WEEKLY CONTRIBUTIONS(Sanitized), ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200020003-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 15, 2016
• Document Release Date: August 28, 2002
• Sequence Number: 3
• Publication Date: April 19, 1949
• Content Type: SUMMARY

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s`;eek1 y Contributions
CIA
19 April 1 ' 9
Of the developments reported on this week, the situation in Ecua-
dor (p. 9) merits special attention because, with the present critical
economic situation, any significant change in the present balance of
political alignments could very well have serious effects on the ad-
ministration.
CURD NT DEVELOPW ENTS
GENERAL: At the coming ILO conference three unscheduled controversial
issues are likely to arise (p. 2).
NORTITERN DIVISION: Cuba es Communist Party could very well lose its
effectiveness as a political party as the result of quarrels between
FSP leaders and militants (p. 2).' The Cuban Government is greatly con-
cerned over the renewal of gang warfare in that country (P. 3).
CENTRU DIVISION: R In Colombia inter-party violence continues? but the
array is considered able to prevent dangerous and widespread fighting
(P. 3). In Colombia there is a marked lack of confidence in the econo-
mic prospects for the immediate future, even though long--term prospects
are not unfavorable (p. !a). .Brazil's Communists have received a do-
finite setback as the result of government action to end Coi nunist-
inspired "peace conferences" (p. 5).
SOUTHERN DIVISION: In Paraguay, the election of bolas L6pez as Presi-
dent consolidates the position of the I)craocratic Colorado Party (p. 5).
Chile's trade with the US has been sharply curtailed, and its 1uropean
trade has been increased, because of dollar shortages (p, 6). Argentina
is expected to push the cause of Spain before the tIN (p. 6).
SPECIAL SLBJI'CTS
The Current Situation in 12. Salvador The Current Situation in Ecuador . .
DOCUMENT NO.
NO,,,GNANGE IN CLASS.
CLASS. CHANOFD TO: T S C
NEXT REVIEW DATE::
DAT,e!"
State Dept. review completed
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(CI.A Working Paper)
19 April lk3.9
1. t E73EFtAL: Serious Controvers1 Possible at condnrr ILO Conference
US res#s
n i IIe isphere soli ri173:-9-8-012-0-Very-
yr Gourd very well
be impaired at the Fourth Regional. Latin American Conference of
the International Labor Organization to be held in Yontevidco
from 25 April to 7 Lay? as it is likely that certain highly con-
troversial unscheduled issues will be interjected into the pro-
ram.
No serious controversy is expected from items on the
proposed agenda, which is limited to such primarily non-political
problems as (1) the Director General's report on industrialization
efficiency of labor force, training, and health; (2) conditions
of life and work of indigenous populations; (t) conditions of
e iployraent of agricultural workers; (14) adjustment of labor dis-
putes; (5) migration; and (6) the relationship between OAS and
ILO. Three controversial issues, of concern because they could
have an adverse effect on Hemisphere solidarity, are likely to be
brought up at the conference, however, even though they are not
.scheduled.
One such item is the reaction of labor ro~.ilas to the
military juntas. This problem is'likely to arise if worker dole--
gates challenge the validity of credentials of worker delegates
from Peru and Venezuela; it may be side-stepped, but not solved.,
if Peru and Venezuela do not sand labor delegates to the confer-
ence, since, even in the absence of Peruvian and Venezuelan dele-
gates, the issue could be brought up and referred to the governing
body of the ILO. If Peru and Venezuela boycott the conference
entirely, this action could to some extent weaken the ILO.
A second controversial issue likely to appear is the
problem of racial discrimination in the Panama Canal Zone, The
airing of this problem could provide anti-TJS elements with a
handy propaganda tool even if the AFL delegate is able to point
out some progress toward amelioration of' discrimination.
Still another problem is the possibility of a clash be-
twreen pro-Peron and anti-Peron elements at the conference. As
there is to be a very large Argentine delegation -- evidence in
itself that Peron expects to have his labor views vigorously exb
pressed - the formation of an anti-Peron' bloc may be expected.;
acrimonious debate between the two blocs could aggravate existing
antagonisms,,
2, CUBA : Communist PartrS :l.it Possibly in the 1Saking
AA possible Crxru'nis Pa &y (I rift o xy v lop over the
position of the Party in the event of a US-USSIR war, The diffi-
culties of the leaders stem from the fact that (1) positive ad-
vocacy at the present time of help for nussia and sabotage during
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(CIA Working Paper)
19 April 1949
a war would weaken further the already diminished political and
labor power of the Party; (2) only an estimated 20,000 of the
Party's 155000 members now favor support of Tiussia in the event
of a US-USSTl war; and () sabotage activities that militant Corr
munists would be ordered to execute in the event of viar would
lower the Party's prestige among enough members to destroy it as
-a political organization.
The "old guard" under the leadership of I3las rota has re-
cently avoided a showdown over the issue of aid to ''ussia. The
statement of support recently issued after a serios of talks
among municipal, district and national leaders was so mild as to
be little more than lip service to international Communism rather
than an aggressive statement of behalf of "oscow. Subsequent
international developments could, therefore, conceivably divide
the militant Communists from the majority of Party members and
thus destroy it as a popular political, party.
3w Tienewal of Gang . rfare
Just.ci 7`uc-.nNes,'Jire; 'rESident of the 'highly influential
FEU, a semi-autonomous student organization, was fatall,; shot on
a downtown Havana street on 2 April 19)49, Fuentes, an active
rre:aber of the UIIR __ on inally a student group but now a gang
of brigands who cloak criminal intent in ideology-: and propaganda
on behalf of political issues was probably murdered by the UST,
a rival group dominated by student :gangsters and militant artarch-
ists. This was the ninkh -a try murder in the last six months,
.any Cubans fear that it presa, es the reopening of lane-scale
gang warfare. The Prio government is especially concerned over
Fuentes' killing because he was an. active and respected member of
the FEU, upon which the government depends for so much of its
student and youth-roup support, TheREU has demanded that Presi-
dent Prio move to punish. ;ainst then..
V hile the "''anifesto for the Preservation of Peace" which
heralded the beginning of the campaim bore the signatures of
many prominent non-Communist politicians and journalists who
have lent themselves to other Communist-sponsored movements, the
absence of military support was noticeable from the start, The
campaign, in fact, has not appealed to the patriotic and national-
istic feelings which gave the Petrole wn Defense centers their
Corce, The publication in ':arch of a manifesto si~nod by Luiz
C;7rlos Prestes and four other top Brazilian Communists (all of
whom are in hiding;) declaring; that they would never take up arms
against the Soviet Onion, but vmuld "take up arms, should it be
necessary, against the oppressors of our people" may have helped
to crystallize non-Corarrninist opposition to the "-peace" movement
by directing attention to its origins, and early this month the
non-Cor,,mu-list press started a campaign against the movement, de-
nouncing it as an instrument of Soviet policy.
7.
711kly for 22 Lar L9). ..'olas' success, howeverprobably
falls short of his ambition, since his present position carries
with it only the prestige and not the power usually accompanying
the office. His continuance in office largely depends upon the
extent of his cooperation with the Democratic Colorados, who
PARAGUAY: The elction of aril of ,r. -el" Jolas Lopez,
unopposetc :olorado party candidate for i re s,~ dent,
really consolidates the position of the `.,er:?rncratic Colorados in
the government, althour h it technically i;arks the successful at-
tainr!ent by Colas of the position to which he has at pired since
i.ovember 1447. wince that date "olas, a leader of the militant
faction of the Colorado Party, has fi aired nror:rinently and has
improved his position in every political maneuver. His election
became a certainty when he broke with his political partner,
L berato 1ioddguez, formed a coalition with conservative Demo-
cratic Colorados, and became the only presidential candidate
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(CIA Working Paper)
19 April 1,949
have emerged as the real power in politics and in the armed
forces, If they maintain their present strength, they will. be
able to implement the democratic measures which they have pro-
mised, and to restore tranquility and relative stability to the
country, The recognition of the Nolas regim by the Us. Argen-
tina and &azil has provided additional strength to the Demo-
cratic Colorados,
S. CHU , r US trade with Chile is being adversel affected by
~e s o ar s ortaue an i can Government's
policy of encouraging the use of soft-currency earnings to pay
for Chilean imports, Since Uuropean countries are unable to pay
in dollars for substantial amounts of copper, nitrates and other
products obtained from Chile, that country is accepting payment
in terms of their monetary units and thus is in receipt of con'-
siderable soft-currency exchange. Chile's diversion of many pur-
chases to soft-currency countries to use these soft"eurse:ney
earnings has contributed to a sharp curtailment of orders from
the US,
9. AfGENTIMA: Position on.-Spain in the UN
cation to a US U2 representative "to save the 'L'S any embarrass-
ment" by taking the lead in introducing a motion for the resump-
tion of ambassadorial relations with Spain was evidently calcu-
lated to take advantage of any division in LS opinion on the
matter by (1) renewing Argentina's bid for leadership of the pro-
Spanish tin American bloc, (2) maintaining the appearance of a
desire to collaborate with the M.
The Argentine representative's further statement that
Spain must eventually be admitted as a member of the Atlantic
Fact as well as to UN technical a:~encies is an indication that
Argentina mill adhere to its customary role as Franco's leading
advodate despite recent Argentino-Spanish differences on corrmmu;x-
ci.al affairs,
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'weekly Contributions,
(CIA v7orkin; Paper)
Situation L.'emorandur.- 219
19 April 1949
The Current Situation in El Salvador
The situation in El Salvador has continued to develop along the
lines indicated in ~Situation T'enorandur:i 3-49 (1 Feb 49).
Constitutional government, based on free elections (one of the
basic objectives of the December ] .G~a revolution), will probably not
be realized for another year. The draft constitution will not be ccnr
pl ted until fall, and the Constituent Assembly may not be called until.
t.e 1949 or 1950. In the interim, L jor Oscar Osorio will remain .. .
dominant figure in the government.
Partisan political activity, in the absence of a state of siege,
id at a high point, though 0sorio (who believes in maintaining a show
of unity and cor.?nromise in the -overnin;, junta) has cautiously avoided
committing himself in favor of any particular party. flevertheless,
conservative elements, both civilian and rii,litary, are engaged in an
organizational campaign on his behalf, and possibly at his instigation.
They feel they will be able to win the support of the former followers
of reactionary Colonel Osmin Aguirre, General Pena Trejo, General ;-'.s-
pinola Castro, and other conservatives. The moderating i;V'luence of
the Osorio-dominated junta in the recent strike threat against the
International tAilways of Central America, and Osorio's statement (for
the junta) that S1 Salvador is not prepared for, and not large enough
for, a labor code, indicates that the government will compromise cer-
tain liberal goals. Opposition to 0sorio may therefore be expected to
increase amon leftists, but it is unlikely; that their opposition can
influence junta policy. At present, there is no one powerful liberal
or leftist party. The Comr11unists, as are all -roues,, are currently en-
gaged in an intensive organizational caripai-n. Althou-h their slight
influence may be increasing, they will probably not Bain control over
the country's most important labor union --?- the i.ailwny ?;or! crs.
The economic situation should ranain favorable. The l-L4'9 ;;udget,
now coripleted, calls for government expenditures of 2,)47'C,000 --? al-
most as much as last year's record budget.
The government is now socking to improve the arry and air force.
A special :Cnglish language course has been planned to facilitate ")Lure
training of officers in the US, and a Salvadoran purchasing co;rmission
is currently in the I'S buyin, trainin ~ planes and other e ?u.ipnent.
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(CIA Working Paper)
Situation I.Temorandum 21-49
19 April 11) h9
In the field of intnrnationel relations, Salvador is illustrating
its desire to r~aintain the goad will of the US. It has earmarked about,
.:1150,000 for payment on its lend-lease accounts it faithfully supports
its raprosentatives on the Lfl Korean Corimissi n; it has named observerk
to the Arniency Conference of fl/-T`I", It appointed a deleo-ate to thp Fourth
Inter-Ai erican Radio Conference
The governmcn is continuin ; cooperation with the US
through a joint agricultural cxperiment station, through support of US
mii tar'y and ground missions, and aid to a field party of the Health
and Sanitation Division of the Institute of Inter-American Affairs. It
has also naiad delegates to the Second Session of the Commission of the
Census of the Americas of 1`,0. in the recognition of Venezuela, 1:1
Salvador has followed the US lead, the? t 7Ys not without the "proper"
amount of hesitation. US ini`luence aside, it has also t4i.ven indication
of the Central American liberal ideals through support of Cuat}:?raala es
claim to Belize.
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Situation .'einorandum 22-49
The Current Situation in Ecuador
19 Jspri1 1949
(Surrrma : The most serious problem facing Pcuador
to,-ay is its worsening economic situation which, to a
growing extent, is making the overnmont of that coun-
try more vulnerable to those forces opposed to Presi-
dent Galo Plaza. Itt this tire, the political opposi-
tion groups checkmate one another, but certain military
groups, that are more unpredictable, may upset the
present balance by a shift in support. Communists are
active and a potential source of trouble in any emr-
gency, but are at present ,under control. In interna-
tional policy and activity, Ecuador is less inclined
to follow US leadership in Hemisphere than in extra-
Hemisphere relations.)
Economic conditions in Ecuador are critical and constitute the
foremost threat to the government's stability. The nor::aal constriction
of trade and credit this time of the year has been accentuated by other
factors: the unusually tight credit situation ree-,ltin- from over-
extended credit and the lack of credit resources; business apathy due
to the reluctance of buyers to place orders (as they anticipate lower
prices and a relaxation of exchange controls); and a deterioration of
the textile industry (due to excessive stocks which will not move be-
cause of their poor quality and high prices).
The econonW of the country is basically a _?ricultural. tiny decline
in world prices for rice, cacao and coffee adversely affects Ecuador's
economy, since the export sales of these commodities are the most i:ap-
ortant sources of ouadorts foreign exchan!vo. The feelin: is prevalent
in Ecuador that world prices for these products decline. LLealizing
that agricultural diversification and increased efficiency are vital to
any improvement of ?,cuador's compoti tive position in the world : arkct,
President Plaza has atterlpted to inalrmwuratc a lon?-ran,_e prod;r7n of
agricultural development based on a liberal system of ..overn,Vio.:t loans
and the introduction of new products and modern methods of production.
Ser~ous labor and economic difficulties, however, have interfered with
the implementation of his program by forcing, the President to concentrate
his efforts on currant economic problems rather than upon his long-
range development progran. In an effort to resolve the countr2r's present
economic difficulties, the President is taking measures to relieve the
tight credit situation, expandinc the operations of the Production P.ev--
elopr.nt Institute, and implementing the tariff restrictions on the
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(CIA ':orking Paper)
Situation -emorandura 22-4c)
19 April 11);q
importation of textiles. Thus far, these measures have. not succeeded
in alleviating the situation to any appreciable extent. Although agri-
cultural credit is freer, commercial credit is still ti,-ht and there
is a general feeling of caution and apprehension.
The political -maps which menace the stability of the Plaza ad-
ministration are rendered ineffective by their mutual suspicions and
fears that an overthrow of the present government might resnnit in
placing a rival group in control. The Conservative.; Party has shomn
the least opposition to Galo Plaza. This umy be explained by its ap-
parent satisfaction, for the time being, with its control of a few
strategic political positions (such as the vice presidency and comptrol-
1 ~,>hip of the Treasury), and its traditional antagonism to the rrili-
tary . The Socialist Party has characteristically and systematically
been the least cooperative and the most persistent in its attacks upon
the Plaza administration, The Socialists are using harassing; tactics
in the hope of forcing the President to take ill-considered and preci-
pitate action. The Liberal Party,, on the other hand, is consolidating
its strength at every opportunity. The recent appointment of the
strong Liberal of exceptional ability, Dr. "duardo Salazar 00":rez, to
the key position of ;: inister of Government will ingtirove this party e s
prospects for success in the next presidential elections. Colonel
Carlos :?ancheno was recently appointed leader of the radical :ving of
the Liberal Party of the Province of Pichincha. Although these element
of the party does not appear to have any substantial stron ?tb at pres-
ent, the appointment ic more significant than nit-ht be the case other-
wise, since :'ai.cheno is linked. with subversive activity in the art..
The military groups also checkmate each other. Subversive acti-
vity led by Colonel Carlos ;'ancheno and Lt. Colonel Cesar Alfaro appears
to be a
t f
th
par
rom
e subversive movement of a leftist character among
the enlisted Tien. It is not possible, however, to predict with cer-
The, Communist Party is taking advantap_e of the present economic
crisis by agitation among the vr. rkers and by actively participating in
strikes. Fortunately, the adninistratiorl has been able thus far to
cope adroitly with the strikes as they occur. The Coraiiu rist policy at
present appears to be that of harassin- the discreditiri r the administra-
tion short of forcing its overthrow. The Communists are reported to
be under orders not to precipitate a revolution at this time out of
fear that such action would brim- the ri,,htists into power. The party
is increasing its organizational activity in order to revitalize and
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Situation I.:emorandtn P2-49
19 April 1949
r, rengthen its position with labor and with rnerhers of the arrnd forces,
In atterptin' to rein control of the labor syndicates, the Communists
will have to meet the opposition of the Socialists who have succeeded
in reakenjng; the authority of the Conmuriists by talcin` over the national
offices of the ?~cuadoran Labor Confederation, The Socialist president
of the confederation has stated that there will be no general nation--
oti.i.de strike until after 1 "ay, when the next confederation elections
t ilce place. This, however, will not lessen the a,-itation am on- the
rx&rkers, since the Comr:iunists will hake strong attempts to maintain the
lnoorers l state of dissatisfaction to better their chances of
.' : rtzrl of the confederation in these elections.
rurrdarnentally the Plaza administration is very friendly to the US,,
and the L?S could rely upon ':e;.rador's support in vital international
situations, In matters of US interest visa'-vis the other Latin American
countries, however, _)cuador is more 1iikeI to Zro 'alon., ? with the r a Jeri ty
of the Latin American countries, .'or example, cuador has indicated its
vd.llinVness to support Aunt ::bale's claim to elize, It Is expected that
Ecuador will do so in a passive mariners There is a definite development
of a closer spirit of ^ooperetion with Joolo: bia. strerr,~theni--:^' of
trade ties has already been announced, and a military a reer:;cnt as a
means of defense in case of ag -ression from Peru is a further possibility.
Informal discussions alon,-~ that line have already been reported.
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