WEEKLY CONTRIBUTIONS(Sanitized) ORE, CIA 11 APRIL 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050015-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 15, 2016
• Document Release Date: September 5, 2002
• Sequence Number: 15
• Publication Date: April 11, 1950
• Content Type: SUMMARY

Approved For Rettese 2002/ag1A-FDp79-01090A015600050015-9
Neeklar Contributions
Pits, am
April -1950
CURRENT DEVELOPMENTS
GENERAL: In some of the American Republica_ the declining trend in
Latin, American Communism has either discontinued or leveled off (p. 2).
The formation of regional committees at the pro..Communiet MAL meeting
in Montevideo may strengthen Communist organization in Latin. America
(P. 2).
NORTHERN AREA: In Nicaragua, agreement regarding the forthcoring presi-
dential elections reflects Somoza 's continued control and should guar-
antee his elsetion(e.
SOUTBERN ARRA: In Paraguay, the Democratic Colorado administration
should be able to control the Colorado Party convention and the choice
of the next president (p. W. In Peru, the break between Odria and
Beltran should further decrease the formerte chances fora ',walk-away',
in the July presidential elections (p. 4).
SPECIAL SUBJECTS
The Current Situation in Brazil 5
The Current Situation in Ecuador 8
State Dept. review completed
IDOCUMENT NO.
NO CHANGE IN CLASS. El
XDECLASSIFIED
, ASS. CHANGED TO: TS S C
NEXT REViEV4 ()ATE.
AUTH: HR 0-
4. ; H.../0 lig `.??.r REVIEWER: -
,
Approved For Release 2002/10/21 : CIA-RDP79-01090A000200050015-9
Approved For Re'terse 2002/10/21 : CIA-RDP79-01090A0e200050015-9
SECRET
Weekly Contributions,
(CIA Working Paper)
11 April 1950
1. GENERAL: Termination of Declinin ?tend in Latin American Communism
Indaca
ntRainommunist strength and influence in Latin America
remain generally at a low level, the gradually declining trend which
became evident in 1947 has not continued in all countries. Appar-
ently, it has reversed recently in at least three countries and has
leveled out in a number of others. Communists have sustained losses
in M03100, Argentina, and Colombia as a result of new or increased
government anti-Communist action; and have been prevented from
making gains in Brazil, Bolivia, and Chile by continued repressive
action. They have made some recent political gains, however, in
Guatemala, El Salvador, and Cuba, -where major political parties
have accepted their collaboration. Such collaboration has reduced
Communist political isolation, making anti-Communist action more
difficult; has increased Communist respectability, thus increasing
their ability to attract new recruits and to collect funds; and
has put certain politicians under obligation to them.
Although these recent deviations from the declining trend
do not represent a large change in Communist political capabilities,
they are of significance as signs of possible future additions to
the already irritating minor Communist capabilities to affect US
security interests in various countries. In Cuba, for exanples
Communists are able to distribute considerable propaganda -- some-
times disguised in a semi-conservative garb -- designed to undermine
US prestige and influence; and are able to send their organizers to
aid Communist parties in other countries. In additions Communists
can damage the sugar crop significantly in the event of an emer-
geney. Communists and Communist sympathizers in the Guatemalan
government could use some of that government U5 facilities for the
benefit of Communism. The unstable economic and political condi-
tions of Chiles Bolivia, Paraguay, and Ecuador provide situations
which Communists have the ability to exploit. In Brazils despite
considerable repressions the Communists have retained a substantial
following, and have demonstrated their ability to propagandize
against the US effectively enough to delay the passage of a petro-
leum code favorable to US interests. In Weeeco, uhere the Communists
have influence which extends well beyond the acknowledged Communist
Party, they are capable of placing saboteurs in the oil industry.
Finally, throughout the area, the Communists, through the MAL, are
able to conceal some of their intra-continental activities, collect
intelligence, and further their labor objectives.
2. Results of ProeCommunist CTAL Yeetin in Montevideo
ei'o'-c?imauniat U' ingress o ou Amer can ade
Unions held in Montevideo on 27-31 March 1950 Wkly, 21 Mar 50) 25X1
appears to have failed in many respects to achieve important ends,
but did, nevertheless, promote certain Communist objectives.
Approved For Release 2002/1,14Alier2IRDP79-01090A0002000500y-9
Approved For Release 2002/10/21 : CIA-RDP79-01090A000200050015-9
SECRET
25X1 Weekly Ccotributions,
(CIA Working Paper)
11 April 1950
It is true that the Congress proved negative as a propa-
ganda maddest despite the anti-US speeches at the only open meeting,
because fevreto vere not already Communists or Communist sympathizers
attended and because no local noneCcemunist newspapers reported the
meeting. Weaver, Saillant and. Bestovsky, two top officers of the
Conmenistelominated World Federation of. Trade Unions, were prevented
from coming to the meeting by the refusal of the Uruguayan govern-
nest to grant them visas.
On the other hand, the Congress served to boost the morale
of local Communists and to provide a setting for four days of secret
Communist meetings. In addition, regional committees were formed
to develop the CVL into a more active force throughout the Hemi-
sphere. Sinee the Communists use the OTAL as a cover for liaison
and intelligence in Latin America, development of MOIL regional come
mittees may strengthen Communist organization.
3. NICARAGUA: Presidential Election Set
11S-TIZIWOWTSWEillaent Roman y Reyes will die
soon has precipitated an agreement between General Somoza (Minister
of War) and General Chamorro (Conservative Party leader) concerning
the date and nature of Nicaragua's presideutial election. The
agreement provides for the election, an 21 May 1950, of A president
and delegates to a constituent assembly, and stipulates that only
the National Liberals (Somoza 'a party) and the Conservatives
(Chanorrots party) can subnit candidates. This prevents the Cuadras-
pasista Conservatives (Somoza 'a erstwhile collaborator's), the
Independent Liberals (the Carlos Pesos-Arguello faction), and other
opposition groups from elective participation. By this agreement,
the wincing presidential candidate it assured majority support in
the constituent assembly, which is to rewrite the Constitution of
1946 in order to make Somme's candidacy constitutional and to
include nominal recognition of the social guarantees and of the
rights of van as set forth in the Bogota Pact. However, according
to the agreement, the tresidenteeleot cannot take office until Mgy 1951
or until President Roman dies or resigns. Should Roman die before the
election, the current pro-Somoza Congress will probably name an in-
terim president.
25X1l es
timates that Somozals political control is an
effective
guarantee of his election and continued dominance?. No
fundamental change in the Nicaraguan situation or in Nicaraguan-US
relations is therefore to be expected. However, the assumption of
office by Somoza as duly elected president might, to some extent,
improve Nicaraguan relations with countries favoring "democratic
practices" and handicap the efforts of anti-Somoza groups that
claim his regime constitutes a "dictatorship".
Approved For Release 2002104/92r-C-I-A;DP79-01090A00020005Ji5-9
Approved For Rese 2002/10a6E4A-RDP79-01090A0-1110200050015-9
25X1 Weekly Contributions,
(CIA Working Paper)
11 April 1950
PARAGUAY: Isikade_NZSAnimiColozvention
Democratic ra o action, currently in control of
the government) vill seek to dominate the Colorado Party convention
scheduled for 16 April for the purpose of selecting nominees for
president and for the Rouse of Repreeentatives, Paraguay's only
elective legislative body. Provisional President Federico Chaves
is the probable candidate for president. Despite a few conspira-
cies against the administration, it is estimated that other factions
of the Colorado Party are not strong enough to prevent the Demooratic
Colorados from controlling the convention and its nominations. If
usual elective procedures are folloved) these nominations will be
25X1
6.
25X1
tantamount to election.
PERU: .1.;* Break Between Odra and BeltrAn
editor of the
of Pedro
an open
supporter.
some time as
meas-
25X1
25X1
arrest o e ommunist I.0 o Ravines,
Beltran-owned newspapers, and the subsequent resignation
%Ur:in as head of the Peruvian Central Bank, constitute
break between thelme And EW1trin, formerly a strong
Coolness between and Beltrin has erlsted for
the Baltrin newspapers have attacked various administration
ures especially Odria's delay in resigning his office.'
While Beltr4n
Baltrin
by vhich the
decrease Odria"s
in July.
political group, Aliansa Nacional, has little following,
was an important factor in the 0:Abhor 1948 revolt
regime was established. His defection will further
chances for a "walk-away election!" to the presidency
Approved For Release 2002/10/ - 9-01090A0002000500110
SECRET
Approved For R6lerise 2002/10/21 : CIA-RDP79-01090Ab4200050015-9
Weekly Contributions,
(CIA Working Paper)
Situation Memorandum 20-50
The Current Situation in Brazil
Al April 1950
(Summary -- Recent developments regarding the forthcoming presidential
elections have further confused the political situation. The army re-
mains loyal and is in position to prevent a coup at this time. Brazil's
economic and financial condition is better than it has been for the past
few years. The Communists are no threat to the regime. Although Brazil
continues its close cooperation with the US in international affairs, .
there is considerable anti-US feeling among some officials and the public
because they feel that Brazil is being neglected economically by the US.
-- US security interests have not been favored due to the con-
tinued difficulty in obtaining increased shipments of manganese and the
present widespread anti-US feeling.)
Political
Recent developments regarding the forthcoming presidential elections
have confused further the political situation. Two outstanding presidential
prospects, War Minister Canrobert (see Milit ) and the Governor of Sao Paulo,
Adhemar de Barros 'Wkly., 28 Feb 50 ,have eliminated themselves by failing
to resign by April i, the deadline on which cabinet ministers and governors
were required to resign in order to be eligible fgr the presidency. In fact,
the only resignations were those of two minor politicos - both cabinet members -
one of whom has hopes of becoming the Mark horeell candidate of the two major
parties, the government PSD and the UDN. However, agreement on a candidate by
these parties seems as remote as it did several months ago, despite almost
daily proposals and counterpropoeale.
It is true that this atuation increases the prospects for ex-dictator
Vargas, or a candidate mutually supported by Vargas and Barros (in a press
interview, the latter strongly intimated that he was supporting the candidacy
of Vargas). There have also been rumors of a possible military golpe if the
PSD and the UDN fail to agree on a candidate whose chances of success appear
good (see Milita ). However, in a situation where presidential prospects
have iooniea up only to disappear from the scene it is impossible at this stage
to predict who might be the candidates of the fespective political parties.
Military.
During the peat few months there have been rumors of an impending army
coup which would prevent a normal solution to the choice of the next president.
These rumors, which have apparently gained momentum during the past fortnight,
may be responsible for Canrobert's decision not to resign the War Ministry to
become a presidential candidate. At all events, he has previously stated that
he would countenance no coup on the part of the =Ay and on 3 April that it
'will maintain the democratic order at any costa. Furthermore, if the major
political parties were to unite in favor of a single presidential candidate
such a coup would be improbable.
5.
Approved For Release 2002/10/21 : ategg:71:90A000200050015-9
Approved For Re' 2002/10fibitEA-RDP79-01090A0111400050015-9
25X1 Weekly Contributions,
(Cla Working Paper)
Situation Memorandum 20-50
11 April 1950
On 1 March a law became effective which provides for retirement of
officers of the armed services and the federal and state police who belong
to, are affiliated with, or support the doctrines of illegal associations
or political parties. This law opens the way for the elimination from the
armed services of those officers affiliated with Comnunist-front groups.
The recent satisfactory combined arms maneuvers, as reported in the press,
indicate that the Brazilian armed forces continue to be somewhat more advanced
in this regard than those of other Latin American armies. An additional ii-
provement in the quality of military training of high tanking officers can:
furthermore be expected as a result of the establishment of the national War
College (inaugurated on 15 March),
Economic
Brazil $s economic and financial situation, better now than it has been
far the past few years, should continue to improve during the coming months.
Industrial activity remains brisk with little or no unemployment reported.
Although a complete solution to the inflation problem it not in sight, the
government has denied most demands for increased wages and efforts are being
made to reduce the high cost of living.
The external-debt position has been improved considerably by large pay-
ments on the commercial backlog due US exporters, and there appears to be
sufficient foreign exchange to place Brazil on a current status as BOOM as
administrative delays can be overcome. Although Brazil is over-all balance
of trade for 1949 showed a deficit of cr$495.9 million (about US $26.7 million),
its trade with the US was favorable by US $73.6 million. - thus reversing a
post-war trend. A continued favorable balance of trade with the US, and
possibly with all countries, appears likely. However, US security interests
have not been favored due to the continued difficulty in obtaining increased
ehipments of manganese from Brazil Wkly 17 Jan 50), 25X1
A development conflicting with US trade policies,: is the increasing offi-
cial encouragement of private barter transactions designed to move export oom-
modities finding little foreign demand, in return for luxury items as well as
essential imports, without using dollar exchange. Brazil is Currently discus-
sing trade agreements with twelve nations including Western Germany, while
discussions with fagoslavia were reportedly concluded last month with the sign-
ing of an agreement (not yet ratified).
Subversive
----Arirlost virulent Communist activity in recent months was the campaign
during February and early March against the visits of Mr. Kennan and Assistant
Secretary of State Miller in connection with the meeting in Rio de Janeiro of
Approved For Release 20
6
IA-RDP79-01090A00020005001t-9
25X1
25X1
Approved Fol,lease 2002/10/21 agtm0P79-0109V00200050015-9
Weekly Contributions,
(CIA Working Paper)
Situation Memorandum 20-50
- 3 - 11 April 1950
the US Ambaseadors to the South American countries. The police, evidently
aware of such plans, were able to prevent any large demonstrations or any
particular violence ?fitly 7 Mar 50).
The individual Brazilian Communists who attended the pro-Communist OTAL
meeting in Montevideo during the past month Wkly 23. Mar 50) are not 25X1
fully representative of Brazilian labor, C r influence is negligible.
Brazilian Communiste are still in no position to threaten the national
security and are not expected to make any gains in this direction in the near
future.
International
----firSrange security interests continue to be favored by Brazil's
international policies and practices (see IWkly 28 Dec 49)0 A case
in point is the fact that Brazil deposited-U5-13 March its ratification of
the OAS Charter, thus becoming the fifth American nation to ratify it.
On the other hands during the past several months, there has been con-
siderable anti-US feeling. Underlying recent criticism of the US is the
feeling of Brazilians that in economic matters the US is not granting thee
enough consideration, particularly in view of Brazil's record of coopera.
tion during World Wars I and 11 and the post-war period. There has been,
for example, a growing fear and resentmmat among Brazilian officials and
public that the garehaU plan is benefiting competing economies in lain and
Africa to the detriment of Brazil and other American Republics. Etrazilians
now even fear that Point Four, if implemented by the US congress, will have
a similar effect.
25X1
A more immediate target for criticism has been the US congressional hear-
ings regarding the rise in the price of coffee. Brazilians regard the hear-
inga as unobjective and as blaming Latin American coffee interests---arazilian
25)(1 in particular I-1We, 28 Dec 49). The invitation extended to a completely
discredited 'Iacono etc of Portuguese origin to come from Rio to testify at
the hearings has aggravated Brazilian sensitivity. This sensitivity was also
reflected in the editorials of a large, generally pro-48, Sao Paulo newspaper
(considered the. New York Times of Brazil), criticising the 22 March speech
of Assistant SeigTiFilegate Miiler as indicating that Brasil should be
kept as an exporter of raw materials for the US.
Should the present save of anti-US feeling continue - there is so far
210 evidence to the contrary - this would adversely affect the close coopera-
tion which Brazil normally extenda to the US.
Approved For Release 2002/10/21 : CIA-RDP79-01090A000200050015-9
Approved ForWoilease 20021gya: CIA-RDP79-0109610600200050015-9
25).(1 eeekly Contributione,
?neek Working Paper)
'dituatioe Memorandum 21-50
The Current Situtiee in Ecuador
? II April 1950
.teersa.ary -- The stability of the government continues to be threatened
eilTeih army and civilian-inspired conspiracies? The economy has -suf-
fered several setbacks and the oetiook for the immediate future is not
favorable, Dieaffection continues, but on the whole the army still
appears loyal to the government, Lack of funds limits the Cormnunist
ebrty's capabilities for effective action Ecuador will continue to
be influenced by US foreign policy in Ito international relatiwee
-- Recent developments in Ecuador have not adversely affected
Zet
security interest)
reerit.e,
The stability of the government continues to be threatened by both
military and civilian conspiracieee During the lest few months in earieum
oppoeition movements have been aeeking to strengthen their positions, Carlos
Ouevera Moreno, backed by Guayaquil bankers and businesemen, eas been printing
a bitter anti-Plaza -weekly magazine and recently foemed a new political party
(Partido eel Pueblo) to serve as a focal point of oepoeition to the Plaza
administration., Col, Cesar Alfaro, Depute Chief of the Armed Forces, continues
stir up trouble within the army and, vith Socia.7,est support e he probably
presents the greatest threat in the Sierra regionc In view of the recent
alliance between the Socialist and Libera-Radical Parties,? Alfaro probably
ean now also count on the support of many left-vire members of the Liberale
Radical Party, 'in addition to thesetwo principal potential revolutionary
leadere, reports of late have raised doubts about the loyalty of the Minister
of Defense (allegedly engaged in deals eith the Coenonists) and of the Come
mender of the Army., Vega Davila.
The fact that Plaza4s opponents var, all them3y from bankers on the
right to Communists on the extreme left lakes practill.:ally every move of. the
government subjeot to bitter attack free some quarter, Given the increased
popular- unrest- and dissatisfaction which this situation has produced, it ia
of course possible that a revolution cOlad get started at any time, On the
other hand, however, the very diversite,of intereetn among the opposition
eentributes to the continuance of ?laza in office ks none of the opposi-
tlonist groups appears to have suffioieat stronctheo act alone, the suecoss
of any revolutionary action depends upAa the williiTness of two or more of
them to accept the compromises necessary for their effective collaboration,
. While it is true that the possibility for such colleboration seems greater
than it did three months ago, at the rement there still remains too much
divergent* to make a successful coup eossible in tne immediate future,
Economic
--Vie Ecuadoran economy has suffer
benefits of new agricultural methods
time, prospects are not favorable for
in the immediate future
Approved For Release 2002/10/21 :
-
NJ several setbacks and, although the
my be felt in months' or a yearns
improvement in the economic outlook
.....4x0e9p43DP79-01090A000200050015-9
g,
Approved For RelNrge 2002/10/244043MRDP79-01090A00400050015-9
25X1 Weekly Contributions,
(CIA Working Paper)
Situation Memorandum 21-50
- 2 - 11 epril 1950
Severe floods in March paralyzed rail transportation between the port
of Guayaquil and Quito. It is estimated that repairs mill cost about 12
million sucrea (c.US $889,000) and will require two or three months for com-
pletion. The serious food and gaeoline-eupply problem resulting from this
situation and the consequent skyrocketing of prices has led the government
to establish price controls and gasoline rationing in the Sierra region from
Quito to Cuenca, Two other blows to the economy in recent months will have
a more lasting effect: (1) the Shell Company of Ecuadores decision to end
explorations in the Oriente if sufficient quantities of oil for commercial
exploitation have not been found by the end of April; and, (2) the announce-
ment of the termination of the South American Development Compaey's gold mining
program in Portovelo. The closing of the mine will create a serious unemploy-
ment situation affecting about 20,,000 people.
At least partially offsetting the effect of these unfavorable development? have been recent indications of an eventual improvement in the quantity
and quality oe Ecuador's exportable agricultural producte. lespansion in
banana production for 1950 is planned, since banana exports in 1949 shored
a 25 per cent gain over the preveding year and, due to the sharp increase in
world banana prices, had on export value 80 per cent above that of 1948.
Improvements in cocoa plantings, the introduction of mechanized techniques
to reduce the costs of rice production so that Ecuador's product can better
compete in the world market, and the continuing high market price of coffee
offer further encouragement.
The government of Ecuador is still investigating the best mans of revis-
ing ita exchange-rate measures in a manner which will meet with the approval
of the International Monetary Fend, and latest reports indicate that these
steps will probably be in the direction of simplification of multiple exchange
25X1 rates Wkly, 21 Mar 50).
Military ?
On the whole, the army continuo a to support the government, more because
of a lack of unity among the disaffected elements than because of any admira-
tion for the present administration. The pay raise and monthly bonus which
became effective in January were to alight to effect any improvement in moralie,
Army planning calls for a considerable decrease in troop strength in the
coming year because of a $5,000,000 cut in the national defense budget. Al-
though these plans envisage the dismissal of many regualr troops, it is doubt-
ful that the government will make such a move in view of the increased agita-
tion which it would produce in the army. Any reductions in troop strength
in 1950, therefore, mill probably be effected by cutting down the number of
conscripts who are normally called up for training in the course of a year.
Approved For Release 2002/
DP79-01090A000200050019z9
Approved For ROliefise 2002/10/gtaW-RDP79-01090AM6200050015-9
25X1 weekly Contributions,
(Cl. Working Paper)
Situation Memorandum 21,50
25X1
tr,
11 April 1950
Subversive
-----Uaginist leaders have ambitious plans for a general strike, but given 25X1
the present lack of funds and the declining enthusiasm of rank-and-file party
members, such plans have little chance of realization without considerable 25X1
financial support from abroad.
As yet there is no clear evidence that the PCE has received finane
cial help from any other foreign source.
Communist influence in the Sierra region continues to be negligible.
The party's influence is confined principally to the labor unions of the
coastal region, a few of *doh it controls through majority representatiom
on the directorates. Communist coastal leaders were active in the recent
railway labor conflict and their plans for the Altura include the instiga-
tion of a strike in the oilfields of the Santa Elena peninsula0
no significant increase in the strength or effectiveness of Ecuador's
Communist Party is expected during coming months.
International
At present Ecuador is not confronted with any serious international prob-
lems, and continues to be favorably disposed toward the U80
The question of recognizing Communist China or, at least 9 of deciding
whether the latter should be seated in the UN has been a matter of concern
in recent months. Ecuador has little desire to take an independent stand in
the Security Council on such a large issue and, since the US position has not
been made clear, the Ecuadoran government has recently announced that it will
abstain from voting if the question comes before the council.
A report of 6 March indicates that Ecuador will soon send an ambassador
to Spain, This weld represent a reversal of the former Ecuadoran policy
(reaffirmed as recently as 21 March by Dr. Romero Viteri-Lafronte, Ecuadoran
UN representative) of abiding by the 1946 UN recommendation for the with-
drawal of chiefs of mission from Madrid.
A meeting of the guarantors of the Peruvian-Ecuadoran boundary under the
Rio Protocol of 1942 may soon be held for the purpose of teying to solve the
Lagartococha dispute. Ecuador has expressed its willingness to refer the case
to the International Court of Justice but Peru (which feels that the matter
has already been settled in its favor) opposes submitting the dispute for
judicial settlement.
Approved For Release 2002/10/Zi.6firErP7901090A000200050015-9
10.