WEEKLY CONTRIBUTIONS 24-50 (Sanitized), ORE,CIA 13 JUNE 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050024-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 15, 2016
• Document Release Date: September 16, 2002
• Sequence Number: 24
• Publication Date: June 13, 1950
• Content Type: PERRPT

2!.X1
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Weekly Co_IntitEtizsgg2haTmmt
13 June 1950
$ CIA
The possibility of Brazilian legislation affecting US imports of
critical and strategic materials (p. 3) seems to to merit particular
attention this week.
CURRENT DEVELOWENTS
NORTHERN AREA: In Cuba, one result of the June elections has been to
strengthen temporarily the Communist political position (p. 2). The
Haitian military junta 'a initial activities have been constructive (p. 2).
CENTRAL AREA: In Brazil, political pressures in an election year may lead
to passage of legislation restricting export of strategic and critical
materials (p. 3). The Colombian labor movement is losing its independent
capability of serving as a check on arbitrary government action (p. 14).
SOUTHERN AREA: The increase in Chilean strikes appears to have primarily
a political motivation (p. h).
GENERAL: Considerable reaction may be expected in Latin American coffee?
producing countries to the recommendations of the Gillette subcommittee
(P. 5).
SPECIAL SUBJECTS
The Current Situation in Guatemala ...... ? ? ? . .6
The Current Communist Situation in Latin America ? ? ? ? . . 9
DOCUMENT NO.
No 'HANCE IN CLASS. I -;
DECLASSIFIED
ASS. CHANGED TO: -3 5 C
NEXT REVIEW DATE: _
AUTH: HH
DATE/
State Dept. review completed
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2$X1 Weekly Contributions,
(CIA Working Paper)
21r50 13 June 1950
1. CUBA: Communists Gain Politically. from June Elections
Tfie nit effect of the June election has been lo strengthen
temporarily the Communist position in alba, particularly in the
propaganda advantage afforded, The Communists themselves claim
that their Partido Socialiata Popular, which joined with the anti-
Frio Autinticos, the Republicans, and Batista 's party (PAU) to
elect Nicola Castellanos mayor of Habana, has scored a "Communist
triumph". Castellanos has admitted that Communist aid was one
decisive factor in his victory over Antonio Pries the president's
brother. Other "Communist triumphs" resulted from electoral pacts
between the Communists and norrOommunists in various parts of Cuba,
and the Communists, who for several months have made good propaganda
usage of their acceptance in electoral partnerships, are now doing
the same with the election victories. It is true that outlawing
the Communist Party in the near future, as US EMbassy Habana con-
eiders possible, would cancel their election gains. But it is by
no means certain that Cuban authorities will find such a move
politically expedient at this time. Lesser repressive treasures
would have no great effect on Communist strength or influence.
2. HAITI: Milita Junta Activities Constructive
ry unta isoo gaconciliatory domes-
tic policy. One example is the appointment of a consultative council
comprised of twenty-five prominent citizens representing all geo-
graphical regions as well as both bleak and Mulatto elements. The
state of Beige, which has been in effect almoat continuously since
Mardh 1949$ will probably be lifted shortly. If civil liberties are
in fact restored, Minister of Interior Magloire can be counted on
to deal firmly with any abuse on the part of the press or public.
An effort to return to the conservative fiscal practices
that prevailed prior to the Estimi regime is evident in the careful
review of Haiti's public finances now being conducted. In order to
eliminate the $2.3 million treasury deficit incurred under Estimi,
general expenditures are being pared by such measures as permanently
closing the expensive Exposition. Further economies, such as with-
drawing Haiti's application for memberOhip in the International Bank
and the Monetary Fund, are being considered. .These economies, how-
ever, will not seriously affect previously initiated projects of
socio-economic value such as the 1950 census, the Eximhant&financed
Artibonite development, the literacy program, and the joint UNICEF-
government campaign to eradicate yaws and syphilis.
First international acts support the judgments expressed in
recognition of the junta by countries of international importance to
Haiti. As an earnest of its intention to meet external obligations,
the government has paid $315,000 to the US against the $5.5 million
1938 public works loan, leaving an unpaid balance of only $430,000.
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25X1 Weekly Contributions,
(CIA Working Paper)
24-50 13 June 1950
After more than a year without exchanging ambassadors, it seems
likely that Haiti will resune full diplomatic relations with the
Dominican Republic, thus contributing to the easing of congenital
friction between the two countries.
The conTlete calm prevailing during the month following ex-
president Estimate ouster may be accepted as an augury of the present
gowernmentte continuing stability. There is little likelihood that
the Junta, supported as it is by the army, clergy, press, and busi-
ness community, eill be seriously embarrassed by the opposition of
the small Communist Party (PS?), by Daniel Fignoljts amorphous labor
organization (M(P), or by the disgruntled political clients of
former president, who is now exiled in France.
BRAZ1I Draft Leeislation Would Curtail Mineral Exports to US
rbIu, repy appV'fie oneffon
silttea of the Chamber of Deputies, can, if enacted, seriously affect
US imports of several important critical and strategic minerals.
This bill woulds prohibit the exportation of fissionable elements
as *all as the minerals of thorium and uranium; give general control
to the Brazilian National Security Council of the exportation of rare
metals and those minerale *doh contain them, as well as essential
einerals whose known reserves are insufficient for the internal re-
quirements of the country; and give to the same agency the control
L',7f the execution of the general policy of mining, beneficiation,
ena iodastrialization of minerals that contain rare or fissionable
elawaete,
Although this bill was aimed particularly at monazite, it
'1g3 t)tiolf indicated by Brazilians that other minerals -- such as beryl'
And eireonium? and possibly tantalite, columbite, lithium ores, and
tungeten ores -- are considered utilizable in nuclear-energy applies-
time., If the inclusion of these ores in the list of those required
ror nuclear-energy purposes cannot be justified, an attempt may be
made to include them under those of which the reserves are too small
roe Brazilian requirements. It is also true that further exports of
manganese from the only producing area -- Minas Gerais state -- could
be curtailed under this bill.
The pressure for this bill, seems to come principally from
those seeking to make political capital of the issue --- extrema
eationalists and the Communiats and the politicians merely striving
Iv win votes during the period prior to an election in which it
Appears that nationalism ? "Brazil for the Brazilians" -- will be
A,x1 important issue. The proponents of this bill, however, may also
have aimed it at the foreign firms now exporting these raw materials,
in an effort to force them to establish plants in Brazil to bene-
rieiate the ores and so to give further employment to Brazilians
and increase the inflow of foreign capital investment.
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25X1 Weekly Contributions,
(CIA Working Paper)
24e50 13 June 1990
Although other alining legislation, including an over-all
mining code, has been under study in the Brazilian legislature for
more than two years, election year political pressures way possibly
force passage of this bill before the October elections.
1.6 COLOMBIA: Labor Movement Weaker
7"iiirairEreiZirdent force capable of checking arbi-
trary government action is becoming weaker under the Conservative
regime. The present administration apparently with the objective
of discouraging the now-Liberal-dominated OTC (Colombian Workers'
Confederation), has failed to confirm the legality of the CTC
convention results of 6May, in which the Communists were ousted
25X1
from leadership WILly, 9 May 50). In addition, the administra-
tion has dela action on a request to declare that the dissident
Communist-led faction has no status, thus keeping both factions in
a questionable legal position. In the present situation, only the
Conservative-and-Churoh-tecked UTO (Unien of Colombian Workers) has
a legally recognized governing body.
The present administration may be expected to continue
to oppose any labor organization it does not control. In the case
of the Liberal CTC? two paths of action are now open. It may delay
its decision on the status of the Communist-led faction of GTO for
a protracted period even though it is not expected to take positive
action encouraging that faction, in an attempt further to weaken the
Liberal organization. Alternatively, it may finally bring about a
decision adverse to Liberal-sponsored OTC in the still-pending legal
25X1 case l 24 Jan 50). There is apparently no group in Colombia
both willing and able to make an effective protest against either
alternative.
5. CHILE: gyittStrilLesarPoliticallyred
UTF/5iii7,--nonscon, and?g46-0ifid-electric company
workers, totaling 10,000, have now joined the almost constant series
of strikes since President Oonzglez Videla's return from the United
States. Employers report that the unions are avoiding discussion
or issues and assert that the real strike ,motives are obscure; some
of the strikeredemands are, in fact, patently unreasonable. A decree
ordering nitrate and copper workers back to work has been ready for
presidential signature since 7 Jens, but has not yet been reported
signed.
25X1 believes that these strikes constitute a political maneu-
ver to create pressure to force passage of Finance Minister Vial's
yege-incraase and taxation bill in the Chilean Senate where severe
opposition is expected. Delay in signing the back-to-work order fur-
ther indicates that the president does not consider the situation
dangerous to stability or to the national economy.
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25X1 Weekly Contributions,
(CIA Working Paper)
24,50 13 June 1950
6. GENERAL: Gillette Retort Will Arouse Adverse Reaction
Thera is certain to be considerabie reaction among the
coffee-growing nations of Latin America to last Friday's announce-
ment of the recommendations of the Gillette subcommittee which had
been studying the cause for the sharp rise in coffee prices. Al-
though the Gillette report will have no official status unless
adopted by the US Senate, many Latin Americans will claim the sub-
committee's report is US intervention in purely local affairs, as
has already been stated by some Colombian officials, and it can be
expected that they will continue to point up the considerable post-
war rise in prices of their imports from the US. If these recogr
mendations do become officials it is possible that discussions of
a US-Brazil treaty for the elimination of double taxation may be
seriously handicapped, that negotiations for increased US exploita-
tion of the vast manganese deposits in Brazil may become more
difficult, and that the increasing anti-US feeling may be further
aroused. Approval of the Gillette report 'would stimulate latent
anti-US sentiment in Colombia and would seriously embarrass nego-
tiations for the US-Colombia trade treaty, Similar reactions can
be expected in other coffee-producing countries.
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(CIA Working Paper)
Situation Memorandum 36-50
The Current Situation in Guatemala
13 June 1950
-- The activities of Colonel Jacob? Arbenz, PAR presi-
den . candidate, continue to dominate the political scene*
Resignation of Communist leaders from the PAR may benefit Arbenz,
who must now compete for popular support with Dr* Victor Giordani?
candidate of the large, moderately leftist FPL* In economic
affairs, the decision of the United Fruit Company to abandon
its Atlantic Coast banana plantations will have important politie.
cal and economic repercussiaasj however, no imnediate effect on
the national oconoey is foreseen* Communists appear to be
isolating themselves politically by their excessive zeal in
attacking the US* The arpy and air force remain weak politi-
cally and militarily* Relations with the US have deteriorated,
but indireot attempts at conciliation may be forthcoming*
-- The possibility that the Communists may become
estranged fra2 their political host party, thereby weakening
their influence, is the most significant development effecting
US security interests0)
1+INN I
Political
----TS-political scene continuos to be dominated by the activities of
Colonel Jecobo Arbenz and his leftist supporters* Th9 campaiga alignment
of Arbenz (presidential candidate of the Partido Aocion. Revolnoionaria)
with organized labor has given pro-Communist labor leaders the means and
the opportunity to disseminate vicious anti-US propaganda* Although
Arbenz himself has adopted a nationalistic, anti-imperialistio campaign
line, it has been more temperate than that of his extremist Jupporters?
sone of whom have now resigned from the PAR on the grounds that its loaders
are yielding to "imperialistic" (i0e0? US) pressure* The resignations of
these pro-Communists may benefit Arbenz by relieving him (as PAR candidate)
of the responsibility for their actions, since it is clear that Arbenz does
not wish to appear as a pro-Conmuniet himself or as an irreconcilable
opponent of US business intimate*
Arbenz? the strongest candidate, new has to contend with a rival
Dr0 Victor Giordani? candidate of the moderate loftiat Frente Popular
Libertador who may find support amens conservatives* anti-militarists and
intellectuals, business and professional men, =doyen among portions of
the labor movement which may distrust the sincerity of Arbenz' avowed
praelabor policy*
Of the current political developments, the tandency toward the
isolation of the Comnuniats (as indicated by the recent resignations from
the PAR) is favorable to US security interests*
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Malay Contribations, 4,-60 13 June 1960
(CIA TIOrkiag Peper)
Situation Memorandum 36-60
leo:neat)
Winost significant economic development of recent months has been
the decision of the United Fruit Compagy to abandon its Atlantic Coast
banana plantations at Bananera. This deoision, due primarily to severe
storm damage and disease conditions, will have both political anti economic
repercussions* It is unlikely that operations on the plantations can be,
or will be, suddenly discontinued, and the withdrawal maybe gradual over
a period of a year or more, In the long run, the national economy may
not be greatly affected, since Atlantic Coast bananas represent only about
one fifth of total banana exports and continued high coffee prices will
compensate for loss of banana income. However, the withdrawal will injure
the economy of the Bananera region =drain affect the welfare of some
$600 workers and their dependents.
As a consequence of the United Fruit ,Company decision, presidential
candidates and the administration may find it desirable to clarify their
attitudes towards US business. They will, in, effects have to choose
between the extreme, impractical approach of the demagogic nationalists
Who may demand aggressive retaliatory aotion (mph as expropriation) and
a more moderate, more practical, and more conciliatory approach which
mould assure cooperation on the part of the Fruit Comm** in minimizing
the disruptive effects of the plantation shutdown. There is some evidence
that the demogogio nationalist approach will be rejected, or at least
ignored, by the candidates and the government. The B114 most radical of
the political parties, has already lost its ultraanationalist? pro-Communist
contingent. Although the government has not rot responded to the situation,
it has recently recognized the need and desirability of cooperating with
some US businesses by rejecting the Enloe-Guatemala chicle agreement so
at to permit selling to a US chicle buying fire and by granting a US-owned
company a contract to exploit lead mines in Unehuetenango. Also
there are prospects of agreement on the renewal of the Pan &TOMS= Atel
'elm operating contract.
In general, there has been no change in the apparent stability of
the national economy as a whole, though economic difficulties within govern
-
moat agencies are indicated by tranefers of funds and delay in meeting
obligations. Current developments in economic policy-tend to favor US
business interests.
Military"
There has been no substantial change in the military situation. The
morale of armed forces remains low. Presumably, military funds continue
to be diverted for personal and political ends rather than for necessary
military expenditures, causing key officers to remain loyal to the adminis-
tration and to presidential candidate Arbenz.
No substantial change in the military situation is antioipated.
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Weekty Contributions, [240.50 13 June 1950
(CIA. Working Paper)
Situation Memorandua 36-50
Subversive
ladda.by their canpaign alignment with the PAR and Colonel Arbens?
and their affiliation with the CTAL? pre-Communist labor leaders have been
extremely successful in flooding the country with anti-US propaganda* On
May Day, and at various political rallies, Manuel*Pinto Usage and other
leaders have denounced US policy as imperialistic, interventionist, aggres-
sive, and hypocritical, while they praised the "nations striving for peace".
However, this excessive zeal apparently hampers the Arbors candidacy and
consequently has brought about a schism in the PAR, the party through which
Communists have exerted political influence. The PAR has officially dis-
claimed responsibility for the strongly auti-US slogans recently painted
on the walls of the US EMbassy, and its feeling against frank anti-US, pro-
USER propaganda has caused the resipatioe of ten pro-Communists* These
included Manuel Pinto Usage. and JOBO Manuel Fortuny who, nevertheless,
have reiterated their support of Arbens.
At the moment, therefore, a reaction to the excessive propaganda of
recent months is tending to isolate the Communists* It is true that the
Communists may have resigned from the PAR in order to assure udder popular
support for their candidate, Arbens, while leaving themselves free to
disseminate anti-US propaganda* However, believes that these resig- 25X1
nations are indicative of a fundamental split between party-line Communists
and non-Communist leftists. US interests are favored to the degree that
the Communists are isolated and deprived of the facilities and protection
of their boat party, the PAR.
International
In recent months, the conduct of Guatemalava foreign relations with
the US has reflected the rabid nationalism evident in the presidential
campaign. The influence of extreme nationalists was indicated by Guate-
mala's official (though unwritten) request that us Ambassador be recalled
on the grounds that his life was in danger because of his "interference"
In Guatemalan affairs* This request immediately produced mutually antago-
nistio charges of "Communism" and "Imperialism" in US and Guatemalan
political circles, which have impaired relations between the two countries*
The Guatemalan government, by permitting and facilitating Communist-
inspired propaganda attacks against US, has further alienated US opinion*
Although Guatemala's anti-US actions have impaired relations with the
US, it is believed that worsening relations have focussed attention upon
the basic necessity of political and econendo cooperation between the two
Countries* While it is unlikely that the Guatemalan government will alter
its stand toward Ambassador Patterson (whoso personal unpopularity is not
limited to extremists) or prohibit unofficial attacks on US "colonialism"
and "imperialism", it is possible that some indirect conciliatory action
will be taken* Insofar as relations with other countries are concerned,
it is believed that Guatemala's present antagonism toward military
dictatorships and anti-labor governments will continue to be emphasised*
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25X1 Weekly Contributions,
(CIA Working Paper)
Situation Memorandum 3?.-50
21r5o
13 June 1950
The Current Coemunist Situation in Latin America
Moat important of Communist activities have been
ose connected with the "peace" campaign, the CTAL conference
in Montevideo, and the Uruguayan, wool strike. The trend of
political influence has been marked by losses in Venezuela,
Panama, and Guatemala (including steps toward outlawing of
the Communist Party in the two former), and gains in Cuba,
Chile, and Trinidad. (beerved trends are expected to con-
time, except that the Cuban government may begin some anti-
Communist action.)
Current Activities
---"""TM7Filianimpaign has been an important theme in al/ Communist
activity during the past quarter. Although no overt physical violence
directly related to the "peace" movement has yet been reported, the tone
of its propaganda is becoming more militant, with emphasis on the
for peace by all possible means. Inactive "peace" committees have been
reorganized, without much regard for hiding Communist influence in
them, and active committees have closely followed instruction from the
Faris headquarters of the Partisans of Peace. Communist front-group
activity was also used for "peace" and other Communist propaganda pur-
poses. During April several woments front groups bold national con-
gresses,at each of which "peace" was a main topic an the agenda?
Organization of a number of evanescent front groups was started in
various countries by the Communists. In each case, the organizational
efforts themselves were used for propaganda purposes and as a basis for
the collection of funds. Counter-propaganda to the "peace" campaign
apparently has not been effective enough to prevent the Communists from
collecting funds in the name of "peace" and from securing thousands of
signatures for "peace" petitions.
The pro-Communist CTAL conference in Montevideo held 27-31 March
was used as a vehicle for "peace" propaganda as well as for CTAL organi-
zational purposes, In addition to speeches on "peace", a resolution
reportedly was adopted to prevent the shipment of essential materials
to the US in case of ear. In order be bolster the waning CTAL strength
and to give greater force to its propaganda, regional CTAL committees
were formed. Nevertheless, the CTAL lost influence during the quarter.
Losses included the defection of the Colombian CTC as an affiliate; the
dissolution by the government of the Communist-dominated Venezuelan
petroleum federation; and the withdrawal of the Mexican Miners' federa-
tion from the Lombardo-sponsored UGOON6 which is affiliated with the
CTAL and the WFTU.
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Weekly Contributions,
(CIA larking Paper)
Situation Memorandemi 37.50
24-50 P* 2 .4?? 13 june 1950
Zn Montevideo, the prolonged strike of Communist wool workers and
the shorter sympathy strikes of truck drivers and port workers para-
lyzed the movement of wool to us markets for approximately three months
withholding an essential coranodity from US markets.
Trends
411?"Ifhe political influence of Comaunists continued in divergent trends
in the different Latin American countries with significant losses in
Venezuela, Panama, and Guatemala; and gains in Cuba, Chile, and Trinidad,
The Venezuelan government, largely in reaction to a Communist-
instigated petroleum strike, outlawed the "Red" Communist Party and
the Co=rurdsta.dominated petroleum labor federation and petroleum labor
unions, and also confiscated Communist Party property. The government,
however, did not outlaw the splinter 'Black' Communist Party.
In Panama, the president issued= executive order to outlaw the
Communist Party and all Communist activity. The decree, however, has
not yet been enacted by the legislature nor has it passed the supreme
court test of constitutionality. .
The loss of support of the major leftist party (PAR) by the Comma.-
nista in Guatemala may prove to be the beginning of a serious setback
to them in that countny. where a Communist Party is net legal. Commu-
nist influence, consequently, has emanated largely from a few individuals,
who have been able to identify themselves with the PAR. They have been
gradually gaining greater political influence through control of labor
unions, through active participation in political affairs, and through
support from certain key people in the administration. Early in Web
however, possibly because of disagreement about Communist propaganda,
a schism developed in the PAR and as a result ten Communists and pro-
Communists, including two important labor leaders, resigned from that
party..
There were also some minor Communist losses. /n Bolivia, although
Communist activity'was illegal under a 193$ law, a new law waspassed on
April outlawing the Communist Party and any of its subsidiary organi-
zations. Communist efforts to develop some political and labor strength
In Argentina and Mexico were more than offset by losses sustained from
continued anti-Communist government maneuvers in Mexico, and from out-
right repression in Argentina. In Colombia, the Communists lost labor
influence when the OTC withdrew from the CTL and WFTU and decided to
join the anti-Communist world and hemisphere trade union organizations,
Communists have made gains, an the other hand, in Cuba, Chile, and
Trinidad. The Cuban Communists have increased their Influence as a
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(CIA Working Paper)
Situation Memorandum 37'-50
24-50 - 3 - 13 June 1950
result of the collaboration with moderate conservative parties in the
recent by-elections and especially in the election of the Habana mayor
in which the Communtst-backed candidate won. In Chile, the Communists
have been benefitted by the political collaboration of Ibafiez del
Campo and thereby have slightly increased their political influence,
at least in sane sections of the country. In Trinidad, the Communists
revived the. West Indian National Party and may therefore be gaining
in strength.
......t=rILtinitm.p.m.upeProbablureevelomenta
mums po Influence in Guatemala may be reduced during
the coming quarter; in Panama efforts to suppress the Communist Party
will probably continue; in Cuba the administration may attempt to reduce
the strength of the Communists; but in Brazil and Chile during the per-
iod prior to the coming elections, the Communists may make some slight
gains, The political status of the Communists in the other countries
is expected to change little.
Conmunist labor influence is expected to decrease further in Mexico,
Venezuela, and Colombia, and also slightly in Chile. On the other hand,
in Uruguay and El Salvador, the Communists may further consolidate their
labor position.
The "peace" campaign is expected to continue, though no Hemisphere-
wide "peace" conference is expected during the next three months.
Organizational activities will continue with some minor successes prob-
able, Anti-DS propaganda will be slightly more 14mited than previously
due to closing of some Communist publications, though undoubtedly the
Connunists will find a way to continue such propaganda.
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