, whose margin of profit is slim, might be driven out
of business, an eventuality that would impair the already inadequate transporta-
tion system of the country:,
The establishment on 1 july of a government owned Central Bank and a
Development Bank ander the auspices of the International Monetary Fend may
altimately prove an important factor in the economic development of the country,
The .Zentral Beek, which will act latige elle as the governmentlefieelal agente
exchange eontroa authority and bank supervisor, is intended to provide a more
flexible monetary eyston and to regulate the expaneion of credit, which at pres-
ent is rather unreeponeive to the need* of the country, The Development, Bank
was created as a source of credit and investment funds in areas not reached
by private, banke? moot notably in the aericultural field, and also to provide
eaxiliary servieeo each as tothniea advise and experimental stationa, The Ini-
tial capital of the Central Bank is $250,000 and that of the Develcpment Bank
$750,,000, the latter to be increased anytuany et the rate of about $700,000 from
taxa* tarmerked for the purpcee, While it is true that these institutions are
etazting out on a email cale end that initial operations will be hampered: by
the lack- of qualified personne1 and jealousies of special groure, D/LA believee
that in time they will contribute modestly and perhape &gen significantly to
nondara0 economic advancement,
ihe'Aare conereeeiunal commiseion that drafted the new bankieg legislation
1.6 aleo etudying revisiot ef the revenue system with a vice to making It mot,
prodaetive and efficient, The commisaioes studies so far have led to the levye
ieg adopts ot? Of 6,4 "memo) tax which, in the fiscal year eiosed 30 June 19509
it oltimated to have yielded $3 nillioe of additional mvcinueg at least half et
Oeich ears rk(1117 the rtuit companieta, This levy oxempte a great majority of the
pepuiThtice bat, ee experiencein gained, will probably be extended to middle end
lever Income rroup's end make poseible rrater puhAt expeaditures for teonemie
develeneeete Additional legislation is expected to eliminate at loaet some of
tht..1 incoreeiatenelee4 and overle beroentscae features of the prevent onetome
tier( eyeteeo ahiob hinder trade end, In eertein instances., hsve even resulted in
r..1?"itOoldient teetut:13
,-R19,i4MOS
Lati,TIS ettrularly E1 6 of cc:limo:0st tvfty. The tray crn
t .19.ntoirt i thf.4
6 ercop oi a ?Y9-9 WonittlY
enartM7,7"?
COEE1774T-MTIAL
A
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Approved Fohkilease 200?.
gatia000200050034-8
Meekly Coirtalbations 34'.50 22 Auguat 1950
(CIA Marking Paper)
Situation Memorandum 51-50
banana region The PDRH has printed numercas attacks on the fruit companies
with funds and propaganda from Guatemala and Mario*. /t is also believed to
have directed acts of minor sabotage against fruit company properties. This
agitation has stirred some unrest among the workers, and it appears likely
that the government will not tolerate these disruptive activities much longer.
Kilt=
Since the withdrawal of the resident US Army Attache last year, no signi-
ficant developmenta affecting the military establishment have been reported.
Iminciatitscia
Honduram continues at least superficially, cordial relations with its
neighbors and is following the US lead in moat international matters. Relations
with Guatemala, which were aomething less than friendly around the turn of
the year because of the alleged mintreatment of the Honduran reotball team
in Guatemala, have recently Improved. This improvement is attributable at
least in pert to Guatemalaus co-operation in disbanding a small group of armed
Honduran dissidents operating along the border and the exceptional. virtuosity
of the Guatemalan national symphony which had bead sent to play at the opening
or the Honduran Central and Development Banks (see Lagnamio. Hondurae recog-
nised Viet Nam shortly after the US did so, baa' ratified the charter of the
Organisation of the American. States and has indicated its approval of the
US-UN potation on Korea. The US le assured of the continuing cooperation
of the government and a preat majority of Hondurans in rest international
wafters.
oporaiarrSONFE ENTIAL
6,
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Approved FOIP?Aelease 2002/08/2gEd*RDP79-010$4000200050034-8
CONFODENTIAL
25X1 Weekly Coabributions 34-50 22 August 1950
(CIA Working Paper)
Situation Memorandum 52-50
2212.2madfaitiatiminJitgoulitta
Gum= -- Improvement in government stability continues. The
economic situation continuos to be unfavorable. The Government's
anti-Communist campaign has been intensified. The Rio Treaty was
ratified but popular opposition will preclude the sending of
Argentine troops to Korea.
.... US security interests are favored by ratification of
the Rio Treaty and by continuing improvement in stability, but
are unfavorably affected by Argentina'e reaction to the Korean
crisis Which occasions considerable doubt as to the availability
of Argentine military support in the future.)
22=26,1
The moderate improvement in government stability Wkly., 23 May 50) 25X1
has continued as the Korean crisis has led to antieipalzLon of betterment in
the economic situation through expansion of exports, and as the administration
position has improved in relation to labor and the opposition. Althoudh
Perte's apparent retreat on the question of aid to Korea (see Internaticeal)
demonstrated some limitation an his ability to lead the Argentine nation,
his prompt return to the *Third Pteition" appears to have reunited his sup-
port. During recent menthe the government also improved its inmediate position
by ending the oted portworkers strike which had posed a threat to economic
255(1 recovery (see Wkly., 25 Jul 50). It also succeeded in maintaining a
relatively 1 enee of strikes but only at the cost at substantially larger
increases in wages whirl can be expected to add to inflationary pressures.
There are indications that the Communists may signifimult4 aggravate this
problem of the wage spiral (W30 Subversive). The Peronista campaign to elimi-
nate the Radical opposition party was furthered by the resignation of half of
the Radical deputies in protest against the Peran 1949 revision of the Consti-
tution and by a cleavage in Radical ranks on the issue of ratification of the
25X1 Rio Peat. _lestimatee that during the next three months the Perfin adminis-
tration eill-afitinue to strenghten its position by capitalizing on growing
optimism regarding prospects for economic improvement and by further developing
its corporate-state-type organisation of the Argentine society Wkly., 27 Jun 50).
Asaiaaga -25X1
The economic situation remains unfavorable despite an increase in exports
and despite favorable developments in Argentines international economic
relations.
Among these favorable developments is an improvement in Argentina's bar-
gaining position stemming from more competitive price policies and increased
efforts to revitalize trade and financial relations with other countries. The
honeymoon in WS-Argentine economic relations continued with discussions under-
way relating to the use of the DxiMbank loan, with an agreement for reciprocal
Approved For Release 2002/08/
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BNITIAL
Approved FoSwielease 2002/6
00200050034-8
Weekly Con.tributions,
(Cm Working Paper)
Situation Memorandum
34010
- 2
22 August 3.950
52-50
exemption of income tax on transportation companies, and with the importation
into Argentina of dollar oil under the oneeyear agreements negotiated in anti-
cipation of the loan. Negotiations with Ilestern European countries offer
prospects for improvement ix:Argentines trade and financial position. An
agreement with Western Germany for the exchange of agricultural products for
machinery and manufactured goods (US$124 million each way) arranges for trade
that should prove highly beneficial to the Argentine (montage Anew trade
agreement with Switserlaed includes provision for resumption of financial
transfers and may net a precedent for agreements that Argentina is negotiating
with other countries includiee France, Belgium, Italy, and Sweden. Although
negotiations with the above degenerated to a stalemate over a new meat price
and meat shipments have been suspended, this impasse largely reflects an im-
provement inkeentinestergaining position (See Wkly., 18 Jul 50)0
However, these favcrabae developments have not been sufficient to counter-
act the fundamental disequilibrium in the economy. Inflatioutryeeessures
persist with monetary expansion continuing, goods in short supply, renewal
of wage increases and relatively low levels of productivity. Furthermore,
an anticipated increase of 26 percent in federal expenditures for 1951, as
? well as an indicated liberalization of private credit -- particularly to agri-
culture ?will further the course of inflation in the short run.
Although certain benefits should result from continued government's efforts
toward economic reform and toward improved economic relations with other coun-
tries, no fundanental change in the unfavorable economic situation can be ex-
pected during the next fox months.
Recent statements bytes Argentine Meister of Defenae and the Chief or
Staff or Coordination for the Armed Forces indicate that the armed forces
supported and approved action taken by Per6n in recommending ratification of
the Rio Treaty and in issuing instructions to the Argentine UN representative
to approve the action of the US in Korea. Support of the US position on this
issue is in line with other evidence of a continuing favorable disposition of
the Argentine Armed Forces toward the US. This evidence includes: expressions
by defense leaders of a desire to adjust to Nemesphere plans for military co-
operation- reorganization of the top command along lines of the LS unification
plan; purchases -- actual and requested of US equipment; and visits of high
defense officials to the US. Though technical reorientation of the Argentine
army in the direction of US doctrines and equipment has only begun, it is pre,-
able that the Argentine arey, excluding certain extreme nationalist army ele-
ments, would favor alignment with the US in the event of US-USSR hostilities.
AwinMize
Although a bill to outlaw the Communist Party was withdrawn, evidently
in deference to Third Position policy, the Perim administration noticeably
intensified its campaign against Communist activity. Police cracked down on
numerous demonstrations against Argentine participation in Korea; Police
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25X6
Paper)
Jembranclun 52-50
,Chief Bal4c110 pub
1
"Peace" titions:
ki le Cciriun.tst have uccoedoc1 .,,. le ?uie
of loyalPeronistast in attaining second level leadershin in severcl CCT
Unionst lnd have effectively' provniled on the rank an file to roapond to a
tochniquO called "Per6n plus one" Win thi; CCT union demands a ten poso in-
crease in wages the Corrunists demand eleven),
AdMIN4gana
ThelmW1catiort.(tf.the Rio Treaty on 28 June by the Argentine Charbor
Of Deputies is the 'rept important Argentine contribution to Reratthere 6611--
deritY World,Rar.II) but "grass roote reaction to the Kerehn crisis
$11 pr Prcrvnnt direct rilitary support of the MI action; Although
the:admi istration early intiOated that troops it be sent to Korea it
loon ed, to retreat to a Third Position stone. In which "the 'people will
decIdo Tho vigor of the !!ifir-orse reaction amengrConmuniata,
ieclati stl and :Peronistas as well, whiCh led the admini,.tratien to re-'
treat, fMicated th,A Parent's, incessant .pronaganda nrPeals to iSoletiontst
sentimont MS nurtured public attitudes whinti w171 mho it varr qifficuA,
tor thegovom#ent to onvlo7 Military forces internntionally rfLArgsntime
Oecarit4is, alatta7ivolvr Per6ole rival of the ABC (.Arp.entina, T3ra/"Ili
Chile) lace there in th cmtckt of izzion to -r,sist foreign impOrilism: n%
Well as 'tile condoning Of the Peron&zto. lntcrvention for thi; Wrgos
candidac''y in ?Brtail, avidenced a nevra'osertim,a sS'in'internationnl r,_jation0
,after a onsiaerablo poried of rolative quiescence,* It is quite likely t'na?
this 'increased activity in rel./Aim to neighboring countries'iS eVidenee ;UhrA
Per& considers this period when world hostilities ro e IMIminent -- a
rood one' in *hich to 147 the gromnaeor for to artension of Arl'Ontino
influenCe.
CONFIDENTIAL
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