WEEKLY CONTRIBUTIONS LATIN AMERICA BRANCH, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200020004-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 16, 2016
• Document Release Date: October 1, 2004
• Sequence Number: 4
• Publication Date: April 26, 1949
• Content Type: SUMMARY

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Latin America Branch, OPE, CIA
26 April 1949
13/IA finds, among the developments reported on this week, that the
situation in Argentina (P. 4 pa
) is of rticular interest as the Peron
government is threatened by disaffection in labor and in the army as
well; the alienation of eithez? group would seriously threaten the
regimes tenure.
CURRENT DEVELOPZENTS
GENERAL: Sabotage is reported a possibility in the Caribbean oil area
for late April (p. 2.a)
NORTHERN DIVISION: In Costa Rica a political crisis was peacefully re-
solved by a compromise between Ulate and Figueres (p. 2.b). Nicaragua's
serious economic problems could very nell develop into a threat to the
Somoza regime in a matter of months (p. 2.b). Panama's Blaz government
has successfully thwarted another revolutionary attempt (p. 3).
SOUTHERN DIVISIC:: Peru's Odra government has announced the discovery
of a revolutionary plot, and has declared a state of siege (p. 3).
In 3oliviap the none-too-stable Hertzog 7overnment is threatened bk
politically inspired labor troubles (p. 4). In Argentina the stability
of the government is threatened by economic dislocations (p.4).
SPECIAL SUBJECTS
The Current Situation in the British '::est Indies 6
The Current Situation in French Guiana
State Department, NAVY reviews completed
CONFII_DENTIAL
DOCUMENT NO.
NO CHANGE IN CLTi
f DECLASSIFIED
CLASS. CHANGED TO: TS
NEXT HEV/EW DATE:
AUTI-11:AHT-1)-37
DAId REVIEWER:
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Thnkly Contributions, 26 April 1949
(CIA Working Paper)
GENERAL: ?abotamilpossible.in_tho Caribbeap oil-producing areti.
The US Naval ikso at 731t.iii320-Tas been iniormed
25X1
that nintensified Comreturdst ac
Is planned for the Caribbean ,Area the latter part of April%
cording to NOB Trinidad, local security officials anticipate
"small-scale" demonstrations on I May in the oil- and cane-field
areas but believe they can bo controlled.
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Weekly Contributions fl/LA 26 April 1949
(CIA Working Paper
1. COSTA RICA: Political Crisis Peacefullpolved.
A paRnararsis was prealdaTiranast week when
the Constituent Assembly voted to base the new constitution on
that of 1871 and to reject a proposed constitution of Provisional
President Figueres. The junta's constitution included many new
theories that the Assembly found objectionable, Subsequently,
President Figueres submitted his resignation and "sought" to turn
over the government to President-elect tilate whose conservative
supporters he apparently felt responsible for the Assembly vote,
After a series of meetings between Ulate and Figueres, however,
a compromise was found, Figueres' resignation has been withdrawn
until 8 flovember. Ulate's succession has been "guaranteed"
through the appointment of a supporter as rinister of Public Sec-
surity, The Unister of F.conony, whose policies have been bitter-
ly opposed by conservatives, will probably rosin shortly,
Issues in dispute between Ulate and Figueros will
presumably be taken before the public during congressional elec-
tions scheduled to be held before Ulate takes office. eanwhile,
Ulate will endeavor to persuade his followers in the Assembly to
be more cooperative toward Figueres.
!3/LA estimates that US security interests are not
involved in the present difficulties, The principal contenders
on both sides are pro-US.
2. NICATAG7A: The Future Dimly Seen.
Falling sesame prices combined with a very poor cof-
fee harvest are hastening A.caragua's progress toward insolvency
and possible revolution. Private dollar commitments (as indicated
by approved import permits) have apparently been made in excess
of disposable private dollar reserves, Government disposable
dollar holdings were exhausted in 194C,
Since the country's dollar holdines can only be par-
tially and temporarily replenished through the proceeds of this
year's diminished coffee harvest and sesame crop -- first and
second in importance to the national economy -- a general decline
in living standards seems inevitable, in the absence of US assist-
ance. This economic situation could develop into a serious
threat to the stability of the present Somoza re-ime between June
and December 1949. Such an eventuality is not regarded as a
threat to US security interests at this time.
/*,L.Z6-4141k kai
SEC iT.T 2,b
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Weekly Contributions, 2/Lk
(CIA Working Paper)
0A006,00020004-4
26 April 1949
PANAEA: Thejatest series of revolutium maneuvers in Panama
wa re daWcrirlIg" 817 of an AzrThe] oitien, an
ex-Presidont of Panama, and several oppositicnists, Arms acquired
by supporters of Arnulfo Arias in Mexico and th US last autumn,
and subsequently concealed in Costa Rica, have been drifting into
Panamm durinp; the pat. fortnight The government, apparently
fully aware of this illicit arms traffic, has "detained" several
people who? it believes, maybe illolicated? 13/LA estimates that
the successful frustration of th.it! latest revolutionary endeavor
will strengthen the position of the Diaz government. However, in
the absence of US financial aid, it is not believed that the gov-
ernment can in the long run withstand the pressures of existint.;
adverse economic conditions in the country,
5. PERU: The discovery of "an Aprist3 Elot " was announced on 23 April
IFIErW1175--037aia-h 66'i-controlled the situation
to date by the use of rigorous measures: arrests, reimposition of
a full state of siege and partial disarmin of the Callao polioe
force that lryte ft.mplIcated in the conspiracy, Althouji thn covern-
merit charges .an Aprista plot", US 7mbasey Lima sw;pects that the
real plot was within the armed forces, affecting many garrisons
and directed by non-Aprista military mon --- such as the former
Inspector General of the Army and the formor AirNinister, P/LA
concurs with libassy Lima, but believes th,lt possIble Aprista col-
laboration with rebellious rightists both within and outside the
armed forces is a continuing direr to the Peruvian Covernnent,
3.
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7ieokly Contributions, 3/LA
- (CIA Working Paper)
26 April 19/0
BOLIVLI: Continued tension at the Catavirdnes, in combination
IniVi-The possibility Mt ,;Nr, and FIR groups have formed
a united labor front and may expand labor troubles into a full-
scale revolution, indicates that the Hertzog government may still
be in a very precarious posltion. A labor ''war of nerves' --
conducted by five major agitators -- continues, because the gov-
ernment has failed in its announced intention of maintaining
order. 7:leanwhile? as a decision by the Yinistry of labor is
awaited on a petition submitted by r:t9K-affiliated unions, rumors
that wages were to be increased AO percent have caused "ntiiio
officials to state that any such increase would force them to re-
duce operations, thus cuttine down on the output of tin. Despite
elections scheduled for Lay, the present tension is propitious
for revolutionary coups which could easily take place if the "TM
and PR have really established an anti-government entente. Pres-
ent inAarmatIon, while inconclusive on this point, does indicate
that key erny figures are still loyal to the regime,
7. AT:GENT:A: Economic Difficulties Threaten Stability of Perim
TiVeY.nirWrit.
Developments in ergentina since Percin's early :.arch
showdown with the ermy (which gave him a respite from direct
military pressure) indicate that he has not been able to ease
domestic tensions -- induced by econonic dislocations -- which
threaten the continuity of his regime.
The recent violent labor outbreak in the Province of
Salta is highly indicative of the acute politico-economic problems
now harassing the Argentine Government on a national scale, An
attack by members of a Peron-domineted union on 1-eronista provin-
cial authorities in protest against a schedule of maximum prices
on basic commodities -- considered excessive by the union -- re-
sulted in approximately five deaths and thirty serious injuries.
The gravity with which the federnl government views
the problem of inflationary pressures is indicated by action taken
at the cabinet level in this inoidente Troops were dispatched to
quell the disorder; the provincial officials involved were re-
moved; and the price schedule was cancelled.
The government's settlement of the Salta dispute
by conceding labor's demands -- was consistent with the pattern of
tte Peron administration's relations with labor, a pattern which
involvee the most serious threat to the continued stability of the
regime because of its dependence on support both from labor and
from the arm, Despite the government's 'rave concern its inten-
sified eigilance, and its pnblic t.MIA probably
)4.
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Neekly Contribution s5, B/L& 26 April /9L9
(CIA Working .Paper
contributed to the poorer showing of Peronista stxYaaryth in recent
provincial elections the administration has fccnd no formula
for successfully resistirk- widespread inflationary' rage demands,
tern ls failure to arrest inflation is attributed by arv leaders
to his "indulcence" of labor and this is an importont element in
the disaffection of top army leaders and the opposition tand
recently taken by the WU, the colonels clique through which Perlin
came to pouer.
Although the admi nistration has made substantial pro-
gress during recent weeks in revising Argentinals ill-advised
postwar economic policy to alleviate the oconordc crisis -- incl\A-
ing some concessions to demands of US business on conditions for
continued operation -- it is too early for these changes to have
had significant practical effect and they ma;,-. have been tall.= to
late to avert a major political crisis,
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Weekly Contributions, BiLA
(OD Working Paper)
Situation Memorandum 234.9
00020004-4
26 April 1949
The Current Situation in the British 'Seat Indies
(Summa: The WI, because of their geographic position
as natural US defense sites, are important to US security
interests. To date Communism is not an acute problem and
the general situation is favorable to the US. Noteworthy
progress has been made, especially during the past year, to-
ward federation. Meanwhile, native leaders have won greater
local autonomy. There are no local military forces of im7
portaece? but the police are reasonably adequate. Serious
basic economic problems, however, are far from solution.)
The British West Indies (BUT) are important to US security interests
because they lie athwart the principal approaches to the Garibbean Sea.
They are natural defense sites for the Panama Canal, the Venezuelan oil
fields, the refineries at Aruba and Curaqao, and the sea routes from the
bauxite deposits in the Ouianas. The US maintains active military instal-
lations on Jamaica and Trinidad. Facilities on St. Lucia and Antigua are
in caretaker status; those in British Guiana are being deactivated. The
BWI are of secondary importance as a limited source of such raw materials
as bauxite and petroleum as well as agricultural labor.
Communism is not an acute problem in the area and the present situa-
tion is, on the wholes favorable to US security interests. The three
million natives (over 90 percent colored, exclusive of substantial orien-
tal minorities) are friendly to the US. Despite the fact that major
social dierisions follow racial lines, Communist propaanda that bids for
the support of the impoverished Negro majorities by fixing attention on
the rich whites as the direct cause of the Negro os economic ills has not
produced an anti-Western orientation among the people. Although reports
of the subordination of the US Negro tend to undermine a basically pro-
US attitudes for the most part this occurs only to the extent of confirme
ing the loyalty of the populace to the Oritish Crown. The Negroes are not
attracted by the Soviet philosophy of racial equality and an egalitarian
distribution of wealth at the expense of the mbites, as they have been on
the neighboring French islands of 7,artinique and Guadeloupe,
The most noteworthy administrative development in the Wri is the pro-
gress toward federation of the now separate colonies of British Honduras,
Jamaica, the Lindwards? the Leeward, Barbados, Trinidad and British
Guiana, The UK Colonial Office has sponsored the federation idea because
it believes the social, economic, and political advancement of the area
can best be effected by a regional approach to its particular problems.
ENTIAL
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Weekly Contributions, 13/Lf
(CIA i!orking Paper)
Situation ;:emorandum 25-49
- 2 - 26 April 1949
Also, the Colonial Office hopes to reduce the perennial ',est Indian drain
on the Treasury by administrative consolidation, Federation was accepted
In principle by local leaders at the 1947 Lonte;N, :Jay Conference, During
recent months, the standing Closer association Committee, under the chair-
manship of a UK colonial official, has been plan'ing the machinery where-
by federation will become a fact. The work of the Committee is scheduled
to be completed this sunver. It is anticipated that the Committee's re-
port all be limited to the recommendation of such preliminary measures
as the establishment of a common fiscal, customs, and tariff policy; the
unification of currencies and public services; and the creation of a feder-
al legislature and judiciary. Such a dovelopnent would, :it is estimated,
have no Jong-term adverse effect on US security interests in the area.
Concurrent with 'iritis.-sponsored moves toward federation, native
leaders have insisted upon greater local autonomy. Trinidad has recently
been granted a new constitution which provides for some self-rulc.
Jamaica, the most politically advanced of the territories, has been almost
self-governin:! since 1944. The remainin7 colonies in varying degrees have
less voice in their own affairs, but constitutional reform is under con-
sideration for some of then Political parties, which are as a rule the
outgrowth of labor organizations, are neither well-organized nor influen-
tial except in Jamaica and Trinidad, glee tions are scheduled late this
year in Jamaica, and the left-win-socialist People's :lational Party (PA))
may replace Alexander 7.ustamente's more conservative Jamaica Labor Party
as the majority party. The PUP has previously shown itself to be hostile
to US occupation of Jamaican base sites and, from 25X1
this standpoint, its victory at the polls woula he an unfavorable develop-
ment for US security interests.
Aen the Trinidad Government starts funcc,ioning under the new consti-
tution, demagogic left-wing labor leaders of the Uriah (? guz") Dutler type
can be expected to play a prominent role, The activities of these leaders
is of direct US concern because Trinidad, unlike the other colonies, has
some industrial significance by virtue of its petroleum and asphalt produc-
tion, and the additional circurlstance that Alcoa is at present constructing
harbor facilities that will make Trinidad the world's largest bauxite trans-
fer point,
The Colonial Office and nacive politicians both agree that the MI
must achieve a greater decree of economic independence before political
federation can be ecfoctivef Mile the economic situation varies from
colony to colony, the basic problem co-on to the insular areas Is three-
fold: (1) there are too many people on boo small land units, and these
people use inefficient methods of production and lack occupational outlets
'ffrIAL
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Weekly Contributions, 13/LA
(CIA Working Paper)
Oituation kieoorandum 23-49
26 April 1.4.9
for their expending rttanhers;-(2) the area hl?!s few resources beyond agri-
culture and manpower; (3) local government revenues, derived primarily
from customs duties, are of themselves insufficient to supply the basic
educational,- social, and sanitary requirements of the territories
The TiK is endeavoring to solve these problems in a limited manner,
Under the terms of the Colonial Development and Uclfare Act, l7, 500,000
is being made available to the DWI over a ten-year period (19146-56) in
order to alleviate impediato distress and to establish projects that will
he of long-term benefit, such as the modernization of the Turks Island
silt industry and the c,Istablishwrit of the University College or the ':est
rx'2,ies at Jaraica, The -N-ans Comvimsion has roconmended the transfer of
1C4,000 islanders to Dritish Guiana and British Honduras during the next
ten years. Such a scheme, even if implemented, would at best he a mere
palliative in the face of the annual natural increase estimated at 75,000,
The UK has somewhat stabilized colonial commodity prices by bulk purchasing
agreements. Various projects, such as the promotion of the tourist trade,
have been worked out jointly with the PS, France, and the Netherlands
through the Caribbean Comission, These efforts offer no real solution of
the economic ills of the area,
,t1"xcluding US troops, the only military force in the BWI Is e UK batta-
lion located at LItQaica. Territorial crilitary units were disbanded for
purposes of economy after vbrld War IL Units of the Dritish Float make
periodic visits to the &Ina, Weal police forces appear to be sufficient
to maintain law and order.
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Weekly Contributions, B/LA
(CIA 'iorking Paper)
Situation Temorandum 2449
-g3Q9DA00160020004-4
timAL
26 April 191.0
The Current Situation in French Guiana
.1.4.41,..../FAMT.20.11Ten.1013
French Guiana has virtually nothing to contribute to US security,
nor are there factors present in the situation which in any way jeopardize
US security interests. The only significant commodity present is bauxite,
deposits of which, so far, have not been adequately explored or proved as
to quantity and quality. 7:ith regard to US military aviation, the only
importance of French Guiana is as a site for emergency landing fields.
It is of very little importance in the US air-defense scheme for the Carib-
leen region. During sorld Ar II, the US Air Force maintained a base at
fZeehambeau Field which was returned to the French Government in Januaey, of
this year. Inasmuch as French Guiana has been made an overseas department
(a new relationship binding the government of the former colony more close-
ly to the government of France), its international relations end activities
will be determined in the mother country.
The position of French Guiana in the French constitutional system was
changed by a 19146 law from that of a colony to that of an overseas depart-
ment --- a transition which was completed by August 19117, The most effect-
ive agitation for this alteration of eovernmental statue in the French
West Indies was carried on particularly by the Communists on I artinique
and Guadeloupe, No serious demand for change was made by the people of
French Guiana, ehen0 however, the French Government acceded to the demand
for modification of the imperial constitutional pattern, French Guiana
was included among those overseas possessions erected into departments,
thereby making it an integral unit in the home government with parliamen-
tary representation and all the other rights and obligations of the con-
tinental departments,
Economically, French Guiana is backward and undeveloped, Only one-
half of one percent of the land is under cultivation. Transportation
facilities are extremely primitive. There is a potentially Food harbor
in the lahoury river off the town of Cayenne, but a sand bar prevents its
efficient utilization. Port facilities, in general, suffer from neglect.
Bauxite deposits have been fourn:. An American company (Leynolds "etals)
and a French company have combined to extract bauxite in French Guiana,
out there have been no reports indicating that operations have begun.
Exploration has been too limited to permit any assessment of the value of
the deposits, In 19148 sugar production amounted to only 3,000 tons and
that of bananas to 15,000 tons. 3oth of these connodities were exported
to France, Gold is extracted is; primitive means and its marketing has
been rigidly controlled by the government, Electric power is practically
non-existent.
4: ENTIAL,
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OINUOPENTIAL
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Weekly Contributions, DAA 2 26 Av-11 1949
(CIA Working Paper)
Situation Amorandum 244l9
The population, a small and declining one, consists of a majority of
t;egroes and a white minority comprised chiefly of government officials
and ex?convicts from the former penal colony who cannot or care not to
return to France. Relations between the two racos are not good. There
is a general labor shortage. To improve this condition, the government
has plans for the introduction of about 200 families of displaced persons
with labor skills, but so far, there is no indication that any action is
being taken to implement the plan. In short, the prospects for economic
development in French Guiana are dim and its importance to the US at the
present time is nil.
COMiDiritIZIAL
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