WEEKLY CONTRIBUTIONS 36-50;(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050036-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 12, 2016
• Document Release Date: August 20, 2002
• Sequence Number: 36
• Publication Date: September 5, 1950
• Content Type: PERRPT

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COINFIDENTIAL,
Weekly Contributions 36-50
5 SepteMber 1950
L.
Of the developments reported this week, D/LA finris of particular
interest that regarding attempts by Mexican Communists to obtain manage-
ment positions in the oil industry (p. 2),
CURRENT BEVEL?
11101
GENERAL: The ratification of the Rio treaty by Bolivia now leaves only
three Latin American countries which have not yet ratified that treaty
(pc, 2),
674
CEN1RAL AREA: In Ecuador, the lack of effective counter-propaganda has
increased the success cf the Communist "peace" campaign (pc, 3)
SOU
104 4
AREA: Bolivia's government is beset by internal dissension (p, 3).
SPECIAL SUBJECTS
The Current Situation in 0uatema1a
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2 S
DOCUr,AfINT NO.
NO CHANGE IN AY=
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CLASS'. CHANGED Tn.
NF.:X r RL---?,!;FNV DATE'
AUTH:JAHR
(16,-rEt. IEVIEWER:
4
State Dept. review completed
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Weekly Contributions,
(CIA Working Paper)
CONFIDENTIAL
36-50 5 September 1950
le Ls Bolivia Ratifies Rio Trea
M-r--ore-ar?E?scr c astened ratification of the Rio
25X1 treaty by Argentina r iZ7Wkly, 5 Jul 50) has apparently stimulated
similar action by Bo --- the Bolivian Congress having ratified
the treaty on 24 August, All of the three Latin American countries
which have not ratified this treaty are expected to do so soon;
Ecuador and Guatemala uill probably- take action during the current
sessions of their con&msses? and Peru also my act soon now that
Odria is 0legal4 elector' president.
Di 'De
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4. NICARAGUA: Unfavorable Reaction to US Senate Lbve
lc a c as ve-re?en-vexed by the US
Senate action eliminating from the Federal Aid Road Bill an appropri-
ation to permit completion of the Rama Road --- a highway connecting
the Nicaraguan -western highland area and its road network with a
potential Atlantic port for shallow draft ocean vessels. President
Somoza regards continued US support for the road as a contractual
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CONFIDENTIAL
Weekly Contributions,
(OIA Working Paper)
5.1
36-50 5 September 1950
obligation based on an alleged personal agreement with President
Franklin. D. Roosevelt; other officials considered failure to grant
aid at this time a "direct slap" at Nicaragua, which has generally
(as in the Korean natter) offered prompt and wholehearted support
to the US,
Although the Senate's action has eliminated a potential
source of dollar exchange and will delay the development of a pos-
sible Atlantic outlet for coffee shipments, it probably has not
injured US military or commercial interests nor will it prevent
future cooperation between the two countries on matters of mutual
concern,
ECUADOR: Lack of Effective Counter-Amanda Increases Success of.
cess 0?the Committee for Peace in collecting sigea-
tures for the Stockholm peace petition seems to have been due mainly
to the fact that the signers are unaware of its Communist origins
and implications, since most of the signers are persons who would
under no circumstances back a Communist move. The 18,000 signatures
already collected in Ecuador include, for example, those of government
officials, political party leaders, and even members of the Catholic
clergy, Iamong the people signing are five
cabinet ministers and Ruperto Alarcon, Director-General of the Con-
servative Party and newly elected President of the Chamber of Deputies,
the Committee for Peace will seek presentation
of the petition in congress for legislative approval, Unless an
effective counter-propaganda canpaign is initiated soon, there is
a chance (even though congress is presently seriously considering a
bill outlawing the Communist Party) that the petition might actually
be approved' ' Such a development would
decidedly improve the morale of local Communist Party leaders and
would furnish further grist for the Communist propaganda mille
6. BOLIVIA: Res Jams Almy_RhAef of Staff and National Police
Director
TW-Wi-failations of Army Chief of Staff Rios Rosel and
National Police Director Vincentil Who have been engaged in a strug-
gle for power, highlights the current lack of solidarity within the
army and within the goverment 1-71.atly3 18 Jill 50). /hile intra
t -
governmental squabbles are not new o Bolivia, the continuance of
severe dissension within the army and within the administration at
a time when student and labor unrest has reached serious proportions
makes the government extremely vulnerable to subversive activities
of various opposition Laaeups,
CONFIDENTIAL
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Weekly Contributions, 36-50
(CIA Working Paper)
Situation Memorandum 94-50
5 September 1950
The Current Situation in Guatemala
(S -- The presidential canpaign is now lindted to a
c?testwithin the preadministration ranks, with Arbenz
remaining the strongest candidate, The economic situation
is satisfactory, Communists have lost influence, have .
emerged into the open, and may face increasing opposition,
Strengthening of the armed forces will counteract radical
leftist strength. In international affairs, Guatemala is
seeking to align itself with the US.
? Loss of Communist influence, strengthening of
the military* support of the US in international affairs,
and the possibility that presidential candidates mill be
desirous of obtaining moderato or conservative votes all
favor US security interests?)
Political
Current political developments are conditioned by- the approaching
November presidential elections. Suppression of anti-administration ele-
nents following recent disturbances has reduced the campaign to a contest
between pro-administration (nArevali:taft) candidates only. General
Ydigoras Fuentes and Colonel Miguel Mendoza both opposition candidates,
are now in hiding and the National Electoral. Beard has taken steps to
cancel the registration of five opposition parties.
Although Lt. Col. Arbenz? candidate of the leftist Partldo Acci6n
Revolucioniria, remains the strongest contender for the presidency, he
faces certain unfavorable developments in his campaign, For example, the
more moderate Arevnlista candidates (Giordani and Garda Grenades) are now
in a position to Obtain anti-Arbenz opposition votes viiichwoe1d have gone
to Ydigoras Fuentes or Mendoza; also same of the militant labor groupe
supporting: Arbenz have been partial]; disarmed, and possible internal cis-
unity may reduce labors political importance. It is quite possible,
moreover, that the congressional appointment to the three-man National
Electoral Board will give the balance of power to an antieArbenz majority.
Finally, efforts to strengthen the armed forces1--lilk3,y, 29 Aug 50)
suggest that the administration is seeking to counteract, or neutralize,
the strength of the militant leftist groups to which Arbenz still looks
for support,
Although recent political developments have eliminated the conserva-
tive opposition candidates from the presidential race, it is believed that
they have also moakened the influence and capabilities of the radical
leftists, whose candidate is Lt. Col? Arbenz? The moderate Arevalista
candidates however, are in a position to min support --- a developrErt
which would favor US interests, It is also possible that Arbenz may repudi--
ate his leftist supporters in a bid for more moderate or conservative oupport,
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CONFIDENTIAL
Weekly Contributions, 360-50 - 2 - 5 September. 3950
!)IA Working Paper)
Situation Memorandum 54-50
2conomde
lgiCent months have seen a rather satisfactory level of economic
activity, an absence of serious labor trouble, and relatively few evi-
dences of serious governmental financial difficulties, It is now clear
that the 1949'50 coffee crop suffered very little damage from the highly
publicized storms of October 1q49, The main corn crop, now being har-
vested, is larger than usual, Although it is true that banana exports
are dean considerably over last year, the projected shut-dawn of the
United Fruit Compapygs Atlantic Coast plantations was not carried out2.
a collective labor contract with the local union has been signed, and
the company has withdrawn its petition for permission to discharge 1509
workers --- an action which would have had serious local econorde reper-
cussions, Prospects in the chicle industry have improved since the
Wrigley Company has agreed to buy all accumulated chicle stocks,
No serious labor troubles have developed in recent months., Remover,
tha3 gavernmentgs arbitrary attitude towards business -- whether US or
GuatemalTn owned ? has again been demonstrated in its threat (not yet
carried out) to levy Linos on all businesses which refused to remain ceen
during recent street disturbances,
There have been few evidences of serious financial difficulties ie
recent months, although foreign exchange reserves continue to drop. The
government budget for 1950-51 assumes increased governmental revenues and
allows for generally increased expenditures compared to those planned in
the original 1949 budget,
Settlement of the United Fruit labor contract, the revival of the
chicle trade, the relative absence of labor disputes, and the rather satis-
factory level of economic activity tend to favor US interests_
Subversive
--/EWcent months, Communists have lost SOMO of their influence in
politics, have had their labor leadership challenged, and have possibly
been deprimed of some of their weapons.. In response to growing anti-
Communist sentiment, they have adopted a strategy of consolidating their
forces, of dispensing with camouflage, and emphasizing their identification
with the international Communist line,
jn June, a number of Communists resigned from the leftist Partido
Acoion Revolucionaria (PAR) and quickly formed an overt, indubitably Com-
munist, party of their own --- the Particle Revolucionarto de Obreros
Guatemaltecos, Soon after, Communist intellectuals began publication of
OctuhrA, a Communist nemspaper complete with red ink and hammer and sickle
raeted to publicizing the Stockholm petition, atilacking the nTrunau
Plan" (Point IV), and otherwise presenting the Corannist line?, Immediately
following the publication of Octubre? three members of its staff lost
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C14 ERITIAL
Weekly Contribution.%
(CM Working, Paper)
Situation Memorandum 514-50
36e50
- 3 -
5 September 1..50
influential governmental positions a Alfredo Guerra Borges was discharced
as editor of the official Diaro de Centro America, Mario Silva Jona= ells
discharged as propaganda cENT-72-trg governmea radio station, and Jose
Manuel Forturry was unseated as a member of the National Electoral Boaree
Octubre itself, though not suppressed? has suspended publication indefi-
ilitZ7becease of general restrictions on the press instituted during
the recent disturbances, In laboro Communists have not been forced out
of their positions of leadership in the two strongest unions, the Con-
tederaci6n de Trabajadores de Guatemala (CTG) and the Federaci6e Sindio al
de Guatemala (FSG),. The PAR (Arbenag political party) as backing a nev
agricultural labor union in competition with the CTG? and the government
has seized erne belonang to the CTG and the 1SG, libmover, although
Communist-directed labor groups were allowed to demonstrate thelr support
of the government during the recent disturbancee, there is eamc evidence
that they were restrained from violence after their initial encounter
with the opposition and that a Comunist-led labor rally was fired on by
both police and well-armed civilians,
Although at the moment the Communists continue to be aligned withs
and accepted by, the strongest presidential candidate (Col, Arbenz)i further
developments adverse to their interests may be expected becauee of the grow-
ing opposition,
Mill
After a long period of administrative neglect, during which the morale
and equipment of the armed forces have deteriorated? these services have
suddenly entered into negotiations for the purchase of arms Wk1,1r
29 Aug 50), The general availability of funds and the emphasis an immdiate
delivery suggest that the armed forces have the backing of President Ar4valo
and are preparing to take a more active role in national affaire, It is not
clear 'whether strengthening of the armed forces will or will not benefit
Lt, Cole Arbenz in his presidential campaign. However, it is believed that
a strengthened army and air force 'All tend to counteract the strength of
radical leftist elements in Guatemala and will, in this way, benefit US
security interests,
International
---r?Zecea-developments suggest a desire on the part of the Geatemalan
government to align itself with the US in international affa5.1:11,. though it
continues to repudiate governments founded upon military force, During
Assistant Secretary of State Millers visit to Guatemala, President Arevalo
assured him of Guateraala's support of the US and its willingness and ability
to purge the Communists in event of a crisis The Guatemalan gkereemment
ortildally alpyx)rtoo the UN decision an Korea and later instructed Army Chief
Paz lejada to discuss with the US the possibility of direct GuatemaItn aid,
The administration has also urged the prompt corwessional ratification of
the Rio treaty, and has defended the treaty against Ceramist attacks.
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25X1 Weekly Contributions, 36-50 - 4 ? 5 September 1950
(CIA Working Paper)
Situation Memorandum 54-50
Finally, the recent appointment of Ricardo Castaneda Paganini as UN dele-
gate suggests a pro-US policy.
The government continues to be opposed to military dictatorships,
though it has apparently ceased indirect aid to Caribbean revolutionaries.
It has continued to repudiate Franco Spain, and has recently cooperated
with the International Refugee Organization by authorizing the entry for
permanent residence of sixty Spanish Republican refugees. In a move as
much political as economic, a 100 percent surcharge was recently placed
on imports from certain countries (Nationalist China, Spain, the Dominican
Republic, and Peru) which have military governments. A developing toler-
ance, however, may be indicated by the government ss decision to send a
delegation to the inauguration of conservative president-elect Gomez of
ColoMbia.
ONFPDENTIAL
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