WEEKLY CONTRIBUTIONS 35-50 (Sanitized), CIA 29 AUGUST 1950

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December 12, 2016
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August 20, 2002
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August 29, 1950
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ft Approved For ReVse 2002/08/28: CO Fa -01090A4200050035-7 INTIAL Week Contributions 35-50 z9 August 1950 424674 Of the developments reported an this week, that regarding the 'posibility of trouble in Bolivia (p. h) is par icularly significant: CUREIRIT Dornmaars GE4FRAL: The US Sonatels committee report on coffee already- has resulted in adverse reactions from Latin America (p 2),, A nerw? internation3l3 ntAr-Communist labor orn12,?ation is to replace the CIT as a force opposed to Commurdst influence -among Iatin iircrican labor grams (p, 2),, /I0i7,TITERN AllErtl, Th. Ouba, the seizure of the Can:mist newspaper ET: is the rest important development to date in the campaign to suppmss Ccon- _monism (p?, 2)? Cuba is launchine an extensive public 711Drks prog?am (p? 3), The strengthening of Natemale is armed, forces 'will restore to them considerable political, as well as m1litary-9 strength (p., ),. In Panama prospects of trov.ble have increased because of unresolved dif- ferences betmen Presidorxt Arias and Chief of Police flan 3),. Panama s enthusiasm for support of the ULI cause :hi Korea has lessened because offers of aid have not been accepted (p,? 14.)? SOUTHERN AriFio_ In Bolivla,z serious consequences ne4- attend the critical labor situation in that country mining area (p,? 4)? Chile ,s copper industry may apain face a setback if strikes fellow the terrrthatiou of tIipresorxt labor contract (p? SPT.,',CIAL SUBJECTS The Current Situation in Coloribia , CONFtDENTIAL State Dept. review completed 64 A.P 4 a/ DOCUMENT NO NO CHANGE IN CLASS. 0 LI DECLASSIFIED CLASS, CHANGED TO: T$ NEXT REVIEW DATE: AUTH:li H4,77,> ? DATEN a " ? REVIEWER: 0 0 6 Approved For Release 2002/081/4141/2:6cythRI3P1'9-01090A000200050035-7 25X1 25X1 Approved Fortleease 2002/08/28 : CIA-RDP79-0190A0 0200050035-7 C T Weekly Contributions, (CIA Working Paper) tr.X. Of 35-50 29 August 1950 US Senate Coffee rt opted to Intone Anti-US me Miztinientiment mill be intensified inmost of the coffee-producing nations of Latin America as a result of the unania- mous approval by the US Senate Committee on Agriculture and Forestry of the revised "Gillette Report/ a, Adverse reactions have already appeared in Colombia and in Brazil mhere there was partioUlarly ? strong feeling following the release of the earlier "Gillette Report'', Latin American opinion thus far has bean that the report has done a disservice to the "good-neighbor policy", and that the US Congress has shown a lack of interest in the protests made last dune by the 14 Latin American coffee-producing nations. If the DS Senate accepts the report of the committee, an even greater wave of anti-US senti- ment can be expected. 2. American Re anal Affiliate of the ICFTU to be Formed rna no ea ons (ICF111), supported by both CIO and. AFL, together with the AFL- sponsored Confederaoiaa Interemericana de Trabajadores (CIT)., is planning a hemisphere-wIde labor conference inNexico City in Jan-' wary 1951 to establish an American regional affiliate to take over the CIT and probably also to include the Mexican CTM and a few other unions not presently in the CIT. The new organization shoed prove acre representative of all non-Communist labor in the Western Hemisphere, and its affilia- tion with the ICFTU would give now-Communist Latin American labor increased influence In the ILO and UN because the IOFTU has con- sultative status in the latter two organizations. The new affiliate, eaten developed, should pravide more effective opposition to the Communist-damirestedalail particularly in counteracting Communist, propaganda among laboring groups. CUBA: AntieCommnnist Caraii lfirgniingt-STTE;biiikfibia-af-the principal Communist propa- ganda vehicles the daily az, represents the most important develop- ment to date in at noir appears to be a fairly widespread and effective campaign to suppress Communist activities in Cuba. Other current evidences of increasing public and governmental pressure for Communist containment include the firing of Communist workers by the Cuban Electric Company after authorizationbythe union IVIkr, 1 Aug 50); a vote by Syndicate of Habana Warehouse Tor re and by the National Federation of Medical Workers permitting the expul- sion of known Communists; and a newspaper campaign which resulted in the repudiation by thousands of Cubans of their signatures on the Stockholm "peace" petition. If the international situation remains acute, further anti-Communist action is expected, possibly including the outlawing of the Cuban Communist Party (FSP). Approved For Release 2002/08/2:MMISIgla Approved For Rase2002/08/28 : CA-RunDP79-01090M4200050035-7 29 wookly contributions r?f11PATIAL 1950 3(5).57 !S August (CIA Working Paper) Internal Bond Issue for Public Works new p c works bond issues mill be limited. The present bond issue is for 045 million and an addle tional $75 million issue is eventually to be sold for similar Pur130. 154e3 Imaye 1 Aug 50). There is no doubt that large eXpenditures are needed far roads, water vorks and electric power tacilities and to facilitate agricultural and industrial develop- ment, and also that there is an acute enter shortage in several urban areas. However, real benefits fram the new bond issue will probable* be relatively snail since graft and inefficient expendi- tures eey be expected to prevent proper application of these fends. 5. dUATMALAs Stre the Armed Forces: Political lications can c poi s ua or mar- e; at e d by 0ateuelar army and air force negotiations for the purchase of arms to be delivered? it possible, before the presidential elec- tions in November. The sudden, availability of funds for the armed forces, after a long period of adninistrative neglect, suggests that President ArSvalo has overcome his inherent distrust of the military (now-purged of strongly conservative officers) and is pre- pared:to use the army to maintain order during the elections, if net to influence their autoome. Heretofore, the military has suffered uhile the National Police and the militant, Communist- directed labor unions (both believed loyal to leftist candidate Arbenz) have been permitted to accumulate arms. However, Ar4valo's decision to place the eouatry under army control during recent disturbances demonstrates the existence of mutual confidence be- tween Arvelo and Major Paz Tejada? Chief of the Armed Forces. Mbreover, because the labor unions have been partially disatu by ed the arne: and because the leftist pro-krbenz Partido Awl& Revolu- oionarla and the National Police are the only other organizations (besides the army itself) capable of forceful, organized interference with the electione, the strengthening of the ertlitary suggests an effort by the adminiatration to redrew the political balance in favor of the moderates. In general, it is believed that the strengthening of the armed forces will benefit US interests, since at the present tine, these forces are the most moderate of the organization capable of effectively influencing political developments, PANAMA: Political Tension ERM-PZETTartension has grown out of a struggle for power between the president and Felice Chief Rem& and by a rap- prochement among factions opposing Arias, Immediate causes for the current tension are the president's efforts to avoid the reappoint- rent as comptroller general of Remem's brother-in-law and to strengthen his regime a inst a possible opposition nejority in Approved For Release 2002/08/28 : CIA-RDP79-0 Approved For Fltitase 2002/08/28 : CIA-RDP79-01090bt0200050035-7 25X1 Weekly Contributions:, (CIA Working Paper) Co 35-'50 29 August 1950 the National. Assembly scheduled to meet on 1 Cctober. Underlying causes of the continuing political tension are Police Chief Derhais key position in politics and big interest in supporting opposition to Arias in order to further his aun political position. The as yet unresolved differences between, Arias and Bean continue to constitute a threat to stability, (Substance in CIA 25 Aug 50.) Press Criticism of UNINALin Acce t Caws of Lt liaema's enthusiastic support of the UN moves in Korea is being somewhat shaken by UNte delay in, accepting the offer of aid made several weeks ago. The government's offer of bases for the training of UN troops, or its norchant marine, and of other forms of aido had received the eupport of all political elements in Panama exeept:bhe Communists, Panamanian volunteers for. military service with the UN no number over one thousand, a large nunber for this sifted country, S, fl(T ??.e Disorder ia UlnIn Area AO rep dalige in the critically un- stable labor situation awe last week when the US EMbasay at Ia Paz recommended eVaduation? of Americans on the trouble area (CIA Dalin, 23 Aug 50), DisContent has recently been general among ham? labor because certaintommitmenta made to it by management have not been net and because students and teachers, who reoently.went aa strike in Le Paz at the alleged instigation of the Pin, and possibly the MR, have been inciting the miners, Further, CemMunists, who have reportedly dchedaled ant uprising it the mining areas for the near future, continue to be a potential threat because of their denonc strated ability to aggravate any critical situation, As there is no evidence thus tar that the government has taken proper precautions against the occurrence of a second nGatavi incident, it appears quite possible that the very volatile-natured miners may engage in violence which, combined with current disorder in La Paz, my lead to a serious politicalceoonomic crisis, 9. CHILE t Possible Labor Troubles in the Incittata, .; fEtTlAar by two serious tro-fir?'1;Mr-v-erplonit a strikes at Chuanicanata (the world's largest copper mine and process- ing plant), mgy face another setback when the existing labor contract with the Chile Exploration CoNpagy expires on 31 August. Although there are no indications that discussions of grievances are immi- nent, it appears likely that the two chief demands that touched off the former strikes ? that overtire be eliminated or reduced and that the five pesos per day bonus currently paid be considered a Approved For Release 2002/08/2 ".kIir17.1* CONRIMENTIAL 79-01090A00020005003V ft Approved For RyttTease 2002/08/28 : CIA-RDP79-01090AIN/0200050035-7 CO ENTIAL Weekly Contributions, 35-50 29 August 1950 (CIA Working Paper) permanent wage in:Crease -- nay be used by the Communist leaders of the sindicatos as a Springboard for prolonged labor troUblee. ResiariOnithe conpany, which would be almost certain, would cause a tieraup of the industry that might be damaging to Chilean economic and political stabilitr as well as to the US interest in safeguarding the production of this strategic commodt4r. ZDEDITIAIL, Approved For Release 2002/08/28 : 1090A00020005003S-7 Approved For Ratease 200i/c046 Weekly Contribetions, 35-50 (CIA Warkingfter) Situation Memorandum 53-50 -RD E/ 24,119gAte6200050035-7 DEM I Wee ZataStazistUltamtlamktlalcabta 29 August 1950 (8 eel The stability of the Colombian government has a iMproved. The economic situation has deteriorated elightly in recent months bet is probably still favatable. The ergs' as a whole has remained lova to the governmemt. Capabilities at the Colombian Communist Party remain slight. International relations remain good. -- US security Interests have been favorably affected by the improved stability of the Colombian government.) La1=4 The stability of the Colombian government has apparently improved as 0. result of the peaceful inauguration of President G6mee on 7 August. . The official Liberal Party position in regard to the new regime is one of passive civil resistance. In the period preceding the inauguration, the stibversive elements of the Liberal Parte together with an undetermined number of army officers tried unsuccessfully to organise a revolution before the how president should take office. Moderate Liberal elements were attempting.dur- ing the sOme period to persuade the party to unite an some positive program through Ohl& the Liberals would be able to exert some influence on the Dames regime. At the National Liberal Convention on 10 August, however, it became clear that the Liberal Partes intransigent elements (which include the National Directorate) had euemeeded in preserving the Directorate's Nloenothine policy for the party as a whole. The avowed intentions of the newly-inaugurated president are 1) to strengthen Colombianet8 friendship, 2) to insure fair treatment for foreign capital, and 3) to eliminate violence. In those statements, GAmez is believed to be sincere. In regard to constitutional guarantees, amee has been less explicit. The important actions taken by the Occeervative regime during the preeinangurae tion period were* the indefinite postponement of Congressional sessions; the scheduling of new Congressional and municipal elections for June and Septedber respectively of 1951; and the semi-official pronouncement that the state of siege would continue until after June 1951. These decisions were undoubtedly taken with the concurrence of Gidez and will continue to be effective under the new regime. In addition, prose censorship has been tightened, telephone taps have been instituted, and selective censorship of the mails has been re- sumed. Although the Liberals' freedom to ansaiible was apparently not limited in the case of the National Convention on 10 August, the meetings of the Liberal Confederation of Colombian Workers have been hampered by government action, estimates that the present restrictions on civil liberties will be continuedat least for the immediate future; that G6mez will make a sincere effort to control the most violent webers of his party; and that the govern- ment will remein relatively stable for the next several months. Approved For Release 2002/08h*,91A-R0K9-01090A000200050035-7 6, 73TIRDENTI Approved ForReingse 2002/086MVIA-RDP79-01090A004200050035-7 CaiaiDENTIAL 2 - 25X1 Weekly.Oontributions, 356%50 29 August 1950 (01A Working Paper) Situation Memorandum 53-50 25X1 IMMO-4 The economic situation has deteriorated slightly in recent months, but is probably still favorable. It is true that weather eonditions have been unusually poor for both food crops and coffee. Consequently, cost-of-living increeeee have been: amelerated, particularly for the working class, and coffee Production for 1950 win be at least 10% bele* normal. The ovrrent high level of coffee prices is, however, a counterweighing favorable factor. The rise of coffee Prices in recent months and the Consequent reaumPtion of coffee exports had reduced the unfavorable balance of trade during 1950 to US014 million by 8 u13r. It is estimated that the high coffee prices will prevent serious halal= of payments difficultiee in Colotbia in 1950 despite the recently increased importation or merchandise, machinery, and rAterials which might become searce because of the conflict in Korea- despite the ine creased food importe; and despite the smaller volume of coffee production and therefore of coffee exports. A possible favorable indication for US foreign investment in Colombia (in addition to the attitude of 06mea -- see tiattW) is the rumored arrange ment.by which Tropical 011 Company may be offered 40g of the stock but full nanaeerielcantrol in the DeMares petroleum concession which reverts to the ' Colcalan government in August 1951. . 111.21Mtt The army as a whole has .remained loyal to the goVernment. The:20 jay plot F7ikly, 13 Jul 50) Was .offectively thwarted, and anly:a few civilian arrep an minor bloodshed occurred. The army offensive against he Insurrec- tionary moveMent in the 'lanes has had a fair degree of success as is indicated by the flight to Venezuela of the moat important leader, Eliseo lel$eques. The National Police, though unquestionably Conservelives, are a. dubioue -asset to the Admirietration. Having .had at least a Share in cane:Ing the ooh- tinned conflict in the hence, the police are now a factor of unrest in Antikula. Army-police hostility, which has. led to several Minor armed clashes in recent months, has been.incromed by a report that soma of the police divisions have received rapid-firing weapons, presumably in order to oppaeo-.the army if the occasion should arise. Air force capabilities will be substantially Increased bY the-ceraplation ? of contemplated Colombian purchases in the US of twelve new aircraft and US$270,000 worth of spare parts. -Approximately 85 of the AirForce :s 145 aircraft are non-operational at present, primarily because of a lack of spare parts. aftwalyst? ?The Colombian Communist Partyle capabilities for subversive action reMein slight.: Although party pronouncements and press had followed the Soviet line, on -8 Jlay-party loaders were :It'll awaiting instructions or orientation on the Approved For Release 2002Aftrel?A=RDP79tiele EVITIA"' Approved For Rase 2002/CIMILVIA-RDP79-0109040200050035-7 4ONFIDENTIAL 25X1 Weekly Contributions (CIA Uorking Paper Situation Memorandum 53-50 35-50 29 August 2950 Korean conflict from either Bucharest or Paris. During reeent Months the dis- tribution of the Cominform release: Egnam_altAumftzl,az.,maAaranda apziakz has been initiated. Subscrietions are boitig sold for the equilreent of approximately US07.50 per year and this money should slight1 alleviate the extremely pocr financial condition of the party, since the nublications are received without charge. Jakca22.4,1;1310, The ColoMblan government and press have wholeheartedly supported the US and the TIN in the Korean situatian, at the same time condemning the Soviets for the invasion or southern Korea. It is true that, when conversations with the US Aar to determine the needs of the unified cemMand were held shortly before the inauguration of amez, it was decide that ne commitmonts ?or Colombian assistance could be made until after the 06men government had been instal/8d on 7 Augusto However, as early as 27 June, the ColoMbian navy requested information as to possible coordination with the US. Furthermore, the Foreign Office position has been that any military action Colombia might take should be coordinated with that of other nations, but this statement was avowedly not meant to indicate that Colombia necessarily would not send troops unless other Latin American countries did so.' It is considered possibly significant for US-ColoMblan relations that Laureano Camez, in conversation with Ambassador Beaulac on 24 jay, stated that he feared that the Communista would mako a concentrated effort in Colombia, and that iven a million. dollars, they Could bring about a successful revolu 25X1 tion. .,- stimates that this statement is completely unfounded in fact, and that its txpression was designed exclusively to enhance, in US eyes the impor- tance of good relations between the US and Laureano amez. CONFIDENTIAL, Approved For Release ragOakr; CIA-RDP79-01090A000200050035-7 Sc