WEEKLY CONTRIBUTIONS LATIN AMERICA BRANCH, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200030013-3
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 10
• Document Creation Date: December 9, 2016
• Document Release Date: September 28, 1998
• Sequence Number: 13
• Publication Date: September 27, 1949
• Content Type: SUMMARY

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'.'.'eekl.v Contributions
Latin America i anch, ?, CIA
27 September 1%9
CURRENT DEVLLOK IrTS
GENERAL: Latin American responses to the A-bomb announce, nt are expected
to have no adverse effects on any important US interests in the area (p. 2).
C T R A L DIVISION: Colo.;bia's government, by authorizing" more than one
labor federation, has advanced its camraiL-n against the Oommin .st-led
Colombian Corkers' Confederation (p. 2).
SOUr(IMI ?1 DIVISIOU: In Uruguay, neetinV3 of the 15th Con-;Tess of the Com-
munist Party are not expected to have significant effects (p. 2),. In
Argentina, present political conditions indicate that US oil companies
can expect no relief from ;-,overnment restrictions (p? 2).
SP ?:CIAL SIfl3J CTS
The Current Situation in Haiti . . . . . . . . . . ? . . . . . . 4
The Current Situation in Argentina . . . . . . 7
DOCUMENTNO._
HANGE IN CLASS. 11
DECLASSIFIED
CL SS. CHANGED TO. T'3 C
NEXT REVIEW DATE:
ALITH. HA 7 e) 4P
DATE:/ `ISO ~ REVIEWER: 372044
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,weekly Contributions, B/LA 27 September 1949
(CIA Working Paper)
1. J NER/ L: Latin American Iles onuses to A-bomb Announcement
F.ar1y -and still incomplete reports of non-Communist re-
actions in Latin America to President Truman's announcement of the
Russian atomic explosion provide no evidence of changes in attitude
that would have any adverse effect on important US security or
policy interests in the area, nor is it expected that there will
be any considerable effect.
There was no reported instance of prompt Communist press
response, undoubtedly because instructions on how to exploit the
incident as Party propaganda had not been received.
2, COLOMBIA: The government's campaign against the Communist-led
Colombian Workers Confederation CTC as now been
further advancer r a scree aut orizing o icia recognition of
more than one labor federation in Colombia. ."Iithout waiting for a
decision on its suit to dissolve the CTC (B/IA Wkly, 13 Sep 49),
the administration is expected shortly to recognize the Church-and
Conservative-sponsored Colombian ":orkers' Union (UTC), a growing
rival federation. The administration's willingness thus to anta-
gonize the CTC clearly indicates a new feeling of strength in the
Conservative Party since, in the past, no serious consideration was
given repeated UIC requests for recognition because the Liberals,
whose cooperation was needed during the period of national union
government, opposed that organization. Granting legal recognition
to the UTC would improve the Conservative Party's prospects for
political success by enabling it more effectively to refute charges
of being opposed to organized labor.
3. URUGUAY: The 15th Congress of the Uru n Communist Part al-
ready postponed twice this year, is now sche a for 30
September, at which time a report providing for substantial im-
provements in Party organization is to be discussed., No significant
effects on US security interests are expected to result from the
meetings".
4. ARGENTITAI: Difficulties of US Oil Companies in Argentina Increased
icu es o U ail companies in Argentina have irr-
creased to the point that the companies believe government policy
toward them to be "confiscation by attrition".
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!111 , U11 1 11 hl,
ee ?'.y Contributions, E3/IA. A. 27 September 1949
orking Paper.)
The State Clil Fields Admrinistration (YPF'} has avoided
!nfird].n? a concrete policy ~Vit c respect to the future of foreign
to cripple the operations
sii. companies - it continues, however,
o, he US companies. The latter have been denied quotas for dir
et isaportat5.on of c1-!de under the UK-Argentine agreement, and
;r,ve been denied dollar exchange for essential imports from the US.
the situation now stands, the only way W3 refiners enn obtain
t;+icir crude requirements is to purchase it from YPF at 22 to 37
percent naartcup with no assurance that the sales prices of mane
iactured petroleum products can be increased accordingly. F"urther-
z re, a deaf ear has been turned toward requests of the US conr-
panies for dollar exchange to import necessary blending oils,
equipment, and maintenance materials f rove the 05. While Argentina's
shortage of dollars limits possible allocations, the government
has recently increased dollar allocations to YPF and has provided
none for the US companies. (At present there is no indication of
the British. Shell Company's modus vivendi with YPF, but its posi-
tion is more advantageous because of - I ritish leverage.. There has
been no change in the government's stand against granting addi-
tional drilling concessions to private producers, and, conseq?mnt?
ly, their production continues to decline, Because the two prin
acipal US oil corripanies operating in Argentina are engaged mainly
in refining and distributing (one of them produces a small part
of its crude requirements locally), they are vitally dependent
on YPF" allocations. The US companies believe that the roverauznent
is following this course in order to allow YPF to improve its
position at the expense of the private refining and marketing
organizations, and that continued repressive measures eventually
will compel them to withdraw from Argentina. The government has
+;arefuliy avoided direct reference to application of the national:
-l.zation program to the petroleurn industry ----- quite possibly it
has been decided to delay this step because of concern regarding
the development of fuel resources, Opposition parties, however,
are calling attention to this part of the nationalization program,
and are putting it to political use against the Peronistas. The
opposition has charged. the administration with "obeisance to
North American representatives" and has claimed that importation
of petroleum by foreign companies, as provided by the UN-Argentine
agreement, is against the basic principle that YPF should import
all petroleum products; that it is also against the spirit of
Article 40 of the Constitution; and that the only solution is na-
tionalization and monopoly.
The government's fear of the political. effectiveness
of these arguments may very well result in further deterioration
of the position of the US oil companies in Argentina. The with-
drawal of these companies mould be adverse to US interests as it
would lessen further the already dim prospects for efficient dev-
elopment of additional petroleum reserves in Argentina.
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{ EX33TFT
t1eeldy Contributions, B/Lt
(CIA 1+orking Paper)
Situation Memorandum 5449
The Current Situation in Haiti
27 September 1949
Summar~t --- The political situation in Haiti is calm. A rise
in the value of exports has balanced Haiti's foreign trade,
but the fiscal condition of the government remains adverse.
The armed forces are loyal. to the government. Communism
plays a minor role. Friction with the Dominican Republic
persists,, but Haiti is studiously avoiding complicity in
anti-Txrujill.o plotting.
.- US security interests are not notably affected
by current developments.)
Poltica1
Me-situation in Haiti now is calm. The Estime regime, however, is
faced with the problen of whether or not to lift the state of siege in
effect since the three-day "general walkout" of last I.;arch (]3/IA Wkly, 9.
,Par i 9). If full. civil Liberties are restored, opposition elements will
be free to expose the administration's shortcomings in the campaign pre-
ceding the January 1950 elections. If the state of siege is not termirr
ated, the government fears US tourists will. not visit the International
position, scheduled to open this December. B/Ids estimates that the
Government, because of its stake in the success of thee, position, will.
lift the state of siege in the belief that the arnor can control the out-
come of the elections.
The President is anxious that members of the Chamber of Deputies
scheduled for election in January be as tractable as the present ones,
since he plans to seek legislative approval of several constitutional
amendments, one of which -cril1 permit the President to succeed him elf.
Although it is reasonably certain that the army can manipulate the elec-
tions in the administration's favor, a falling out betvmen Estime and
the powerful Commander of the Military Department of the Palace, Colonel
Uagloire, could upset these calculations. This is regarded as unlikely,
however, because Esti is fully aware of iagloire's power and probably
vwill avoid antagonizing him.
Economic
We trend during 1948 toward an increasingly unfavorable trade bal-
ance has been halted. For the first six nrsnths of the current fiscal
year, imports and exports were balanced at P16.5 million each, whereas
SEC
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.;F MET
' ontributions. B{LA
ikdv` `n Paper)
2'1 September 19L 9.
9L7 Lg fiscal period imports were $3.6.6 and ex-
.,.. l_)_Ion. itltho, ,h sugar production was 4 percent greater
euiFf; fiscal year. (The Haitian economic outlook depends on the
arkei -n-rice of 'U)ese tvo cer. iod;i.tias, Although sisal operations
f7xports (iz' ei: al and coffee increased in value by 39 percent
respecii%ra.iltiv in comparison with the first six months of
=,
-1-7. -,,satiably be moderatei ' curtailed because prices and demand are drift-
bl
f
e
avora
Wr, the disposition of the bumper x-949 coffee crop at
pi ;.3u seems assured.
The fiscal position of the government, however, continues to be ad
s;erse (B/IA 1ikay, 12 Apr );.9). The Treasury deficit as of 31 July Vas
,!,,J20,000 and is increasing by `$200, 000 a month. The nz+r h? ch
has e;Yhausted other sources of revenue,, is now seeking to persuade forei n-
uiined concerns to buy the unsold portion ($3 million) of the 1957 bond
issue so that it can continue construction of the position.
The uncontrolled spread of leaf-and root diseases has reduced banana
production more than 60 percent below the 19).i6 level when it was Haiti's
. ccond export crop. Since it is unlikely that the government will take
_gos?ous steps to eradicate these diseases, the banana industry can be
erected to cease to be an economic factor by 1951,
-,.u_e-1 ,Fa
able ofJmaintainint law and order in the capital and larger toms. The
operational and admd.nistrative efficiency of the small coast guard has
been enhanced by a recent change of commandants and will doubtless be
further improved by the US naval mission which is expected shortly. The
argr is not big nor mobile enough, however, to control widespread dis-
orders such as could occur at election time, or to repel the landing on
the outlying coasts of even a few hundred Caribbean Legionnaires who
might seek to use Haiti as a base of operations against Trujillo.
Subversive
has been no increase in the influence of Communism in Haiti,
The local Comunist party is unimportant. President Jstime has recently
relieved tyro liaitj an diplomats of their posts in Iiurope because of their
1 sown Communist sympathies.
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-; Jeeki 7 Contributions, i3/LA
CIA orking Paper)
'tuation IAe*'io andi m. L9
.
7 Sep cer 1949
nUrnationai
with the Doriini.can It,.c-plibl,c continues to be Haiti's major
itcternational problem. The Dominican failure to appoint an ambassador
u ince the recall of Brea Messina last spring and the continued residence
In Ci,xdad Trujillo of Colonel Roland (B/LA Wkly, 23 Feb 49) are sources
of irritation. The government? despite its desire to see Trujillo over-
-thrown. Yrill probably avoid implication in anti.-Trujillo plotting because
fears the Dominican Republic's overwhelming military superiority. The
Haitian Foreign Lini,ater has requested. US cooperation in averting Tru jil3_o's
retaliatory measures should Haitian neutrality be violated.,
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Veekly Contributions, B/LA
(CIA Working Paper)
Situation 1:temorandum 55-49
The Current Situation in Argent a
27 September 191.9
(Summa - The stability of the Argentine Governnzent has
improved as the result of the assumption by Peron of per-
sonal leadership and initiative in the economic field and
the adoption of measures that have pleased the arty. Basic
economic problems persist, although the Argentine program
for economic readjustment does emphasize several features
which are practical and desirable from the US point of
view. There has been little change in the subversive pic-
ture. The armed forces are militarily in good shape, and
the possibility of military action against the government
has recently become less. Anti-Argentine feeling has in-
creased in neighboring countries; the shift in foreign
ministers does not mean a change in international trade
policy.
- ')haring the last four months the total situa-
tion with respect to US security interests has improved.
Although Hemisphere solidarity has been impaired by neigh-
boring countries' allegations of Argentine support of the
?IINR revolt in Bolivia, prospects for the stability of the
government have improved, the likelihood of increased
authoritarian measures on Peron's part to maintain himself
in power has diminished, and the replacement of Foreign
Minister Bramuglia has not so far been followed by relaxa-
tion of efforts to improve international trade relations,
particularly with the US.)
Political
eron's reassertion of positive leadership during recent weeks has
perceptibly strengthened his administration? and various measures taken.,
though they have not removed the underlying economic causes of threats to
stability, have ameliorated specific situations and have done much to
lessen the army disaffection that four months ago (B/LA Wkly.. 31 Uay 49)
was one of the dangers to the Peron regime.
Peron's strong demands at a July Peronista convention for party loyal-
ty and regularity - demands that were accompanied by threats of discip-
linary action -- demonstrated his renewed determination to remain in con-
trol. his intervention in the cabinet conflict between nationalist
prot;ggs of Senora Peron and the more internationally minded adherents
of ore gn ,.mister 13ramuglia (see International below) was favorable
for the expansion of foreign trade -an-a the array, as did his
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eekly Contributions, B/ -- 2 -- 27 September 1949
(CIA Working Paper)
Situation 1:emorandun 55-.9
public veto an grounds of econoir ' of a 70 million peso appropriation for
Senora Peron's social welfare foundation. The administration's intensive
campaign, conducted through the government dominated labor unions, headed
off some demands for inflationary wage increases which were otherwise to
have been expected following removal of coat-of-living subsidies on meat
and other items. Strikes have been declared illegal with increasing fre-
quency recently.
Because of these improvements in the situation, VIA now estimates
tha5- there is no immediate likelihood either that Peron will be removed
or retire or that he will be forced to resort to conspicuously authoritar-
ian measures to maintain his control.
Economic
Some improvement in the economic situation has been made by assurance
of fuel supplies from the US and by provisional settlement of the meat
packers' difficulties. Also, prospects for grain exports are slightly
improved (total grain acreage remains about the same). However., basic
economic problems persist. The economy continues to suffer from an ano-
malous credit situation, inflation, and a low volume of foreign trade.
Official use of credit continues to expand the money supply, but private
enterprise is hampered by lack of credit facilities. Although the trend
of inflation continues upward, shortages of industrial requirements, high
wages, and restriction of private credit are beginning to be reflected in
unemployment and some decline in business activity in certain sectors of
the economy. Numerous bilateral trade agreements have been signed during
the last three months, but since all are subject to agreement on price,
expansion of trade will depend on Argentine adjustment of Its inflated
price level and willingness to accept imports in greater volume, both of
which are technically and pcli.tically difficult of achievement.
The current Argentine policy of expanding trade with the US and the
exchange of views within the Joint U5 Argentine Committee, established for
that purpose, may lead to implementation of salutary domestic economic
reforms in Argentina. E',ecently the government has taken some steps in
this direction, such as the removal of certain subsidies., provision for
loans and higher prices to farmers and stock producers, attempts to cur-
tail wage increases, modification of export prices and exchange rates on
certain it+cros, and curtailment of the powers of the State Trading Agency
(IAPI). As yet, however, these measures have been neither extensively nor
vigorously implemented. ":ith world prices in some cases below the govern-
ment support prices, attainment of a competitive position in world trade
8.
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Weekly Gontri.ouf:jons.' / k
(CIA Working Paper)
Situation iiemoraxadum 55-49
3 .. 27 Septeer 1949
will be difficult And will reQuire further modification of exchan. e
rates. Despite current official denial3 of possible devaluation of the
Argentine peso, after a brief Period the government may be expected to
widi.,r exchange rates at least for certain exports. Since other coun-
tries have taken the lead, selective devaluation is now more politically
easible. Also, the recent removal of gold backing for the currency
may be a preparatory step.
subversive
The government's ants-Coimnunist measures continued to be carried
"'a' -.luring the summer? Federal police refused permits or cancelled
issued permits for Com?ninlet-inspired gatherings allegedly staged in
support of world peace in several provinces. Communists found it in-
,rea.singly difficult., and often impossible, to obtain permits to leave
and re-enter the country. General amnesty to all aliens illegally in
Argentina was authorized by the government and provisions were made for
these individuals to regularize their status. The decree may be a
police measure designed to smoke out Communists. The effect of this de-
cree upon "war criminals" 't a number of whom are allegedly in the country
illegally, will depend on the personal influence of the individuals with
Argentine authorities. ",,Ihile Germans and other fascist technicians con-
tinued to enter Argentina, and, in most instances, to be employed in the
military ministries and military factories, there appear to have been no
concrete indications of organized subversion among the now -subs tant3al
number of these individuals.
AyLt_aar
! igadier 3eneral Franklin Lucero, Subsecretary of the Arry and an
admirer of the US,, is expected to become L;inister of the A a
now held by Defense Lilnister Sosa Molina in an acting capacity. Poe effi-
ciency, ffquality of manpower The and morale continue exceptionally high by
Latin American standards (]3/LA Wkly, 31 Lay 49). Under the 1950 budget
estimate,, the appropriation for national defense is increased 25 percent
to 17 percent of the total. The threat of direct military pressures or
action against the regime has been considerably reduced during recent
months. Army loyalty has been strengthened recently as Pero
n has assumed
leadership in the economic field and has emphasized methods calculated
to appeal to the military.
International
S 'xn~erest in Hemisphere solidarity was adversely affected by
Chilean, Uruguayan, and Bolivian charges that Argentina supported the rl
revolt in Bolivia although as yet there has been no convincing evidence of
WW_ 9.
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'Weekly Contributions, B/IA
(CIA Working Paper)
Situation Memorandum 55-x49
27 September 1949
argentine participation. The new Argentine Foreign Minister, Jesus Paz,
azpbasized that his country's policy was one of non-interference in the
affairs of other countries and that steps were being taken to guarantee
the observance of this policy. Relations between Argentina and Chile
were temporarily strained as a result of Argentine press and radio at-
tacks on President Gonzalez Videla and the Chilean Government's harming
of the recent strikes, there. The attacks were instigated by Senora Peron
presumably for vengeance on the Chilean delegation to the Buenos Aires
c'.anferenoe of the Inter-American Commission of :Women that opposed her
campaign for chairmanship.
Peron' a removal of Foreign Minister Bramuglie in favor of Senor Paz
cut the ground from under the serious cabinet controversy between Bra-
muglia's internationally minded adherents and the obstructionist rate es
of Senora Peron (BOLA Wkly, 31 May 49). But this shift evidently not
signal ary* sharp change in international trade policy, as there has sub-
sequently been impressive evidence that Bramuglia's program for improved
trade relations, particularly with the US, will be vigorously pursued.
Pursuant to efforts to improve trade relations with the US, Argentina
added two important officials of the Ministry of Economy and the Central
Bank to its staff participating in the Joint Argentine-US Commd.ttee.
Regular payment of commercial debts in the US continues, and recently the
percentage of dollar earnings allocated to this repayment was raised from
20 to 30 percent, Since signing a trade agreement with the UK in late
June, Argentina has signed trade agreements with Norway, France, Peru,
and Czechoslovakia, and has completed preliminary arrangements for agree-
ments with Japan and Paraguay.
Argentine representation on the UN Security Council having expired,
that country is officially a candidate to replace Venezuela on ECOSOC.
If Argentine fails of election to ECOSOC, it desires to replace 1 exico
on the Trusteeship Council,
10.
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