WEEKLY CONTRIBUTIONS LATIN AMERICA DIVISION, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050017-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 12, 2016
• Document Release Date: May 7, 2002
• Sequence Number: 17
• Publication Date: April 25, 1950
• Content Type: PERRPT

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COINSIDEN'TIAL.
Weekly Contributions
LatinricIREirriWer?MEns, CIA
25 April 1950
This week:D/L& finds two items of particular interest: that on
the possibility of a Chinese Communist as consul at Curaiao (p. 2), and
that on the trued toward greater diversity in arms purchases by Latin
American countries (p. 10).
otrienT DEVELOPMENTS
NCETHERN AREA: In Haiti, political tension has mounted as the result
of attempts to change the law in order that President Estim4 may suc-
ceed himself (p, 2). A security. problem regarding Curaiao Is sensitive
oil installations may arise if a Chinese Communist replaces the re-
cently resigned Nationalist consul (p. 2). See also report on the
current situation in the British West Indies (p. 4)
CENTRAL AREA: In Venezuela, reports again indicate the possibility of
a split in the governing junta (p. 2). The appointment in Colombia of
a civilian minister of mar will not relieve the tense political situa-
tion (p. 3).
SOUTHERN AREA: See report on the current situation in Bolixds (p. 7)
SPECIAL SUBJECTS
The Current Situation in the Ikitish West Indies
4
The Current Situation in Bolivia
7
The Wend Away From Arms Standardization
10
DOCUMENT NO. 17
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Weekly Contributions, D/L 25 April 1950
(CIA Working Paper)
I. HAITI: Second Term Issue Causes Political Tension
aarSrialaid as the result of-ig-aforts of the
Ettim; machine to melte it possible for the president to succeed
himself, After a bitter ddbates the Senate disapproved a resolu-
tion calling for a joint congressional session to consider a
constitutional amendment waiving the present single term limitation.
This issue is an explosive one in Haitian politics. In
1946, a similar situation precipitated President Lescot,s removal
from office. Principal opposition to the second term comes from
certain senators who have presidential ambitions. It is possible
that the powerful army leader, Colonel Nbgloires is also opposed
for the same reason.
Despite the hazards involved, President Estill); will prob-
ably-attempt to effect passage of the amendment by artful
stratagems, including the offer of attractive foreign posts to
opposition senators. 0/IA estimates, however, that stime has
sufficient political acumen to drop the matter before opposition
should reach proportions dangerous to the security of his aftleis-
tration.
2. CURNAO: Dutch Hem?nition of Communist China Poses Possible
Securi
ch'reiogattion of the Communist regime in China may
present a security problem if a Communist is sent to the Netherlands
Antilles as a replacement for the recently resigned Rationalist
consul. The large refineries on Curacao and neighboring Aruba,
where about 60 percent of all Venezuelan crude petroleum exports
are refined, constitute one of the most remunerative targets for
enmgy sabotage in the Western Hemisphere. Accordingly, the pres-
ence in the area of a Communist Chinese consul, who might organize
subversive activity among Chinese employees of the oil companies,
would be a matter of considerable concern.
J. VENEZUELA: New Re orts of Possible Slit in the Junta
e rece repor movemen among military to
oust junta president Lt. Col, Carlos Delgado Chalbaud could lead
to a major change in the goverment, Current unrest appears to
center about two dissenting military groups, the older officers
backing Lt. Col. Marcos Perez Jimenez, junta member and minister
of defense the junior officers apparently undecided upon a suc-
cessor to Delgado,, Both groups are opposed to AccienDemocretica.
While outward ohim prevails in Caracas, there have been numerous
arrests of AD sympathizers throughout Venezuela.
Rnmors of a conflict between Perez and Delgado, which
had been numerous in the early months of the present regime, have
in recent months, markedly declined, While it has been generally?
recognized that Perez, ambitious,opportunistic, and with a large
following in the arnv, has coveted the presidency, nevertheless,
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25 April 1950
most dependable sources have believed that the two leading junta
members were functioning well as a team, and that Pewee realized
his dependence upon the political acumen of Delgado. Apart from
the current rumors, there is slight evidence of a growing rift
between Prez and Delgado.
The decision to stage a coup and its timing depends
largely upon Prez, who would probably not join in an attempt to
oust Delgado without strong pressure from his army supporters and
assurance that he would be made provisional president. It is un-
likely that such a change in government would be attended by wide"
spread violence, although some AD-inspired demonstrations might
uell be expected.. The removal of Delgado Chalbaud mild probably
result in a tougher, more repressive internal policy, an obstacle
to the return to constitutional government. In terms of US-
Venezuelan relations, it would bring to power a man not noted
for his cordiality to the US, who would probably find it expedient
to cooperate, however, in matters of major concern to the US.
COLOMBIA: Milita Minister of_11.4...lased by Civilian
lEi ap 'then 1aneta as
minister of mar to replace Sinchez Amaya, a general of Conservative
background, is not expected to lessen the partisan criticism that
has been directed at this office. While Urdaneta has not belonged
to the pro-06mez faction of the Conservative Party, he has shared
with GOmez the role of first defender of Franco in Colothia. His
appointment is not, therefore, expected to appease anyone of the
three principal factions of the now split Liberal Party (the
&satiates, the Lopistas the Gaitanistas) and, consequently, the
eituation in Colombia will continue to be tense,
7.7"A mrs,emili A
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(CIA Working Paper)
Situation Memorandum 24-50
C?ii.ZINDELZE'lAitiL
25 April 1950
The Current Situation in the British West Indies
(S ? Some unrest was manifest in the British West
In ies during the past year. Slow progress toward Federa?
tion is being made. The present economic situation is
generally unfavorab1e,1 Police and military forces are
considered adequate for the maintenance of internal order.
There is little known Comunist activity in the area? The
natives are increasingly well disposed toward the US.
-- The prospective exploitation of Jamaican bauxite
deposits, which will initially produce an estimated 40 thou?
sand tons a year, will benefit US security interests by
providing a nearby source of that material.)
Political
unrest vas manifest in the British West Indies during the
past year. Much of this unrest is attributable to economic disloca?
tions. In British Honduras, for example, violent disorders occurred,
ostensibly as a protest against devaluation but actually as a result
of the commercial sta6nation that followed the collapse of?the colony's
two main industries, mahogany and chicle. Similarly, economic strin?
genoies have evoked vocal, but as yet non?violent, demonstrations
of discontent in Trinidad, Jamaica and the Leevards. West Indiana
feel that the UK has not rewarded their loyalty vith adequate economic
assistance. As a result, D/LA believes that the colonies' loyalty to
the mother country, although still great, has been weakened.
Some progress has been achieved during the past year in forging
the instrumentalities of self?government. In the Leeward Islands,
constitutional reform is being undertaken, whereunder greater popular
participation in the government will be possible. Following December
demonstrations demanding "annexation" to the 03, the British Virgin
Islanders are being granted a legislature. Preparatory to achieving
full internal autonomy, Trinidad has just received an interim consti?
tution which greatly expands the powers of the popular representatives.
At present, political affiliations are based primarily on racial and
labor considerations, but the October 1950 legislative elections may
bring into being recognizable political parties. In Jamaica, the
December 1949 general elections were more orderly and commanded
greater popular interest than the first (1946) general elections under
universal adult suffrage.
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COLIMIZITIAL
Weekly Contributions, D/L&
(CIA, torking Paper)
Situation Memorandum 24-60
- 2 - 25 April 1950
A further step toward West Indian Federation has been taken by
the recent issuance of a definite ()constitutional plan drawn up by
delegates appointed by the individual colonial legislatures. This
plan calls for the unification of sundry administrative functions
under a federal government located at Trinidad. The UK, through the
Governor Generalovould retain control over such matters as defense,
foreign affairs and certain financial questions. All powers not
specifically granted to the federal government would remain with the
unit governments. The report now goes to the West Indian colonial
legislatures where, for various reasons, including a disinclination
on the part of the richer colonies to join with the poorer ones, its
consideration will probably be protracted.
Economic
The present economic situation throughout the British test Indies
is generally unfavorable. Devaluation has adversely affected the
colonies terms of trade because prices for their agricultural
exports have remained about the same while the cost of iaports has
increased significantly. This tread is evident even in Trinidad where
the economy in large measure is stabilized by a relatively substantial
oil industry. In the first nine months of 1949, imports valued at
$65 million represented a 23 percent increase over the corresponding
1946 period, while exports declined from $56 to $57 million. During
the same period, imports from the US, which have been held to a bare
minimum, rose from 9 million to $12 million. The already unfavorable
balance of payments and employment situation has been further impaired
by the closing of US military installations on Jamaica and Trinidad.
During 1949, the population of the heavily congested islands increased
by some 60 thousand persons, a rise of two percent.
The most pressing economic problem at the moment is the negotia-
tion of a new sugar contract with the UK to come into effect in 1952
when the present contract expires Sugar, more than any other commodity,
determinos the standard of living in the area and the failure of the
UK to make an acceptable offer has engendered considerable resentment.
Chief points at issue are (1) the limitation of the West Indies to
a 640 thousand ton quota while the UK continues sugar purchases from
dollar sources, (2) the UK proviso that prices be negotiated annually
rather than for the life of the contract, and (3) the offer of an
five-year rather than a ten-year contract. While negotiations are
presently at an impasse, it seems likely that the West Indian repre-
sentatives will ultimately accept the present UK terms under protest,,
The UK and colonial governments are attempting to relieve immediate
distress and put the colonies on a sounder economio footing by advancing
funds for development and by attracting private capital through tax and
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(CIA Working Paper)
Situation Memorandum 24-50
3-
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25 April 1950
other concessions, Only one new business, the ECA-financed Reynolds
Company bauxite enterprise, gives promise of contributing significantly
to the economic progress of the area. By and large, the economic
outlook of the British West Indies is a bleak one.
Militar
olice and military forces in the area are considered adequate
for the maintenance oflaw and order. Local police units in the
individual colonies are capable of handling small-scale disturbances.
Military forces consist of a battalion of Royal Inskilling Fusiliers,
two companies stationed on Jamaica and the third temporarily in Brit-
ish Honduras. The Fusiliers are efficient and indisputably loyal
and they can be transferred by air to neighboring territories in an
emergency. In addition, a naval squadron, including a marine detach-
ment, is stationed at Bermuda and is available for duty in the West
Indies if required.
Subversive
---ITie-re is little known Communist activity in the British West
Indies. Following the defeat of Nationalist China, small Comanist
groups emerged among lower class Chinese nationals in Jamaica and
Trinidad. These groups are believed to receive propaganda material
from the Chinese Communist Partyl I In Trinidad
there is also a "study group" of about five Communists, possibly in
contact with the UK Communist Party. These units do not constitute
much of a security problem at present
International
7.7---The British West Indians are becoming increasingly well disposed
toward the US. The natives are prone to depend on outside help in the
solution of their social and economic ills and, as the UK98 inability
to furnish substantial assistance has become increasingly apparent,
their hopes have become focused on financial benefits under Point Four,
ECA and international agencies such as the Caribbean Commission and
the UN (ECOSOC) where the US plays a primary role. Further, there is
a great demand for US manufactures ? presently under stringent import
restrictions --which are usually more quickly available, cheaper and
of better quality than similar goods from sterling sources. Thus,
despite a basic loyalty to the Crown, there is considerable sentiment
favoring closer relations with the US. The British West Indians have
no interest in or sympathy with the anti-colonial maneuvers and atti-
tudes of many Latin American countries.
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aituation lismorandum 25-50
We Current Situation in Bolivia
25 April 1950
(Sumnary ? The stability of the government pentium(' to deterio-
rate. The unfavorable economics situation has shown no significant
Improvement. Groming army political influence constitutes a
2aturo possible threat to gammment stability. The strongest
subversive group is the UHR; the KB has made no significant gains;
and the Communists are weak and politically inexperienced. Boliviars
relations with other countries are amicable.
-- US security interests have been somewhat affected by
recent Bolivian events. Generally unfavorable factors include
the increase in anti-US feeling, continuing economic difficulties,
mad growing maknees of the pro-LM government.)
Political
-----MWinment stability continuos to deteriorate, apparently without
immediate danger of an overturn. The president successfully resolved a
recent cabinet crisis by forcing the resignation of the ministers of
government and labor, who, contrary to instructicns, appeased labor by
reversing the government's policy of standing firm against demands for
the release of jailed leaders. This has actually weakened the adminis-
tration's position, however, as tho governments apparent surrender will
undoubtedly encourage labor to press further demands mislay provide an
incentive for Communist expansion. The dissension already existing within
the government party (PUSR) was accentuated by the cabinet crisis which
resulted in the defection of a section of the party to the eamort of the
expelled ministers. The government's position has been impaired too
bemuse the major domooratio parties Liberals and Social Democrats, have
'become increasingly hostile to the administration since the PUSR's virtual
boyoott of the February special session of congress. The government also
has been opposed by mine-operators, labor, importers, and exporters since
recent economic decrees.
An agreement reportedly signed by the UDR and the PIR providing for
concerted action against the government could threaten stability, but
ideological differences batmen the two parties will probably preclude
effective cooperation. Mile army support of the UUR mould constitute
the most severe threat to the administration, there is little probability-
of such a development at this time.
It is believed that, in view of the present leek of common purpose
among opposition groups the greater probability is that the administration
will be able to maintain its uneasy tenure during omingnmmths.
lereer.....4"
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Situation Pilemerandurn 25-50
-2-
25 April 1950
BOononic
---Nriviale unfavorable econonic situation has shown no significant
improvement. Government income, derived mainly from taxes on metals
exports, has been seriously affected because of the decline in minerals
prices and consequent production decline, and gold and foreign exchange
reserves are dangerously low. The government is attempting to moot this
situation by currency devaluation and modifications in its exchange rate
and import control system, but so far no significant results have been
achieved.
Labor is dissatisfied with recent wage increase decrees and may seek
additional increases. Although prices mere frozen in February, there is
considerable danger that this and subsequent measures mill be unable to
control the inflationary effects of the currency devaluation.
The 1950 foreign exchange budget was balanced by a decree which
provided that exporters must surrender their foreign exchange receipts
in exchange for bolivianos. This has not with opposition from minel"
operators, who claim it will further curtail vital minerals production,
and from importers, who are seriously affected since 1950 allotments for
commerce are less than half of last year's amount.
D/LA estimates that during coming months the general Bolivian coo-
nomio prospects will continue to be extremely unfavorable as (1) it
appears likely that there will oontinue to bo a world surplus of tin and
(2) although the recent decrees should have a favorable effect, growing
opposition may prevent their full operation.
lTilita
army (the only effective fighting force) appears to be substan-
tially loyal to the government, but its graying political influence
constitutes a future possible threat to the present administration.
Subversive
The strongest subversive group continues to be the MKR; the PIG has
made no significant gains recently; and Communists, despite government
alarms to the contrary, remain a weak and politically inexperienced group.
The VEIR has reportedly signed an agreement providing for PEI support of
an =revolutionary uprising allegedly scheduled for early May. If this
agreement should prove effective, which is doubtful in view of ideological
differences, or if the LIDE should receive army support, which is slightly
more probable, an MIR uprising -- by taking advantage of the population's
???:7",, PN.7
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Situaticn Memorandum 25-50
25 April 1950
general discontent arising from disturbed political and economic con-
ditions -- might have a real chew? of success.
The PIRIs strength does not appear to have been significantly
affected by the withdrawal of its more violent Communists and by its ex-
communication by the Bolivian bishopric. Its increasing influence among
labor is a potential threat to future government-labor relations.
Communism has made no significant gains despite government assertions,
to the contrary. It is true, however, that many aspects of the situation
are propitious for Communist activities. The government's announcements
of the discovery of five Communist-tainted plots in recent months appears
to represent its attempt to quiet increasing labor unrest and to impress
the US with Bolivia's need for financial assistance. The outlawing of
the Communist party -- which a dissident PIR faction had been trying to
organize -- and arrest of alleged Communists, will seriously curtail the
subversive potential of that weak group. Apparently, therefore, the
major importance of Communism at this time is limited to the contribution
it can make to the already powerful opposition.
International
-----baraiirs relations with other governments continue to be amicable.
Official relations with the US remain cordial although disappointment
over failure to receive additional US economic aid has recently increased
anti-US feeling. Recent recognition of the governments of Venesuole,,
Peru, and Panama indicate that Bolivia may have abandoned its doctrine
of not recognizing regimes established by force* The president has
informally requested US views regarding an immediate conference of the
ten South American nations to draft mutual defense measures against
Communism.
Economic problems are influencing the pattern of Bolivia's inter-
national relations* In order to dispose of its products, Bolivia is
resorting to "clearing agreements" with several countries. A 15-member
D17 mission is scheduled to arrive in La Paz shortly for a four months'
study of the Bolivian eoottomyo
DAA foresees no immediate changes in Bolivia's relations with
other governments*
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(CIA Working Paper)
Article 5-50
om Arms Standardization
25 April 1950
Since 1948 when virtually no surplus property was available for
sale to Latin America, arms purchases by thine countries have produced
an increasing heterogeneity in their mar materiel. In Hey 1949, CIA
found (ORE 60-49) that the "standardization of erns program" in the
Western hemisphere had not as yet been seriously threatened by Latin
American purchases from non-US sources. Since then, however, arms
purchases, chiefly from Europe, have accelerated the rate of diversi-
fication, resulting in a further trend away from any "standardization
of erns program".
Important factors which have encouraged the American republics to
return to the pre-war pattern of diversified purchasing are the dollar
shortage in these countries, the aggressive sales tactics of European
manufacturers, favorable prices and terms of payment, the generally
good quality of erns made available, and the fact that Latin America
has traditionally secured most of its arms from Europe rather than
from the US.
This increasing diversification is taking place in nearly all of
the Latin American countries to a varying degree. As regards aircraft,
for example, Argentina, due to purchases of British art/8er jet fighters
and British Lincoln and Lancaster bombers, has reduced its total per-
centage of US aircraft from about 42% to 17%. Similarly, the percentage
of US aircraft in the Dominican Republic has dropped from 100% to 04%
because of purchases of British World War II planes, (The Dominican
Republic is also reported to be interested in purchasing British jet
fighters.) In Venezuela, jet fighter purchases from the UK have caused
the percentage of US aircraft to decrease from 100% to 94%, and a fur-
ther drop can be expected in view of plans to purchase additional
British jets. Brazil is reported to be negotiating for thirty of these
planes.. Some of the countries are building up and strengthening their
air transport systems with British commercial aircraft.
Small erns purchases, particularly of rifles also illustrate this
increasing diversification. Except for a small rifles,
of rifles and
police-type US revolvers, these small arms are being purchased chiefly
from Belgium. Brazil, for example, has reportedly negotiated for the
purchase of $40500,000 of Belgian small arms, including a new type semi-
automatic rifle. Venezuela with only 1.3% of US rifles is adopting as
standard a Belgian semi-automatic rifle --- having recently purchased
60000, The percentage of VS machine guns in that country has also been
reduced from 75% to 20% due to European purchases. A comparable drop
in percentage of US rifles (97% to 40%) has occurred in the Dominican
rTylr,2
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Article 5-50
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25 April 1950
Republic. As regards future purchases of small arms, further diversi-
fication can be expected as the result of energetic and successful
efforts by Switzerland and Czechoslovakia in selling machine guns,
and the likelihood that France will share in the mortar trade.
The naval picture shows a trend toward the pre-war reliance on the
UK for warships, guns, and other equipment. Two river gunboats are now
under construction for Peru whose present strength of forty vessels is
67% US. Post-war purchases of other naval units from the UK and Canada
have been considerable, particularly purchases be- Argentine, Venezuela,
and the Dominican Republic. Should Venezuela buy three new destroyers
from the UK, as is contemplated, the percentage of US vessels would
then be reduced from 33% to 25%.
In addition to increased purchases from Europe, there is a growing
small arms industry in Iatin America 'which contributes toward diversi-
fication since European patents and calibers are generally. used. Three
major countries (Argentina, Brazil, and Mexico) have ordnance industries
which produce a large part of their ammunition requirements as well as
pistols, revolvers, rifles, bayonets, machine guns, and small artillery
pieces. Chile and Peru manufacture some ammunition as well as replace-
ment parts for most arms up to field pieces. The Dominican Republic is
planning to expand its small arms industry to supply its own needs and
also for export.
In contrast to this increasing volume of non-L6 mar mat?riel? Latin
American purchases from the US remain negligible. Since the end of the
interim program in 1948, the other American republics have acquired only
a small amount of arms from the US out of the limited supply available
to them from US firms. This has been chiefly World War II aircraft and
mall naval craft, most of which were considered expensive by these
countries and were, to a considerable extent, Obsolete with replacement
parts difficult to obtain..
At this times -there is no reason to expect any substantial change
In this trend elegy from arms standardization. Due to its restrictions
as applicable to Latin America, the Mutual Defense Assistance Act will
probably have no significant effect on the amount of US eras sold to
the other American republics even though all of them subscribe to the
principle of standardization and, other things being equal, mould
favor modern US equipment over European.. Future arms purchases by
Latin' American countries will probably, as at present, be governed by
local short-term considerations; and as long as the competitive advan-
tages of European manufacturers remain, these countries are likely to
continue to accumulate miscellaneous assortments of arms.
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