WEEKLY CONTRIBUTIONS 30-50 LATIN AMERICA DIVISION, ORE, CIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200050030-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 13
• Document Creation Date: December 12, 2016
• Document Release Date: May 7, 2002
• Sequence Number: 30
• Publication Date: July 25, 1950
• Content Type: PERRPT

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g42.24E.g2P1TgAltion_P.5,9759
LatifiTaiii155-nlirisior4-ORETOIA
25 July 1950
D/LA believes that two developments in connection with Latin Ameri-
can presidential races merit particular attention this meek: the item
on the probability of violence in the Guatemalan campaign Cp. 2) and the
article on the implications of an effort by President Alen to succeed
himself in Mexico (p. 5).
CURRENT DEUICRIENTS
GENERAL: The reopened question of a seaport for Bolivia has not roused
the usual storm (p. 2).
NORTHERN AREA: In Guatemala, Lt, Col. Arbenz is losing ground in the
presidential race and may rely more on strong-arm methods (p. 2). The
Dominican Republic appears to be making a genuine effort toward improved
relations with its neighbors (p. 3).
SCUMERN AREA: Prolongation of the Argentine port strike could compli-
oate US-Argentine relations because of the interest of TE unions and the
International Transport Workers' Federation in it (p. 3).
SPEC/AL SUBJECTS
Possible Crisis in Mexican Political Situation . ? ? . ? 5
The Current Situation In the Netherlands Antilles 7
The Current Situation in Bolivia 10
DOCUMENT No.
CHANGE IN C?LAS8. fil -----"'-'"'"""""'"""
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CLASS. CHANCED TO: TS 3 0
NEXT REVIEW
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Weekly Contributions, D/L, 30-50 25 antity 1950
(CIA Working Paper)
1. GENERAL: Bolivian q2uprt stion Mks to 05asieStorm
1674"Wition 12-7 n seaport on Trirricific seems to
have entered a new phase. It is not clear just how the matter was
reopened, nor what will develop. Preliminary statements, however,
are noteworthy because of the absence of the violent protestations
by Chile or Peru, against "invasion of sovereignty" that have appeared
previously each time this recurrent question was raised.
2, GUATEMALA: Arbenz Los Ground in Presidential Race
con o mon s edta-E6FTWAY631 prospects of
Lt. Col. Jacobo Arbenz,presidential candidate of the Partido Acci6n
Rovolucionarla (PAR) and the Partido Renceraciiin Nacional (PRN).
Arbenz, who has relied an the support of a erifieda militant, Com-
=mist-led labor movement, is now faced with the possible defection
of Communist leaders. The Comma:nista have withdrawn from the PAR and
have formed the Partido Revolucionario de Obreros Guatemaltecos (PROO).,0
a virtually undisguised Communist labor party mbloh is apparently
waiting further proof of Arbenzl sincerity before officia14 endors-
ing his candidacy. Arbenz, In turn, appears to be suspicious of the
loyalty of the Communists, as suggested by the formation, under PAR
auspices, of the ConfederaciSn Nacional Campesina LIG Guatemala which
is bitterly opposed by the rival Ccemunisteled Confederaci6n de
Trabajadores de Guatemala and by the formation of a newpweekrbenz
labor party, the Partido Revolucionario de Alianza Campesina? which
may sap the support of the PROG.
Coinciding with this drift away from Arbenz on the part
of the Communists has been a marked increase in the activity and
strength of the Conservative opposition0 In order to meet this Con-
servative threat, certain pro-aemeistration congressmen have issued
a call for the unification of all revolutionary parties (the PAR, the
PRN, and the large Frente Popular Libertador) behind a common candi-
date. Should such a unification be necessary to forestall a Conserva-
tive victory, Arbenz (with his controversial Coumuniet connections and
record of political assassination) would almost certainly be discarded
in favor of the more moderate Giordani (the FPL candidate) or a new
candidate such as Colonel Victor Sandoval, now chief of police, who
might have firmer army support than any of the current candidates,
Because it is popularly believed that Arbenz is deter-
mined to gain the presidency by fair means or foul, the progress of
his campaign has a close relationship to the degree of political ten-
sion in Guatemala. Should be appear to be losing popular support, or
should the various anti-Arbenz groups appear to be gaining too much
strength, it is possible that Arbenz will rely more on strong-arm
methods and violence in his campaign.
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l'eek4 Coptributions, D/LA? 30-50 25 July 1950
? (CIA Working Paper)
Dowalum REPUBLIC: Relations With Neitht22rs .IspEtlye
0:7176; panaill7WrIiiiNarali-at the ONS inves-
tigating committee es report (D/LAWkly, 21 Mar 50), the Dominican
Republic seems to be trying to improve its relations with neighbor-
ing couatries. The Foreign Office exhibited patience and tolerance
in yielding to the Venezuelan ambassadoresj
dennnds incident to the departure of political rex:was vne naa
taken asylum in the Erbassy. A similarly conciliatory attitude as
manifest in the successful negotiations with Cuba in final settle-
ment of claims arising from the 1947 Cayo Confites incident. The
Dominicans have agreed to waive all indemnity claire in return for
the recently effected repatriation of the Dominican vessel AiJaeli.ta
ehioh had been confiscated from the anti-Trujillo revolutionailes
by the Cuban government subsequent to the frustration of the invasion
attempt. Repeated efforts to resume normal diplomatic relations eith
Haiti -- the two countries have net exchanged ambassadors since the
Roland incident in March 1949 ? have led to Haities recent acceptance
of a bee- Dominican ambassador. Negotiations are now in progress for
the repatriation of Colonel Astral Roland and Alfred Viand, Haitian
exiles who had been permitted to engage in activities inimical to
the Haitian government prior to the OAS investigation.
This conciliatory policy will be continued as
long as it suits Trujillo, eho, at least for the present, seems de-
irous of having his government appear in a favorable light as a
cooperat:Ive netber of the inter-American system. In any event, this
policy has resulted in a lessening of intra-Caribbean tension.
4L ARGENTINA: Port Strike Could Cam licate US-A entitle Relations
MaTiaTion-o e itrithe co eWREIoni;'--676:eral de
Gremios Maritimos y Afines (c0014A) a large independent Argentine union
affiliated with the (non-Cowan:1st) International Transport Workerse
Federation (ITF), mild undermine Argentine economic recovery and
complicate US-Argentine relatians, Efforts by the governeent to in-
corporate the CGGMA into the government-dominated COT, coupled with a
refusal to satisfy Inge demands of the CGGMA, constitute an attempt to
consolidate CGT control over all large and influential labor unions in
Argentina. While the government "a strike-breaking neasures have re-
- duced the effectiveness of the nine-ueek-old strike from almost 100
percent to 40 percent, its continuance spotlights the Peronista attempt
to eliminate free trade unionism in Argentina, thus provoking retali-
ation by the ITF, In the US, the AF of L and the CIO have indicated
their readiness to support, in principles the ITF boycott, reportedly
Already applied to Argentine ships in two German ports, Moreaver,
the IIF is confident that its boycott uill also be effectively sup-
ported by port workere in Scandinavia, Prance? the Netherlands, and
igium, Even though in the UK9 most important carrier servicing
r.
7
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Ileek34. Contributions, p/LA1 30-50 25 July 1950
(CIA Working Paper)
Argentine trade, the British Transport and General Workers" Union
has as yet indicated no definite positIon with regard to the boycott,
this union Will probably be influenced by any gavernment recommend?
ation in the matter, One possible development could lessen the
seriousness of this situation: should the ITFboycott be widely
effective and receive substantial support from the US seamen's and
longshorerents unions directly concerned, the Argentine government
night shelve temporarily its movement to bring the COMA into the
COT in order to avert further interference tIth Argentine foreign
trade and to preserve am cordial relations with the US.
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Weekly Contributions D/1112 30-50
(CIA WorkIng Paper)
Article 9-50
25 July 1950
Possible Crisis in Mexican Political Situation
Evidence is increasing that President Aledin may try for reelection
in 1952. Both constitutional and traditional erohibitions of ninth iwee
are explicit in Mexico,
could result..
Serious political disturbances
The majority of the Ubxican people hold the government and official
party responsible for safeguarding the constitutional provision of no-
reelection. This provision reflects one of the most important develop-
ments of the revolution of 1910, which arose from the need for govern-
mental reform. after Porfirio Mazy numerous terns in office. It has
been the belief since 19241 when the reelection of President Obreg6n
resulted in his assassinationa that democratic processes could be fur-
thered only by strict adherence to the official national watchword of
"effective suffrages no reelection".
The current movement favoring a constitutional amendment to allow
the reelection of President Alen&
ssibly true that Alemina by not
discouraging talk of reelection and therefore leaving his "hat in the
ring" has in mind merely a braking action against general political
futurism, since others would be reluctant to campaign if they thought
the president wanted the position for himself, There is a distinct pos-
sibilityv however, that Alm& could become convinced that talk of re-
election is a mandate from the people and decide to try for reelection.
That he is already entertaining such ideas
land that he is aware of the political dangers is substan-
tiwW by recent evidence that already-mounting political tensions have
dictated the strengthening of the security police those particular
function is the personal protection of the president.
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Week.ly Contributions, EVLA? 30-50 - 2
(CIA Nbrking Paper)
Article 9-50
25 July 1950
the anti-reelection movement is a strictly national issue, it night be
expected that the Communists motId insticate political disturbances to
further their own ends.
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Weekly Oantributions* D/LA* 30-50
(CIA Working Paper)
Situation Uemorandum 45-50
25 Tuly icY)
Antillgs
(ummarv -- Calm prevails during the transition fres colanlalem
to. semi-eutonomye Economic prosperity continues. ':!here Is nc.
known communist activity in the area. The military establishment
is adequate for law enforcement. Friendly relations are mainteined
with neighboring genrernments.
? Developments in the past year are considered to have
improved the status of US security interests In the vrea.)
The Netherlamlez Antales remain politically calm and stable during a period
of transition from eelenSal government to oemi-antonomy eithin the Netherlands
Kingdees, The Hag's le expected shortly to approse the imstrament granting limited
autonomy* known at 1;77 Tnterim Regulations. This measure premises to encompass'
the sounder feat l '-.elf,..governrrtent propeved by the various bodies that have
Tte mother government is firmly imposing an equable com-
eeeatious problem that has arisen to date* the distribution'
,rg the component islands. This decision will doubtless'
,t11 relief tor the lovl politicians who have been wren-
eeee this issue for months. It is not anticipated that
7:nterim Regulations will notably alter either the orderly
en r? the present cordial relations with the DS, Ties
eeee etrenntheved by the Prince Consort's visit to the
yi-timilrig devotion of the overwhelming majority of ithe
Orange wag demonstrated by their enthusiastic particie
of the Queen's birthday on Uay Day* at which time
tributoe among outstanding businessmen* civil servants,
studied the mattcr,
promise on the eeet
of legislative
be accepted aeseao
sling inconcluste
the proMulgatior
processes of go
with the Dutch C?
area this sprint
islanders to tho
pation in the ees'en
honors; were liber,'
and politicials.
rkrigng40
Dazing l949see,neole activity decltned Somewhat from the unusually high
level of the preceding year bet was generally satisfactory largely owing to
devaluation-4be local currency did not change its relationship to the Collar
in September 1949-1mports from soft currency areas were cheaper* and the cot
of living index registered a modest decline. Another effect of devaluation is
that mere import requirements are now being obtained from Europe and fewer from
the DS* elthough the latter remains the area's principal supplier, Despite a
relatively abundant steeply of dollar exchange, Rnyal Dutch Shell's polity or
having its Cunene? subildiary oprl boy from European suppliers whenever poae ble
is confirming this trend against the purchase of US goods.
Th 0 oil industry* which employs about 125 of the islande' entire popula-
tion and generally accounts l'or 757, of all import e and 97;.; of exports* continues
to dominate the economic life of the territaro. Early this year* some apprehension
was caused among Aruban oil workers when the President of the Lego refinery
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Situation Memorandum 45-50
25 July 1950
announced that a gradual reduction in the labor force would be effected. The
president envisaged reduced production schedules because of (1) the increased
flow of oil from the Middle East to new refineries in Europe; (2) an excess
of refining capacity in the industry as a whole; (3) reduced demand for cer-
tain Lego products such as aviation gasoline; and (4) recently enlarged.
Canadian refining capacity. D/LA does not anticipate any notable unemployment
in Aruba, however, as the labor market is still firm in other industries, and
whatever excess may develop in the labor supply will be remedied by the re-
patriation of British West Indian contract laborers. Further, recent develop-
ments in the international situation may alter plans far the curtailment of
production.
Secondary industries, such as the production of aloin powder, phosphate,
straw hats and divi-divi, continue to provide a modicum of economic diversifi-
cation. On the other hand, the proposed construction of several modern hotels
might expand significantly the tourist business, which presently brings in
about $2.5 million a year, mostly from the IS and Venezuela. Government revenues
continue to exceed expenditures by a small margin. Because of a recently under-
taken public works program, including improvement of airport and harbor facilities,
expansion of water distilling capacity, schools and law cost housing units, the
government has deemed it necessary to raise taxes moderately and to float a
small bond insue. The public debt now stands at $6 million, a reasonable figure
in relation to annual revenues which currently average about $30 million.
4.1allettaa
While the 500 Dutch troops stationed in the Netherlands Antilles are
equipped only with light infantry weapons, their state of training and readi-
ness is considered fully adequate for the maintenance of internal law and
order. The police force was re-organized laat year, and its morale and efficiency
are good. A flotilla of small naval craft is stationed in the area and assists
in preserving the security of the islands.
Itormoiva
There is still no known Communist activity in this area. Vigilentl_rj
officials cooperate closelYI
lin controlling the movements of potentially subversive
elements. Transit Europeans en route to Latin America are processed with dis-
patch and rarely allowed to remain more than twenty-four hours Despite the
government 'a alertness, some propaganda has been introduced from Venezuela
advocating severance of ties with the Netherlands. This material IA distri-
buted locally by the relatively unimportant Curacao Democratic Party and has
not attracted noteworthy popular attention.'D/Lk believes that the watchful-
ness of the authorities will continue to keep the Netherlands Antilles com-
paratively free of undesirable elements.
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Situation Memorandum 45-50
25 July 1950
lutazattemal
Both the natives and colonial government officials remain genuinely
friendly tosard the US 0 and there Is no reason to believe officials would
be otheraise than cooperative in necessary Joint undertakings. In evidence
of their esteem the islanders recently presented the hanisome Franklin D.
Roosevelt Rouee as a Coneulate General to the US "in gratitude far the aid
rendered" during World War I/. Of particuler significance is the fact that
this munificence apparently evoked no remonstrance among the rather touchy
tam pe,yers.
Particular vigilance is currently exeroised in denying entry to poli-
tical refugees from Venezuela in order to avoid embroilment in the internal
affairs or that country.
eettlgm' 9.
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ook.ly :Contril-mtions, D/Ta-i 30-50
(CU. Jkingl'aper)
Situation LoLioranclun 4.5-50
25 :Ray 1950
The Lolivian government remains ma! ., The over--CLI. econonic
situation is liholy to remain poor despite slightly increased prospects
for short torn buttormont, There. has been little change in the state
of the amed forces. Cubversivo groups constitute somewhat less of
'a threat to Vac. govern:lent s tability? Dolivia s relations Trith ether
gevernnents anioat
'1; security interests have been somewhat adversely affected
by the continuing-.704.1:210:7,43 Of the pro-U3 goverment, partictillar'ly
cause of the incrozwing ilvortance of Dolivian tin in view of recant
international. davolopments.)
Politic
The government romans weak despite its surprising strength exhibited in
euppreSsing t7e alleged revolt in ay that grow out of a
general strike, ei in tioarting for reported conspiracies by those groups.
These grottps? altheLki:;11 their potential. ;30011f3 to have boon somewhat curtailed
by the goverment t3 repressive meastIres (see ::,..i.bvereive), remain active rd
Lll be quick to eapitnilz,..,_en fttly increase in sooial. unrest,. Labor, tui-
discouragal by it,. d.o.feat not o11ifici by the g,overnuontls recent
action to raise uages? is again restive The covernment is nou less certain
of arty support as a result of dissonsio arising from diss:.:Ltisfaction vrith
the arw chief of otarf Jul 50),?
The govermont party, is politl:call isolated, hus. been
further I7Oakoned by the intoneiii nn Of 7i.rCIVI. OLIO ly C.X15'til2Ciflfecling
betricen President rioluiti nd former e:;,--Linistor i:ellinedo? now ;21,
heoe.? concerningto oemposition of I...1;e cabinet installed en 30 June, In
ViCI7 of these circumstances, little shoal ex2ccted of LI.e legislat,Jre
./.1rich convenes S g-ust- to consider the s t..; to of siege 1.1 Dort:sit treaties
and internal reforms.
The precarious stability of t?le eihr ovornmt?41,, LUi *ocen threatened
repeatedly by frequent c o piraiee z.nil reviuticnary t, taipt r_ ut It that
government has dononstrated .1".',n/iVO appaceri.1, insurmountable
crises, In vieJ of decreased st;y;:rs:0J,) !?...?pongth? and proviied dis-
sension does not buco:1,1 r.:ore serious, it ncc of renaming in petler nay
be consideral very ;:-,lightly iuproed
L4ilagriU
: The over-all'eomiie itti.7.,-diviaiiely tc,- remain poor
despite slit.b1 i!loreasod L LiLi7-c.r1,2t-tai'L. betterment. Factors
favorable to prosont improvement are the decree of 5 y zhieh ootablichc4
nevi Uti.aC levels and froze prices al rents, was-pros nay succeed tempo-
rarily:Eln controlling the accelerated inflation produced by devaluation
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(CIA Uerldng Paper)
Situation ilemerandazi 46-50
25 ,Taly 1950
measures of February and April; the spectacular rise in the price of tin (from
77g before the 7x/OI"Or.itl fiellting to a high of 97)/ on 7 July); recent increase in
the nrice of lead zinc, rend silver; and the draft 11:3 contract, for the gur-
chase of all avaiiahlc tin.
Longer-term rre decidedly loss favorable. Inflationary pressures
remain extremely streeg,; --laces and prices have not increased in the same per-
centage as the offleial value of the 1221121ang 'las been depreciated by the
new parity, which, Lover, is still pegged at an unrealistic high value.
The estinated 1950 national budget is considerably greater than that of 1949
and will einost certainly Ladd to the existing inflation. Revenues appear to
be aver-estinated -fieriee exchange receipts during the first five months of
1950 have been lcce than 'all of budget estinates--and the government rill
probably be forced aale Ft resort to deficit financing. Bolivia continues
to hope for outsile eld to ease the critical economic situation rather than
taking all the dr eeaeures necessary. It is true that the president has
expressed his icees to grant a IT technical nission all powers necessary
to resolve the ee altuation? arid that tir technicians reportedly may be
placed eithin 'ec 'Ian Civil Service; it is believed howevca. that their
offorte would ',, (ly in vain because of 25X6
probable resee4 )n no part of minor Bolivian officials and employees*
Litarv
There has M;o= lit,le chance in the state of the armed forces. The arPY
appears to bc (11; silently boloe its rornal strength at present, while the
strength of re e tioeol police has declined eo_isiderably. The efficiency of
the air force, 'atever, has been somewhat enhanced by the reinstateaent of
certain pilo4 fougt against the covernaeat in the Septenber 1949 re-
volt and by eepansion of its training prograne It apeears that appropria-
tions for Vh. laistrion of national defense and government (ehich controls the
national polic!,) nay again be the largest iton in the national budget
aulamlin
xttro Groups constitute sonewhat loss of a threat to the govern-
ment's stabill4y az a result of the gevernnent's repressive measures adopted
after the Lay e7rIsinc. It is true that the Mt is attempting to regain its
strength by virc4.3 efforts to obtain the support of other organized groups
and appears tc net with some degree of success. The outlaring of the PIlt
and the arrest >f -zi.ny of its members and leaders OB a result of its participa-
tion in the floe- eevelt should seriously disruet its organization and decrease
its considerab7, 1,..f1uence among non-nine lahor, The labor influence of sub-
vorsiveDappeare ts :ave been dealt a hard blow by the decree or 23 flay ehich
rammed previousl:, !looted Communist and nraziefascist" labor leaders from
office and deolar:; thom ineligible for reelection, It is true that joint
plans of subve-sivo groups for revolutionary disturbances in mid-August have
been reported, and it is possible that such plans nay natwialize, This
Bolivian government has, however, repeatedly demonstrated its ability to
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Situation Eamorandum 46-50
25 July 1950
survive subversive attacks; while its overthrow at any time in the next feu
months would not be surprising, neither would its survival.
Bolivials amicable foreign relations continue to be influenced by economic
considerations and fear of Communism. The cordiality of US-Bolivian relations
was enhanced by the 1 flay aiming of an agreement providing an 11:ximbank credit
up to A6,000,000 to cover approximately two-thirds of the cost of completing
the vital Santa Cruz-Cochabamba highway. Proposals for barter of Bolivian
antimony and other ores are presently under consideration with Switzerland,
Japan, and nungary. Preliminary discussions with other South American countries
concerning a Bolivian-initiated conference for the control of Communists are con-
tinuing but there is no evidence that any definite results have beeaobtained.
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