WEEKLY CONTRIBUTIONS 42-50 LATIN AMERICA DIVISION, ORE, CIA 17 OCTOBER 1950

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01090A000200060003-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 19, 2016
• Document Release Date: March 19, 2002
• Sequence Number: 3
• Publication Date: October 17, 1950
• Content Type: PERRPT

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coo' ' 424674
-CONFIDSWAIAL
Weekly Con tionu . A2 -50
Latin America Division, OItE, CIA
17 October 1950
Of the developments reported on this week, DIL& finds that on Brazil
(p. 3) of particular interest.
GENERAL: Recent Communist efforts to reduce Hemisphere solidarity have
been Ineffective (p. 2). At the sicth conference of the Inter-American
Press Association, that organization reorganized and strengthened' may
be more effective in its campaigning for freedom of the press in the
Americas (p. 2).
NORTHERN AREA: Trinidad's elections have revealed Radical strength (p. 3).
CENTRAL AREA: The election of Brazil's ex-dictator Vargas as president
may make more difficult economic cooperation between that country and
the US (p. 3).
SOUTHERN AREA: In Argentina, the situation of US meat packers has recently
improved (p. 4). In Chile, the cohesiveness of the government coalition
may soon be tested (p.. 4).
c pNFI Et4 IM
NO CHANGE IN CLASS. Cl
DECLASSIFIED
CLASS. CHANGED TO: T:
KI CYT PFVIF W DA I E:
25X1
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Weekly Contributions, D/LA, 42-50
(CIA Working Paper)
17 October 1950
1. GENERAL: nef ectjvepgss of CaannunigtEfforts on Hemisphere S
Camnuniste have had virtually no success in their recent
efforts to exploit situations which, except for the effectiveness of
counter-forces and failure, b-' Communists to make the most of their
opportunities, might well have resulted in the ii^pairment of relations
between certain Latin American countries. In all of these attempts,
the' Communists, who apparently lack capable leadership, failed to
make a strong or concerted effort or to develop effective propagawla
to support their plans.
In Guatemala, Peru, and Ecuador, for example, the Communists
recently failed in their efforts to delay or to obstruct the processes
involved in ratification of the Rio treaty (they had previously delayed
ratification in Guatemala). In Ecuador, Communist agitation for a
change in the boundary with Peru thus far has been without serious
effect, and in Mexico, Communist student groups were prevented by the
school authorities from demonstrating at the ceremony on the return
of Mexican battle flags from the US. A Guatemalan Communist reportedly
insulted the Mexican flag at the Mexican-Guatemalan border but was
almost lynched by the crowd witnessing the incident.
Communists will continue, despite recent failures, in their
attempts to exploit or to create controversial issues in the Hemisphere.
It is true that counter-forces will generally render Communist efforts
of this type inconsequeratial. However, it seems quite possible -- ptar-
ticularly in the cases of a bitter internationa? controversy or of an
issue which the Communists could beep alive by holding the balance of
powor -- that Communist action might be considerably more than an irritant
to inter-American relations.
Sixth Inter-American Press Conference
The sixth conference of the Inter American Press Association
(a non-governmental organization) held recently in New Yor:. City and
which resulted in the reorganization and strengthening of the associa-
tion should enable it to campaign more effectively for freedom of the
Hemisphere press from government control and inter-American press
solidarity in the face of governmental attack on any of its riembers.
A more ti/*htly knit, permanent body with voting rights alloted to
individual newspapers and periodicals was substituted for the previous
informal and loose organization in which such voting rights had been
assigned by countries. The conference also established a committee to
investigate infractions on freedom of the press t'roughout the Hemisphere
and condemned an anti-democratic any efforts of governments to abolish
or limit this basic freedom.
Although minor threats to inter-American harmony :,iay occur
due to the association's criticism of certain American governments in
their treatment of the press (the Peronista newspapers in Argentina
have alroady denounced the conference), US interests should, on balance,
be benefitted by any increase in the effectiveness of this non-
governmental organization to foster freedom of the press.
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~OM ETIAL
Weekly Contributions, D/LA, 442-50
(CIA Working Papery
17 October 19#0
3. BRITISH WEST IL. DI sS i Trinidad ' ecti one Reveal N901 St_en th
Trinidad's first general election under the new
colonial constitution has revealed for the
Home Rule Party of T. U. B. Butler r Butleritee 25X1
have won six of the 18 elective ative Coun-
cil --- three times as many as any other single party. It is certain
that the Butlerites will eolueud substantial representation in the
Executive Council.) in which five of the ten members are elected by the
Legislative Council. The Executive Council will bat in effect, the
principal instrument of goverment policy.
Butler's followers are, in general, poor, un-
educated rural laborers in the agricultural and oil areas; as their
champion, Butler has demanded complete home rule and independence from
Britain's "cruel imperialism" and "reactionary colonial policy". His
influence.is feared by the conservatives --- British officials end
other Europeans, as well as those non-Europeans engaged in commerce
and industry.
The election results are of considerable
significance to US security interests. As they have established the
political influence-of Trinided'e working class, and have revealed the
susceptibility of this class to Butler's highly emotional appeal for
native rule, it is probable thtt;US policies and activities involving
Trinidad -- mhose oil fields' refineries,; harbor, and airfield facilities
are of strategic importance -- will be subject to attack by local politi-
cians if they can exploit anti-US themes for personal advantage. More-
over, such politicians will receive prompting from the local Communist
organization, which has been expanding recently and which reputedly is
attempting penetration of the Butler Home Rule Party.
4. BRAZIL: Ex-Dictator Vareas Fleetid President
It appears certain at this time that ex-dictator Get6lio
Vargas will be Brazil's next president. (See D/LA Wklies, 26 Sep 50
and 3 Oct 50.) With r+ore than 80% of the votes counted (an estimated
7.7 million votes were cast), Vargas leads General Eduardo tames by
more than 1.3 million votes and the government-sponsored candidate,
Cristiano Machado, by more than 1.8 million votes.
Vargas, confident of his victory stated in a press interview
that "his government will be of a laborist orientation, like that of
England and the Scandinavian countries,'" and that it will be evolutionary
and not revolutionary. He added that he would welcome foreign capital
investment as long as such capital did not desire to invest in those
sectors which national capital could cover or which, in the interests
of sovereignty and national defense, must be controlled by national
capital. Vargas' statement that he was confident the present goverment
would fulfill its promise of a normal transfer of public power may have
been a veiled throat in view of rumors of a military coup to prevent
CONFIDENTIAL
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Weekly Contributions, D/M, 42-50 17 October 7.950
(CIA Working Paper)
his assuming the presidency on next 31 January. DILL estimates that
there will be no sucaecfif1ul attempt to take over the government and
that Vargas will be inaugurated as the next president of Brazil.
It is not likely that Vargas will take a position openly
hostile to the US, but many of his extreme nationalistic ideas might
reverse somewhat Brazil's past close cooperation with the US, particu-
larly in economic matters. There is no evidence to support rumors
that Vargas and President Perna of Argentina will attempt to form an
anti-US bloc; the traditional hatred of the average Brazilian for Per6n1a
Argentina as well as the probable unwillingness of either leader to
play a subordinate personal role would seem to militate against such
an alliance.
5?
AR& LTINAs Situationww.X of ,US Meat Packers Imnreved
r .rnr?~rr ^ I ~ r r r.rr~gYMr~iii
The situation of the US meat packers operating in Argentina
has been improved by is government resolution which will resolve favor-
ably long-standing uncertainty concerning their financial position.
The resolution provides that the government will compensate the meat
packers for deficits incurred during the period l October 1946 to
11 August 1950, plus a profit margin of 5.75 peroant of the price of
livestock processed for export; also, it allows for "Justified normal"
expenses for plant maintenance and improvement. Acutally, previous
government subsidy payments to the packers covered the major portion
of their deficits, but until the now resolution was issued there was
no clear definition as to whether such payments were temporary loans
or permanent reimbursement. ltarther payments to the packers will be
made upon completion of the audit. presently under way. According to
Ambassador Griffis, the packers have agreed that under the now resolu-
tion they are receiving "a far greater percentage of profit than any
important packing house in the United States". While the resolution
applies only to past operations-and therefore does not guarantee
similarly favorable prospects for, the packers in the future, it is at
least an example of Argentina's current efforts to improve economic
relations with the US.
6. CHILE: The Q2h2gJXMgj gf 22 C
The cohesiveness of the government coalition, which has been
in force since lebruary of this year, may soon be tested. Increasing
pressures from the left and disharmony within and among the coalition
parties may provide the setting of the test, for which the current
controversy over tho choice of successor to the late Senator Alessandri
may possibly provide the Immediate cause. If tho present coalition
should be disrupted, any, new coalition would probably be more leftist.
While such an eventuality would not impair the basic stability of the
government, it might make it more difficult for the US to obtain the
required flaw of copper and other strategic materials from Chile.
CONFIDENTIAL
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CONFIDENTIAL
Weekly Contributions, D/LA, 1240 17 October 1950
(CIA Working Paper)
Situation Memorandw 63-50
The Current Situation in Panam+ar.
(,S a - Political tension has continued but the essential
base or the continuance of the regime has not been destroyed.
The economic situation remains unfavorable. There has been no
improvement in the law efficiency of the national police and the
secret police. There. has been no significant ah4r ge in oven'- all
Conwinist strength or influence during recent months. While
Panama continues to endorse US international policies, difficul-
ties are developing in US-Panamanian relations.
-- US security interests continue to be endangered
because the Panama police are incapable of preventing the use
of Panamanian territory as a base for Communist sabotage operations.)
Political
"Lttical tension has been almost continuous during recent weeks but the
essential basis for the continuance of the regime --- the armed truce between
Arias and Police Chief R+sman - has not, as yet been destroyed. Opposition
elements, including powerful student groups, Liberal Party factions, and some
former supporters of the president, have been chiefly responsible for past and
present tension; the president himself has also contributed to it by his i].lr-
adv;sed efforts to strengthen his administration and to undermine Police Chief
Remora's key political position (D/Ltd Wkly, 29 Aug 50). Remcm up to the pres-
ent has refused to ally himself with the opposition,. althougi he has warned
that he would oust the president if jhc latter's action made this course neces--
?sary. In the event of a crisis, Remon is capable of supporting a change of
government,, but despite these dangers, it is quite possible that Arias will
continue to hold his place. He is unlikely, however to increase his strength
enough during the remainder of 1950 to make certain .he stability of his regime.
Economic
economic situation remains unfavorable, in spite of some favorable
elements. Favorable elements include Panama+s good international credit rating,
the refinancing of the foreign debt at loser interest rates, reduction in the
floating debt, and the decree law of June 1950 which encourages new capital
investments. In addition, there are prospects for emplayment of Panamanians
by imolocaentation of the new highway convention, (see International).
Nevertheless, unemployment is still high, economic activity is below normal,
the national income is still below the level of 1913, and the government is
having its usual difficulty in balancing the budget. It is estimated that
there will be no appreciable improvement in the economic situation in coming
months,.
Mali
has been no improvement in the law efficiency and capability of the
national police and secret police, nor in their ability to prevent the use of
Panamanian territory as a base of Commuxaist sabotage operations, Furbherlm re,
rivalries between the two services still constitute a handicap to efficient,
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VINUAL
b ?~eekly Contributions, D/IA,, 42-;S
(CIA ';Tcrking Paper)
Situation temorandum 63-5o
17 October 1950
Subversive
The numerically small Communist party (337 members) has maintained its
rather disproportionate influence during recent months, Communists experienced
a legal setback Mien the Supreme Court recently affirmed the constitutionality
of the cabinet resolution outlawing Communist activities. The Communists are
now less sucessful in spreading published propaganda than before the Korean
war (the press refuses to publish their copy), and their influence on labor
has df-`creased, particularly in the Canal Zone. Nevertheless, the Communists
still have a mouthpiece in Congress through whom they are able to propagandize
orally against the US. They are probably in a position either to use the
Liberals for a propaganda cover or to provoke them to antis activity in
coming months (because of the similarity of the Party line to that of the
Liberals on many issues). In addition, the president's recognition of the
fact that the Communists still maintain enough influence on student groups to
cause strikes iu prevented him from implementing certain anti-Communist measures.
Since the president may find it politically inexpedient to suppress Communist
activities effectively during coming months., .0/IA expects no significant change
in Communist strength or influence.
International
d mere has been no change in Panamats endorsement of US international
policies, difficulties are developing in VG-41anar~nian relations. Current LTD-
t ar anian problems are clue chiefly to political. situations created by unavoici-
able delays in the implementation of US projects which :oul cl partially relieve
the unaemployment situaation~h. ori; on the Inter-American ay{ highh+ y, in} which !~ ~y
~.i idM+ t ' efw.r 4.1 k r.ised par icular .inteerr e; tcannot be re iewed at present.
Despite a nerr US-Panamanian highway convention (signed irL cp t--'-1 e!,) which pro-
vidcs substantial benefits to ?aroma in terms of road maintenance and jobs,
pc=l.. t.ical opponents of the president may make tro? ble over various ac iris tra--
t, nee m'pw
?t!tc?h ass 4+ art.* nn rrrantlnr the LS a emeiv liberal Tine of roads
rr-.r the. defonuc of the Canal and allied uses. The settlement of US-Pan