WEEKLY CONTRIBUTIONS LATIN AMERICA BRANCH, ORE, CIA 24 MAY 1949

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200020008-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: December 15, 2016
• Document Release Date: May 17, 2004
• Sequence Number: 8
• Publication Date: May 24, 1949
• Content Type: SUMMARY

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CONFIDENTIAL
Xeek3y Contributions
Latin am.c a } anc , ,, CIA
24 may 1919
Two items have. been selected this week by D/LA. as being of particular
interests that on the US Stake in the Ufc Argontine meat-purchase negotia-
tiors (p. 3),, and the item on Colombia's tense re-eleotion situation (p. 2).
CURRENT DEVELOPIt IM
NORTHERN DIVISION: Cuba a s recent sugar sales have improved that country's
relations with the US and have strengthened the government (p, 2).
CENTRAL DIVISION: Colombia t a goveramsnt is expected to survive the cabinet
crisis (p., 2),
SOUTHERN DIVISIDI3z 13oliviats govemment has been strengthened slightly
since acting President Urriolagoitia assumed office (p. 2). Peru's OdrIa
regime has become more stable with the departure of two influential cabinet
members (p. 3). Renewed diplomatic relations between Paraguay and Uruguay
contribute to Hemisphere solidarity (p. 3). The US has an important stake
in Argentine-UK meat-purchase negotiations (p, 3).
SPECIAL S Uf.3JEC TS
The Current Situation in Costa Rica . , . . . . . . .. ; . . . . 6
DOCUMENT NO,
NO CHANGE IN CLASS.
1 ' DECLASSIFIED
C'LAS3 CHANGED TO: T5 S G/If
N;_XT i" VH?w DATE:
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LATE, `
r; ''1C'vti'EF?;
STATE review(s) completed.
0s"% 0 VI- T AL
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Weekly Contributions, B/LA
(CIA Working Paper)
214 may 1949
CUBA: The sale of 950000 long-tons of sugar to the US-and Great
n os Cuban morale last wee ns now feel
fairly sure that most of the undesignated portion of the 1949 crop
(about one million tons) will be sold, and believe that economic
depression will, as a consequence, be postponed for at least ano-
ther year. Previously there had been w1despread pessimism over the
economic outlook --? despite the advice of some economists that
potential world demand for sugar is almost unlimited and could conceivably grow large enough to stabilize Cuban sales at a high
level -- and it was feared that the 1949 a ar ere would substarr-
tiafy exceed demand on the world market 25X1
'kith consequent impairment of Cuban nations come. Now, however,
it appears that the carryover at the end of this year may not gyrea -
ly exceed the normal figure of about 500,000 toms. The assurance
that this year's crop will be sold will improve the relations be-
tween the US and Cuba and strengthen the governmont's hand at home.
2. COLOMBIA: Government exrected to survive cabinet crisis
Conservatives and military o icers rep.aceci Liberal,
Party members in Colombia's cabinet on 22,Uay, marking the end of
Colombia's 13-month-old 'rational. Union (a modus vivendi. by which
the majority Liberal Party was included in the Ospina government).
Despite a Liberal Party threat to call a general strike, President
Ospina accepted the Liberals' resignation rather than accede to
the demand that he replace two Conservative governors with military
officers and take certain other steps to assure electoral guarantees
prior to the 5 June congressional elections. In the face of the
President's determination, the Liberal Party directorate has not
fulfilled its threat of a general strike, but, on the contrary,
has appealed to Liberal Party members to avoid provocation and to
continue organizing for the coming election. It is unlikely, how-
ever, that the directorate's appeal will be entirely successful
in checking violence by Liberal groups. The government, prompted
by sporadic violence in recent months, had already taken security
precautions, and has now alerted the police and the army.
It is expected that sporadic. violence will continue,
but that it will not reach the proportions of a civil war,
BOLIVIA: The she Bolivian Government halm been strengthened
STIRMly by acting Presi n r o go a since a as--
su ed office. is forceful attitude and his policy of close con-
sultation ,wwith army leaders have combined to strengthen the regime
despite his failure to persuade other political parties to join
with the government PUSIZ party in the formation of a new cabinet.
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The ari r has stated that it has had "onou h of disorder" aril that it
favors the control or deportation of agitators who plan to weaken
the administration by the continuous provocation of civil disturb-
ances Consultation with araw leaders
-- a policy seldom followed sident %lertzor -- have the
further effect of stiffening the government's attitude against
the opposition :2Jr'- and Flit parties, Inasmuch as the s :ibvcreive
MR and PIP groups are the principal theat to lolivian stability,
strong amity support of the admdnistration - if it is continued
-constitutes a real gain regardless of failure to establish
harmony among the liberal political parties.
POW: The Odra rerine has robab wined in stability as a result
o e departure to e for rte ica trey .Went of Lt.
Colonel Llosa, :sinister of Dovelopment. Llosa's relations with
Odrta -- never very cordial -- had reportedly deteriorated la';ely.
Since both Llosa and the sinister of .arine, Saldtas, had been ur.,
ins the ::olding of elections at an early date, Odr .a may have found
their "state of health" a convenient reason for s,.:n;;eatin their
departure Odria's control over the
junta - - g ss over se coin ry - will . increased irf the ana absence from that body of these influential opponents -4-- _::ven
thou jr it should prove to be no rxrre than a terrorary absence. ''o-
lations with '3olivia should also improve because Ilona had been acr-
cured of aiding Bolivian revolutionaries and his departure should
allay Bolivia's fears as to repetition of such acts.
I'At,AG';AY-UrMGUAY: "enerral of dil,lomatic relations bet-voon -aral-.
and 7rut7aaI~ mares a gain or ! 3 In-tere in
Hemisphere solidarity., and relieves the nearly two-year period of
strain between the two countries. Tension arose in 3.417 i.t-.rin,' the
i-araLuayan civil war, when the 7:.or1fii ;o -overnrant accused the r*
gusyan Goverrm nt of sending arms and araaunition co the rebels,
Despite Uruguayran denials (riade sonevr3iat ludicrous by the crash of a
plane loaded frith guns and ammunition), broth countries v.lthdro'
their diplomatic representatives. It was not until tiro,7uay 1 s recent
overture toward the .'olas --overnnrnt that a reconciliation use ef-
fected. Diplomats will be ' asst _-ned in the near future,
6. Ar'4G ITIiit: US stake in An tine trade negotiations with ZK
Th" v ew of the lea importance to the i as , the
Argentines,, and the US of current ne *otiations on the krf-pntineoUK
meat-purchase agreement, the US :imbassy in luenos ;'.ires has urged
that the Department of State discuss with l.?ondon the ir.'ortance of
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24 ::ay 1 J49
agreeing on a price sufficient to corner the cost of prodfuctio... Dis-
agreement over prices has been prolonging the nee. otiations; thus far,
the best 1tritish offer is still below the lh,ltisti estivate of
ter :xw
tina's cost of production. A projected higher offer by the ;ritist
is tied to conditions that would be disidvarntareous to 'S bus::noss
and contravene l) principles. Argentine accef tance of lot r-tharl-
cost-of-production offers would in aair US interests and US-Argentine
relations,
Thus far the best iritisl offer is l;~,2 cents a poured
based on the t?ritishh, ostim to of cost of production at 16.. cents a
pound. The '3ritish contend that the Argentines shcf,Ad offset the
price difference by 'i.tain a preferential excl:an -ee rate,
Argentina is askin_ 21.2 cczrts a pound based or the packers { (t-it,isl:,
US, and Argentine) estimate of cost of production of 1 cents a po ids
and pointedly adds that pounds sterlin- can be . bought at as ra cti of a
discount as pesos in the black mat: ket.
The British -mbassy in `. ;Ashin~.,ton has informed the ;)e part-
meet of State that the UK intends to offer 17,? cents a pound proviied
that Argentina wets the followinU conditions: (1) AO percent ^:' all
UK exports to Argentina will be nonessentials; c2) there will be r,i
dollar payments; (x) there will be no [-old guarantee for any favorable
balances of payments; (fit) the Ulf vrill receive better` than most-
favored-nation treatment in exchange rates. The fourth cond3.ti -)r would
give Britain price advantage over US and other foreij;n coral oti ;ors in
the Argentine rearket during the proposed 5-year period of balanced
trade, and it is similar to the An lo-Argentine trade agreements of
the '30's that res,ated in diversion of forcer Z trade with Argentina
to the UK,- Loreover, better than roost-favored-nation treatment of d
contravene ITC principles.
Argentine acceptance of prices lower than cost of rx,1-, x-
tion would impair certain US interests and would probably have =favor-
able repercussions on US-Argentine relati ores, 11thoutrh it is '3.
policy to support the British economy, for political and strate,-ic
Sea )ns, it is also to the US interest to have the i rgentine cleat in-
dustry flourish. ,at is still in short supply., and,a further decline
in Argentine production cannot be offset irmediateiy t: increased pro-
duction eleev4wre because of the time req-:ired for s' cb dovelot :,-Tenet.
Higher prices will have to be paid to the producers to halt the decline
in livestock production and also to the frirorff'icos vrhich have threat-
ened to close because of large los:aes, Failure ..o cover such costs
will increase ex? sting instability beta*use cf the necessity of subsi-
dising the eat industry,, usually a principal source of incone, C'on-
comitantly, US packers' dopendence for continued operation, on Argentine
government relief would be a source of possible friction in USII-
Argentine relations. Furthermore, if the Argentine Uovernxnent feels
that it is forced -to accept an insufficient Dritish offers, it will
blame the US; it will point, to US sales of pork to the ',-.K during the
negotiations as evidence of US backing the -.tish position, and it
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'fill renew charges of ?cA discr .ninatio : s;.ich as those which atterr]ed
TA authorization of 'ritish dollar purch,aabs of bacon from Canada at
huller than Ar6ye-11tine prices.
resurgence of anti-L'S feelin j would. probably undermine
the present joint J rgentine VS efforts to inprovo trade and financial
relations between these tyro \oourtries and cause ! rrentina to revert
to a policy of seekin : to displace L3 leadership in latin America,
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Situation '.,emc~rand= 31-49
The Current
21i ---,AY 1949
ituation in Costa is ca
{Sums ra US sec~urity interests are riot involved in the
Pre Gen ;`late politz.ral rivalry trace both are
pro-tJS. Communism remains of tainor importance, A
3l ghtly favorable shift in the country's term.-4 of trade
is anticipated, ":'tie rii.l.itary aitzztiun is confused. Me
Country 'a foreign policy continues to be pro-:S and anti-
USSR, There has been a tendency toward lessen -A partici-
pation in Central American larihban power ?'.,ul:ance r:iva riea,
The current.situation in ^ tai ':ica has developed as redi
tPd
UNUOTIO ae. 51s: re u,ctance to assume official responsibilities. I'_e still
prefers to miti;lato the more radical of Junta hief i~'i,"uores' mea-urea by
innuendo and political maneuver, ;te has also declined to participate in
revolutionary conspiracies against the junta, .hen 'inister of ut,11e,. See-
urity Card9na led an abortive revolt and demanded the disnissal of the
Junta's more radical ministers and a,reversal o+~ its economic policies
both of which demands had the support of the najortty of ''fate's followers
the latter refused to join the revolt and remained loyal to Zit..-ueres,
:;ore recently, when the Constituent +,:ser rly rejected a i i.,-ueres--a~ponsored
new constitution and voted for an iC71 -nodel advocated b Llate, ~'i;~zeres
resigned as Provisional Preesidont. 'ut late, as presider;t--elect;, refused
to ass:;me office himself, Instil., he prr; ised 'i, aeres to make us fol-
lowers In the Assembly assume a more-, cooperative atr,ttudc if the latter
would remain in office until _'ovember. .vent- lly, of cou?sc., the iss' s
between the two will have to oe taken to the pulls. In s:.ch an ever t,
security interests will in no way be involved. lint" H'1_,?-.;eres and late
are pr ow t'$
s
'resident--elect Ctilio ~,`l.ate has a-ain
Cc tun our remains of minor icm>ortance, The cf-
(ice, outlawed the vomr?un st. Va. ""uardia Fonular ex.jled its hiders and
disrupted its internal organization -el"Z7%;ardta hewover, still dis?-
tributes propaganda olandectineLy, Its pub ice*iori, :rab, o reveals a
schism between present leaders and : arruel . era, its exiled ch icf -vho is
berated for seeking publicity rithaA previousl;.,? cors.;ltin ~ the party's
political bureau. Apparently in an effort to ;tee the Jan uardia more
popular among those circles that wo'.1d normally be tic ar .es? rc'.cvod
from it in an ideolo is sense, 'TraaDa jo__ i s att